Down To The Wire - Rent Control Laws Expire Next Saturday (Eagle: foreclosures, condo)
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For same reasons there was a wave of co-op conversions in the 1980's; new rent laws will make it impossible to make any money on a building full of RS tenants. What is more the laws are permanent so unless you will need a change in majority in both houses in Albany for any future changes, good luck with that.
Vacancy decontrol - Gone!
Vacancy bonus - Gone!
MCI Increases - Reduced to an amount they might as well be gone, *and* the SOBs rolled back any increases granted in past seven years.
Only way going forward to get a apartment out of RS is to tear down the building, or go co-op/condo.
condos were not subject to the rules of co-op conversions . there are no original tenants in condos since condos are generally condo's day one .. unlike co-ops which were pure rental buildings . co-ops had to have a non harrasement clause in order to convert a rental to a co-op , not condos . condos already are owner owned and if rented out are not stabilized .
condos were not subject to the rules of co-op conversions . there are no original tenants in condos since condos are generally condo's day one .. unlike co-ops which were pure rental buildings . co-ops had to have a non harrasement clause in order to convert a rental to a co-op , not condos . condos already are owner owned and if rented out are not stabilized .
I was struck by something: "High-income deregulation: If a tenant in a rent-stabilized unit earned over $200,000 a year in two consecutive years, the landlord could deregulate the unit. That will no longer be allowed."
So might there might be a push towards renting only to high income earners? If rent stabilization was meant to protect low income earners, the removal of the ceiling won't help any.
the 200k rule requires the apartment to be above 2700 a month in rent . it requires both , not just going over on the income .
Last edited by mathjak107; 06-13-2019 at 08:36 AM..
different issue , those rentals have very few stabilized tenants .they rent for 5k-17k a month as rentals. very different then co-op's where 100% of a building was stabilized prior to conversion and many tenants did not buy . the co-op conversions were the landlords light at the end of the tunnel that wasn't the train coming ..it was a way to get out from under .stabilization once the original tenant was out .
these condo conversions involve very few stabilized tenants usually and are done with a different end game in mind by the developer . this is done as a money maker to just get out of the rental business .
co-op conversions were done specifically to get out of rent stabilization .. but you needed a certain percentage to buy or it could not go co-op . so insider prices were common as well as the co-op structure was perfect for this .
most renters are renters because they can't afford to buy or are lower income .the co-op structure enabled the building to hold part of the apartment sale price in it's mortgage ... you paid it through your maintenance . because the tenants bank was not on the hook for the whole amount they were more inclined to give the tenant a mortgage as opposed to a condo where the tenant needs to have their bank foot the whole purchase .
so co-ops enabled many tenants to get mortgages because their own bank was not on the meat hook for the whole amount .
so these condo conversions have nothing to do with getting out of stabilization . they are just money makers for the developer or owners as they no longer want to be rentals regardless of any stabilized tenants they may or may not have. if they had a lot of stabilized tenants they likely would have to have gone co-op not condo to get it to fly .
Last edited by mathjak107; 06-13-2019 at 08:43 AM..
And I imagine this pretty much puts an end to significant "buyouts" of rent stabilized tenants, as there seems to be less incentive to get rid of them (I haven't read the law yet, but listening to the highlights on the radio, this is what hit me). Any thoughts? from MathJak maybe?
Rent stabilization always made little sense to me. I am originally from Denver. When I moved to NYC, I was like what do you mean they are renting for so little in such an otherwise expensive location? You can explain it to me over and over again but it still makes little sense to me.
And I imagine this pretty much puts an end to significant "buyouts" of rent stabilized tenants, as there seems to be less incentive to get rid of them (I haven't read the law yet, but listening to the highlights on the radio, this is what hit me). Any thoughts? from MathJak maybe?
It can be a lot harder to sell when tenants have others they slide in for succession rights ...we had some older deals fall through that were being negotiated but a new investor group yesterday offered 375k for 2 million in value in the apartments and we said yes , so we are waiting to hear back as to a deal.pretty much we made our money and just want out at this point so the partnership is all on board for dumping them
I was struck by something: "High-income deregulation: If a tenant in a rent-stabilized unit earned over $200,000 a year in two consecutive years, the landlord could deregulate the unit. That will no longer be allowed."
If you think that's big consider this doozy - landlords are no longer allowed to black list deadbeat tenants based on court actions
This should actually drive up non stabilized rents because many co-ops and condos may restrict leasing out apartments tightening supply .. they don’t want to get stuck with apartments when investors walk away.. a lot of rentals today are in co-ops and condos owned by investors
This should actually drive up non stabilized rents because many co-ops and condos may restrict leasing out apartments tightening supply .. they don’t want to get stuck with apartments when investors walk away.. a lot of rentals today are in co-ops and condos owned by investors
Yeah, it is a total mess. It must drive investors mad being stuck in so much red tape. The ethics of it all is enticing to just be a gangster and make up your own rules. To forget all the rules. Literally evacuating tenants and then blowing the buildings up is possibly more ethical and cleaner business than the bureaucracy.
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