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This is not exactly breaking news, as for years there have been documented cases of wealthy celebrities and other affluent people living on the cheap in fashionable neighborhoods.
But my question re luxury decontrol: Is the burden of proof on the landlord to show that a tenant has passed the $200,000 income limit for two years in a row, and if it is, how can the landlord ever know that short of getting the tenant to turn over his paycheck stub or tax returns? (Good luck with that.)
Not surprising as the rs apartments aren't means-based in any meaningful sense. From the landlord's perspective, he's still getting short-changed the same amount every month, so he doesn't care.
This is not exactly breaking news, as for years there have been documented cases of wealthy celebrities and other affluent people living on the cheap in fashionable neighborhoods.
But my question re luxury decontrol: Is the burden of proof on the landlord to show that a tenant has passed the $200,000 income limit for two years in a row, and if it is, how can the landlord ever know that short of getting the tenant to turn over his paycheck stub or tax returns? (Good luck with that.)
Since one of the triggers is the rent, once that reaches the required level for decontrol many landlords send the papers automatically. It is then up to the tenant to complete and either prove or disprove their income.
Kicker is unless the law was changed if a tenant ignores a vacancy decontrol notice/does not respond within a certain period of time then by default the landlord *wins*.
As to your other point yes, there are many wealthy persons who play games with their income so they do not meet the income threshold for decontrol.
Because it is a two year period persons who know they have met the income threshold for one year will try and arrange to have income paid in the second deferred to another year. That is if they are expecting a good sum of money (bonus or whatever) in the last quarter of a year, just move that to the first quarter of the coming next year and voila, they have not met the threshold for two consecutive years.
Another way around is to have funds paid into a trust, which in theory then is *NOT* income directly received by the tenant.
There was a very wealthy and famous real NYC real estate professional who was also a heir to the Coca-Cola fortune who had a RS apartment on CPS. The building was sold to a developer who was emptying the place out for a tear down to build luxury housing. Because of the way her income was structured (IIRC much of it went into trusts or whatever) the woman despite her wealth (she owned homes elsewhere as well), was still entitled to her RS apartment so the developer had to pay her to surrender the apartment.
Now this woman again was not "poor" or even "middle class" but very comfortable and had a successful RS career, but yet she held onto that RS apartment on CPS and got her money to surrender the lease. If she didn't want to go it would have been the landlord's costs to haul her into court and prove some sort of luxury decontrol and thus get the apartment back that way.
Faye Dunaway tried her best to hold onto that Yorkville/UES tenement apartment off Second Avenue in the 70's (though only she and God knows why), until it became clear via bad PR and other reasons she was going to lose in court.
Not surprising as the rs apartments aren't means-based in any meaningful sense. From the landlord's perspective, he's still getting short-changed the same amount every month, so he doesn't care.
There are or were quite few RS apartments in those townhouses/brownstones from Fifth to Lexington on the UES. Your average person would never hear of them as they were passed through family or via friends of friends. Maybe someone's daughter or son who was going to college in the City or just starting out post grad. Mistresses, "boyfriends", and others either well connected and or at least knew someone that was.
As many of those buildings have been converted back into private homes numbers of apartments much less RS have dwindled, but they are still around.
that article has no clue what rent stabilized apartments are about.
there is noooooo net worth restrictions on rent stabilized apartments. they were never intended to be any kind of rent reduced housing.
the intention of rent stabilization was to prevent rent gouging and to agree to be regulated. . it became a political pawn and rents fell behind what they should have been.
my tenants in our rent stabilized apartments are worth more than we are. in fact we live in the same rent stabilized apartment my wife was in for 35 years. we could never afford to live in those city apartments yet our tenants do and pay about half market rent too.
rent stabilization only has to do with how long someone was in an apartment. their net worth has no bearing at all. folks confuse true rent stabilized housing with with affordable housing projects or subsidized low income housing.
someone living in a rent stabilized apartment has no income restrictions either until the apartment goes over 2500 and you earn more than 200k for 2 consecutive years .
then the landlord can petition that the apartment be decontrolled but other than that income does not come in to play either.
Last edited by mathjak107; 04-30-2014 at 05:20 PM..
there is noooooo net worth restrictions on rent stabilized apartments. they were never intended to be any kind of rent reduced housing.
the intention of rent stabilization was to prevent rent gouging . it became a political pawn and rents fell behind what they should have been.
my tenants in our rent stabilized apartments are worth more than we are. in fact we live in the same rent stabilized apartment my wife was in for 35 years. we could never afford to live in those city apartments yet our tenants do and pay about half market rent too.
rent stabialization only has to do with how long someone was in an apartment. their net worth has no bearing at all.
Quite right!
Don't know who or whom made up this fantasy that RS apartments were supposed to be "affordable" or "low income" but that rumor needs to be put to bed.
Rent control and later stabilization were designed to deal with a post WWII housing shortage, rent and other abuses by landlords. Such schemes were put into place in other cities such as San Francisco, Boston, and so forth for similar reasons. There never was nor still is any sort of income verification aside from recent efforts by landlords to make sure tenants can afford the rent.
Problem with rent control laws is that they inherently benefit long term renters. Today the only real tenants benefitting from what is left of RC apartments and most of the RS units are those who have held those units for a long, long time; that is moved in (or inherited via spouse or relative) say before the mid to late 1990's. Even then much of the benefit lies in Manhattan below Harlem where the difference between RS and market rate rents are greatest.
Now it just could so happen that a young person fresh out of college moved into a RS apartment say in the 1980's or 1990's when starting out in their careers. Now they are in their 50's or 60's and have been moderately to decently successful with incomes >$100K per year. For the record many persons for various reasons who can afford to move out of RS apartments. I mean if you are married with one or more kids a studio in the Village no matter how cheap the rent isn't going to cut it.
In another odd but interesting twist to gay marriage being made legal in NYS you have a good number of older gay men and women who have RS leases but aren't willing (for various personal reasons) to give up their apartments. So you have a very curious arrangement where married couples live in separate apartments each keeping their RS units as it were.
Quite honestly the whole thing is becoming moot as each year passes. The last great wave of persons with below market RS leases in much of Manhattan and Brooklyn are the tale end Baby Boomers. Now in their early 50's sooner or later they will either die or perhaps have to move into senior or other type housing if they cannot take care of themselves in place. As that happens those units will be certainly gutted and renovated to bring them close to or out of RS.
Most non city owned rent stabilized apartments are buildings that went co-op .
After being tricked by rent stabilization landlords saw co-ops as the light at the end of the tunnel. After the origonal tenant is out the apartment is decontrolled.
With baby boomers retiring and relocating or dying every day now more and more rent stabilized apartments are deregulated.
Eventually the private sector will be mostly done with it.
My focus investing wise was buying out leases in prestigious buildings betting on the fact some baby boomer tenants would sell out their leases to us so we could sell off the co-op apartment.
While walking in East Harlem, saw million dollar condos right next to the projects and in between one. Not a block over, literally right next to it.
Trust me, they are all in some deal and pretty sure even if an article says they are renting plz they own it. My guess is some developer gave a select few the lay out of their future development plans and as usual, the rich are preparing and cashing in.
And your point? I have no idea what that has to do with rent stabilized apartments not being a form of affordable housing.
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