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The way subsidized apartments do raise rent for others is by decreasing market supply and increasing demand at the same time, thus manipulating what the market is willing to pay for a market rate apartment.
That is correct. I believe that a second way that we are subsidizing stabilized apartments is that the landlord gets a tax break, so other taxpayers must pay higher taxes than they otherwise would.
it is like saying if you get market returns on an s&p fund it makes up for your loses elsewhere . no it just pulls the returns you should have had down if you didn't have the laggards..
I'm not really getting the analogy.
If you owned a market rate building, with 10 units, and 5 paid 3000 and 5 paid 1000, you'd be averaging 2000 per apartment. If your costs are 1500 in taxes and mortgage per- you'd be up 500 per.
That's your return on the investment as you might with S&P, your total package combined leads to profit.
If you dumped the low 5, you could likely make more by individually managing your portfolio.
If you owned a building with a portion under rent stabilization, with the same fiscal make up, you're stuck with the low performing, and if they dropped under the cost to operate- in order to keep performing, you'd have to change your higher performing units/stocks to keep profits.
Think about the city employees Tax Deferred Annuities. They bring in 7% or more GUARANTEED. If the market fails, they still get their 7%. That money has to come from somewhere.
'Going' rate, is a challenging statement for most of NY realty.
'Going' rate is essentially 'preferred' rent- the rare occasion in which rent in stabilization is above the market value and can be curtailed to rent.
'Market' value, is much higher than the market would bare, because the majority of units are paying...
That is correct. I believe that a second way that we are subsidizing stabilized apartments is that the landlord gets a tax break, so other taxpayers must pay higher taxes than they otherwise would.
your assumption is wrong. many buildings are older and the deal for coming on board was you got a 10- year tax abatement back in the 1960's like ours did. any tax breaks are gone for decades.
If you owned a market rate building, with 10 units, and 5 paid 3000 and 5 paid 1000, you'd be averaging 2000 per apartment. If your costs are 1500 in taxes and mortgage per- you'd be up 500 per.
That's your return on the investment as you might with S&P, your total package combined leads to profit.
If you dumped the low 5, you could likely make more by individually managing your portfolio.
If you owned a building with a portion under rent stabilization, with the same fiscal make up, you're stuck with the low performing, and if they dropped under the cost to operate- in order to keep performing, you'd have to change your higher performing units/stocks to keep profits.
Think about the city employees Tax Deferred Annuities. They bring in 7% or more GUARANTEED. If the market fails, they still get their 7%. That money has to come from somewhere.
'Going' rate, is a challenging statement for most of NY realty.
'Going' rate is essentially 'preferred' rent- the rare occasion in which rent in stabilization is above the market value and can be curtailed to rent.
'Market' value, is much higher than the market would bare, because the majority of units are paying...
Below market value.
the analogy is correct . getting what a market rate is or value for an investment is what an investor EXPECTS . ANYTHING LESS THAN THAT IS UNDER PERFORMANCE.
THE HOUSING MARKET RENTS ARE BASED ON OPEN MARKET NOT WHERE RENT STABILIZED RENTS ARE.
those apartments should be up at that level regardless of stabilization if that is where the market is.
the under performing apartments just reduce what the income should be from those apartments but add nothing extra to the other apartments to compensate.
if there were no more stabilized apartments left in our building the rents would be the same for all apartments regardless in fact at this point our building has only a handful of stabilized apartments left. the rest are now decontrolled.
the building we own the apartments in as an investment are co-ops that have rent stabilized tenants lefts. the rents on all the apartments without stabilized tenants that are rented are at market. none of them have anything to do with stabilized apartments in that building since each is individually owned by others.
the rents are what they are because that is where the market is , not any higher because I am earning less than market rate on mine.
you are assuming a landlord can charge more because of under performers. they cannot charge more they only receive less on the others otherwise they would all be at market rate.
market rates have little do do with rent stabilized rents or your own expenses . whether you have a mortgage and the guy down the block does not or you spent 10k on a new roof or 5k on a furnance does not matter. markets determine the rents,not individual situations.
Last edited by mathjak107; 02-04-2015 at 02:46 AM..
If you owned a market rate building, with 10 units, and 5 paid 3000 and 5 paid 1000, you'd be averaging 2000 per apartment. If your costs are 1500 in taxes and mortgage per- you'd be up 500 per.
That's your return on the investment as you might with S&P, your total package combined leads to profit.
If you dumped the low 5, you could likely make more by individually managing your portfolio.
If you owned a building with a portion under rent stabilization, with the same fiscal make up, you're stuck with the low performing, and if they dropped under the cost to operate- in order to keep performing, you'd have to change your higher performing units/stocks to keep profits.
Think about the city employees Tax Deferred Annuities. They bring in 7% or more GUARANTEED. If the market fails, they still get their 7%. That money has to come from somewhere.
'Going' rate, is a challenging statement for most of NY realty.
'Going' rate is essentially 'preferred' rent- the rare occasion in which rent in stabilization is above the market value and can be curtailed to rent.
'Market' value, is much higher than the market would bare, because the majority of units are paying...
Below market value.
the tda annuity is paid with tax payer dollars but that does not mean you would pay 1 penny less in tax rates if they brought that rate lower , it would only improve the sustainability of the fund so an annuity where the money is paid out of tax revenue is a poor example . if they cut that rate like they want to your taxes will not fall as a result of the subsidy going away.
it is what it is.
Last edited by mathjak107; 02-04-2015 at 03:59 AM..
That is unfortunate you don't live in a rent stablized building. I'm not sure how landlords decide whether they want their apartments to be rent stablized or not. There are tons of luxury high rise buildings charging 3K for a 1 bedroom and it's rent stablized.
Not sure why you're landlord being greedy and charging you that % increase has anything to do with me. It's your buildings owner that makes these decisions. It has nothing to do with anybody else.
You have zero understanding on how a free market works. If a so-called greedy landlord over prices his apartment rental, no one would rent it because the asking rent is higher than what the market can bear. Price gouging in apartment rentals do not exist. A total myth made up by rent regulation advocates.
You have zero understanding on how a free market works. If a so-called greedy landlord over prices his apartment rental, no one would rent it because the asking rent is higher than what the market can bear. Price gouging in apartment rentals do not exist. A total myth made up by rent regulation advocates.
NYC rent is -NOT- a free market.
Only 50% of the housing in the city operates on a free market, and the rest is viciously regulated.
Q41 lives in a rent stabilized apartment, and thinks it is his right to have a decent place to live, perhaps not realizing that this right denies someone else such a right.
A fair system would be free market.
Given a free market, you would see a significant shift of residents.
... and I'm not including the projects.
nyc apartments that are not stabilized are free market and the two have little interaction .
my tenants in the co-op apartments we own near central pasrk that are stabilized pay around 2500 a month.
the going price for those who own and rent them out is near 4k a month. any of the ones we held where we bought the leases we sold them outright and had no interest in renting them out even at market.
but market rate is what it is. had we rented them out instead of selling the non stabilized apartments the rents would have been what they are and the stabilized rents what they are. but no one except me is subsidizing anyone else to live there. it comes out of my pocket because i am not earning the rate of return that investment could ..
yep.. when apple was 30 bucks did you ever think it would hit 800?
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