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As far as I know, you can still offer a free month's rent on a rent-stabilized apartment without implications, but you can't actually drop the rent. Preferential rent becomes the new legal rent.
But, yeah, unsurprising to see a bounce back up. One of the reasons I wasn't super-tempted to leave my RS place for the free market. I knew the decline was only temporary and I'd get hit with a big increase in one or two years. Good for kids first coming to the city, not great for older people who don't want to be moving constantly.
A lot of landlords were offering "free" months as a lure to get people to sign. Let's say a place was going for $3,000 a month on a one year lease. Landlord then offers 3 free months to sweeten it, but the way you're paying the landlord is actually amortizing those 3 "free" months over the course of 15 months, so for 15 months you're paying $2,400 a month.
These were often given on top of already substantial drops in rent prices. Now prices are generally up from their nadir, and so people are talking about large percentage increases. However, one thing to keep in mind is that these percentage increases are large because the *base* was already greatly reduced and you can have large percentage increases and still have it below the 2019 prices. However, someone might see the large percentage increases and scoff that "It's a planted story" because he sees the big numbers, but due to what's essentially illiteracy with numbers, don't understand that these big percentage numbers don't necessarily mean a return to 2019 prices.
Let's take an outrageous example of this. Let's say a place was going for $3,000 a month pre-covid. Let's say things got really bad and the effective price cut of about half (50%). That's now at $1,500. Now let's say after that sweetheart deal is over and you have a bump of 50% up. That sounds really intimidating and similar to the 50% cut we saw earlier, but in reverse. However, a 50% increase on this lowered base brings it up to $2,250 which is still 25% below that $3,000 a month original price.
There were very few, if any, outright price drops. Almost all of the incentives focused on "X free months" and "no fee".
Secondly, prices weren't cut in half (apart from maybe some luxury apartments at the very top end). Most were on the order or 10-30%.
There were very few, if any, outright price drops. Almost all of the incentives focused on "X free months" and "no fee".
Secondly, prices weren't cut in half (apart from maybe some luxury apartments at the very top end). Most were on the order or 10-30%.
Yea, that's right. I work in banking. The covenants of the loan provisions mean that many landlords (corporate ones at least) aren't allowed to go below a certain monthly rent or it will trigger an acceleration of the principal plus interest due.
As far as I know, you can still offer a free month's rent on a rent-stabilized apartment without implications, but you can't actually drop the rent. Preferential rent becomes the new legal rent.
But, yeah, unsurprising to see a bounce back up. One of the reasons I wasn't super-tempted to leave my RS place for the free market. I knew the decline was only temporary and I'd get hit with a big increase in one or two years. Good for kids first coming to the city, not great for older people who don't want to be moving constantly.
Yea, that's right. I work in banking. The covenants of the loan provisions mean that many landlords (corporate ones at least) aren't allowed to go below a certain monthly rent or it will trigger an acceleration of the principal plus interest due.
Facts are whatever people think they are.
If someone asked me how to build a rocket, I'd tell them I don't know. The other poster would go Google it, come back 15 minutes later, and tell them "here's how to build a rocket".
There were very few, if any, outright price drops. Almost all of the incentives focused on "X free months" and "no fee".
Secondly, prices weren't cut in half (apart from maybe some luxury apartments at the very top end). Most were on the order or 10-30%.
There most certainly were price drops. However, many can't drop the official price that much for various reasons such as the loans on which they purchased that property which means they can only drop the price to a certain extent, before they are no longer officially dropping the price but that's not the same as no official price drops. This is where the free months and no fees leading to greater effective price drops in addition to the official price drop.
And yea, there were a lot of luxury apartments with large price drops. As mentioned before, there were people moving into substantial upgrades from before.
The article and reddit notice notes price bumps--it does not say that most people are seeing a 50-70% increase in rent, only that such did happen. Most were likely lower percentages than that as well. You can also look at the little infographic in the article--does that look to you like NYC rents or just Manhattan rents returned to the pre-pandemic peak? Did you see somewhere in the article that claimed as much? That should have been pretty clear, but people struggle with more than just numerical illiteracy, but all kinds of it.
Last edited by OyCrumbler; 09-16-2021 at 01:45 PM..
If someone asked me how to build a rocket, I'd tell them I don't know. The other poster would go Google it, come back 15 minutes later, and tell them "here's how to build a rocket".
I literally have been on teams that built rockets and sent them to low-earth orbit, so yea, I do know some things about them. I'm also not numerically illiterate or prone to making one failed account after another. People differ from each other, y'know?
The banks essentially protect their other customer and themselves from a race to the bottom (which happens quite often in a free market during downturns).
There most certainly were price drops. However, many can't drop the official price that much for various reasons such as the loans on which they purchased that property which means they can only drop the price to a certain extent, before they are no longer officially dropping the price but that's not the same as no official price drops. This is where the free months and no fees leading to greater effective price drops in addition to the official price drop.
And yea, there were a lot of luxury apartments with large price drops. As mentioned before, there were people moving into substantial upgrades from before.
The article and reddit notice notes price bumps--it does not say that most people are seeing a 50-70% increase in rent, only that such did happen. Most were likely lower percentages than that as well. You can also look at the little infographic in the article--does that look to you like NYC rents or just Manhattan rents returned to the pre-pandemic peak? Did you see somewhere in the article that claimed as much? That should have been pretty clear, but people struggle with more than just numerical illiteracy, but all kinds of it.
Direct quote from your last post:
Quote:
on top of already substantial drops in rent prices.
This post:
Quote:
However, many can't drop the official price that much for various reasons
Seems contradictory ?
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