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Easy, you have a 1% vacancy rate in the city, partially due to the fact that in the last 40 years very little housing stock has been built, you still have far more demand than supply.
Until this grotesque system is eliminated, developers will not finance large-scale development that would be sufficient to start to hold down the market price increases. That will take hundreds of thousands, if not millions, more units built.
Mind you, the reason the prices of market rentals are so high is they need to make up for the badly reduced revenue of the controlled / stabilized apartments.
Were those 1 million apartments completely de-controlled / de-stabilized and tossed onto the market, the top prices would come down, and the bottom end would most certainly rise, meeting somewhere in between.
With a 1% vacancy rate developers should be lining up to build rental buildings, as there is obviously market for them.
However, with rentals it takes a long time to get the money back that was put in to build the structure. But with Co-ops and Condos, the developers get the money back very quickly. And that as business people is what htey are interested in.
If you got rid of rent control/stablization tomorrow, what you would see is a dramatic rise in prices on the low end, typical increases in the middle and luxury rentals.
But you would not see a dramatic increase in new rentals being built, as the RoR is still not there.
With a 1% vacancy rate developers should be lining up to build rental buildings, as there is obviously market for them.
However, with rentals it takes a long time to get the money back that was put in to build the structure. But with Co-ops and Condos, the developers get the money back very quickly. And that as business people is what htey are interested in.
If you got rid of rent control/stablization tomorrow, what you would see is a dramatic rise in prices on the low end, typical increases in the middle and luxury rentals.
But you would not see a dramatic increase in new rentals being built, as the RoR is still not there.
I agree. The rent on the low end will rise but rightfully so as those are the units that have been paying artificially low and below market rents for decades. Also remember that price gouging in apartment rentals does not exist and is just a myth.
I agree. The rent on the low end will rise but rightfully so as those are the units that have been paying artificially low and below market rents for decades. Also remember that price gouging in apartment rentals does not exist and is just a myth.
And prices on the high end will come down, which is good for 99% of the population since most people don't have connections to get gravy train RS apartments
And prices on the high end will come down, which is good for 99% of the population since most people don't have connections to get gravy train RS apartments
Why would prices on the high end come down? There are obviously people paying those prices, will continue to do so.
Ending RC/RS will not magically create more rental units (which is what is needed).
I agree. The rent on the low end will rise but rightfully so as those are the units that have been paying artificially low and below market rents for decades. Also remember that price gouging in apartment rentals does not exist and is just a myth.
And prices on the high end will come down, which is good for 99% of the
population since most people don't have connections
How is lowering the prices on the highest priced apartments going to be "good for the 99%?" The closest most people get to multi-million dollar apartments are the floor plans in the New York Times.
It may start landlords investing in building middle class rentals again . that has not happened since the 1970's.
What is a "middle class rental?"
How would removal of rent controls spur on new middle class developments when any such contemplated new housing would be rentable at market rates.
Nobody is building rent controlled apartments anymore so abandoning rent control would not be an inducement of any kind to developers. It would simply not enter the "build" or "not build" decision.
The only real decision is whether a builder wants benefits from the City in which case he must provide perks like some affordable units, or whether he wants to build on his own dime in which case he is free to charge any rent he chooses for all his units.
Whether a building down the block is rent controlled is immaterial.
Last edited by Kefir King; 08-07-2013 at 07:02 AM..
Why would prices on the high end come down? There are obviously people paying those prices, will continue to do so.
Ending RC/RS will not magically create more rental units (which is what is needed).
While it will not create more rental units- it will increase vacancy which produces a similar effect-
1. Pensioners who live in NYC only because their rent is artificially low will have to move or begin to share units/take on residence in assisted living centers or choose to attempt to live in NYCHA- which is not controlled by the fair market.
2. People who have Rent Controlled/Stabilized units above 1 bedroom who do not utilize them may no longer be able to afford the luxury, and require taking in boarders to fill the vacancies or move out opening up more bedrooms in the city.
RC/RS has merit an idea- however our current system just picks and chooses a few winners to pay less rent at the cost of everyone else. Those people who are current on RC/RS have no real given right to extort everyone else. If you want to keep a stable monthly housing payment- BUY your place.
How would removal of rent controls spur on new middle class developments when any such contemplated new housing would be rentable at market rates.
Nobody is building rent controlled apartments anymore so abandoning rent control would not be an inducement of any kind to developers. It would simply not enter the "build" or "not build" decision.
The only real decision is whether a builder wants benefits from the City in which case he must provide perks like some affordable units, or whether he wants to build on his own dime in which case he is free to charge any rent he chooses for all his units.
Whether a building down the block is rent controlled is immaterial.
no builder has wasted money putting up any pure rental buildings that were not low income, subsidized or special projects for certain people since the 1970's.
we have seen only co-ops ,condos and deregulated luxury rentals put up.
no one said they would be cheaper , in fact new cost money....
but we would have a lot newer nicer supply of rentals from which to pick from..
rentals will be getting tighter too as I said because baby boomers are retiring and relocating or dying freeing up co-op apartments that were stabilized.
most of the rentals in queens today are co-op conversions.
much of that supply that has original tenants will be sold off and not only not stabilized but no longer even rentals.
I think I mentioned before we have now sold 36 out of 38 apartments that were rent stabilized tenant occupied and they are no longer rentals.
multiply that by thousands of sponsors and investors holding original apartments and there can be a huge supply vanishing over the next few years.
nyc population has been growing and buyers are no problem so these co-ops are leaving the rental market..
Last edited by mathjak107; 08-07-2013 at 11:24 AM..
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