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So then we're in agreement. We both want to take the decision out of the hands of the corrupt politicians and give to THE PEOPLE! Let's get the issue of rent control on the NY State ballot. Let's allow the light of day to shine on the rent stabilization system. LET THE PEOPLE DECIDE!
Something gives me the feeling that your enthusiasm for democracy doesn't go that far.
First of all the market price IS simply "what the market will bear".
Expenses have nothing to do with the market price (or market rent). The South Jamaica LL will be able to stay in business, even though his market rents are lower, because his expenses are lower. Not for the boiler, but his other expenses. The MAJOR expense by far of a rental building is the property tax - and that obviously would be MUCH lower than that of a building in Brooklyn Heights. Insurance would also be lower and mortgage payments (if any) would be significantly less due to the lower purchase price of the building.
But if the rents were below market, due to rent control, then gradually over time those rents would fall so low, relative to the increase in expenses, that the building would go financially underwater. And that applies to any building regardless of neighborhood.
Which makes perfect sense why it is mostly the landlords in gentrified neighborhoods, or landlords that own buildings in neighborhoods currently undergoing gentrification that are making the most noise. Thanks for the response.
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
Which makes perfect sense why it is mostly the landlords in gentrified neighborhoods, or landlords that own buildings in neighborhoods currently undergoing gentrification that are making the most noise. Thanks for the response.
I just explained to you that the LL in South Jamaica, a neighborhood not in gentrification, gradually WILL GO OUT OF BUSINESS if his rents are artificially controlled and fall behind the increases in expenses. Is that so hard to understand? As I said, this problem hits buildings in any neighborhood. Yes, an area being gentrified will experience sharper increases in property taxes, which will put more pressure on the LL. But taxes and other expenses increase in all neighborhoods.
Last edited by Green Explorer; 12-22-2011 at 05:45 PM..
Here's the part of the concept that I can't figure out - you charge what the market will bear....which I'm assuming is pretty much what a tenant is willing to pay. How does that automatically ensure that your business expenses are covered? For example (and I have brought up this example before), you have a landlord in Brooklyn Heights and a landlord in South Jamaica. They both have a 20 unit deregulated building, so rent stabilization isnt even an issue in the example I present. The boiler breaks. The boiler cost $15K to replace (fictional cost). Market rate apartments would be lower in South Jamaica than in Brooklyn Heights because its a less desirable neighborhood. What does the South Jamaica LL do? Is he automatically in a bind because the market for South Jamaica apts is not as profitable? My point is that there must be more variables when it comes to setting cost, not simply "what the market will bear."
It doesn't. That's why running a business is risky.
What stabilization does is prevent the landlord for maximizing his revenue potential while doing nothing to control his expenses.
I just explained to you that the LL in South Jamaica, a neighborhood not in gentrification, gradually WILL GO OUT OF BUSINESS if his rents are artificially controlled and fall behind the increases in expenses. Is that so hard to understand? As I said, this problem hits buildings in any neighborhood. Yes, an area being gentrified will experience sharper increases in property taxes, which will put more pressure on the LL. But taxes and other expenses increase in all neighborhoods.
Believer it or not, there are some neighborhoods in the city where the rent stabilization rates also fall in line with the market rate. Those landlords are not making noise. Their property taxes are also par for the course.
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
That was the answer I was looking for. Thanks for the response.
Any business is risky. That's what separates the men from the boys. Risk takers get rewarded while lazy people dont. Many people have their tails between their legs scared of the risk in opening a business and opt to take the easy way out and be someone's employee. And those are the complainers like some you see on this board.
Any business is risky. That's what separates the men from the boys. Risk takers get rewarded while lazy people dont. Many people have their tails between their legs scared of the risk in opening a business and opt to take the easy way out and be someone's employee. And those are the complainers like some you see on this board.
Ehh....don't look at it like that. It is a risk to open a business....definitely!
But at the same time not everybody is simply cut out to run a business. Its the order of the world, and it is what it is.
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
Believer it or not, there are some neighborhoods in the city where the rent stabilization rates also fall in line with the market rate. Those landlords are not making noise. Their property taxes are also par for the course.
it has little or next to nothing to do with location.
it only depends on the number of old time tenants left or how many times the apartments flip as to whether or not rates are at or near market.
in fact with most stabilized rentals being converted to co-ops it really amounts to how many old time origonal tenants are left. with the age of the baby boomer ripe for retirement now many are or will be relocating and more and more apartments each year going forward will no longer be a bargain or if co-op even a stabilized apartment..
about the only thing i can say is an advantage to a stabilized apartment if you werent in one for a long time already is at least you know your rent wont shoot up drastically over night but even if it did your free to move elsewhere if the market is priced lower overall..
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