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I get NO tax break. I have one small building consisting of mostly regulated units. Of those units, half are occupied by long-time tenants who are paying about half the market rent. I'm actually losing money on those apartments, and as each year goes by, the gap between those rents and the market widens. That happens because the percentage increase in the regulated rents covers about half the percentage increase in expenses. Two of these three are by no means lower income. One is making an income in the 70's and the other is actually quite wealthy and uses the apartment whenever he happens to be in town. His father once offered to buy the building for his son.
Since 2001 my property tax has increased by 85%! In 2009 I'm paying $20K tax on a small building. I get NO break.
Last edited by lamontnow; 01-07-2009 at 01:34 PM..
I dunno... the way I see it, if you don't like a municipality's or a company's policies, you vote with your feet and your dollars and live or invest somewhere else. It seems to me, from an economic standpoint, that if rental policies were that dysfunctional, development in New York would have been discouraged and dried up a long time ago. Plus don't landlord or land owners get a big real estate tax break for providing rent-regulated units in their building?
Agreed, very fair point. At least for me, I'm considering joining some friends in a small real estate investment, but we're looking far far away from NYC (Florida, where we're from). But it's a fair point, if it is that bad, why are people still building. I don't know enough about it to say, maybe it is a valid indication that it's not a problem. Or, maybe people build for the tax incentives, and sell while they're profitable to short-sighted people who can't unload them once the rent roll makes them fairly worthless.
However, it's not the landlords who bear the bulk of the pain, as small most small landlords probably don't have negative income units, and large landlords probably have both. The large landlords are only sacrificing "greater profits." It's the non-RS tenants who bare most of the burden placed on them by the landlords with a mix of unit types. Well there must not be a problem if people want to pay that? Idk. It's not that they want to pay twice as much as a free-market would dictate, it's that they want to be in NYC more than that burden.
If my dream is to be a broadway actor, an
d that dream is worth more than 2k a month in rent on a unit worth 1k a month. I will still come, and I will still pay, but is it fair to pay that extra 1k a month to sustain an illogical law and unnatural distribution of burdens? Just because they system manages to chug forward with some level of positive growth, doesn't mean it's either ideal or fair.
I concede you potentially have a point, but I don't understand all the economics of NYC real estate enough to know for sure.
Last edited by aguy189; 01-07-2009 at 02:29 PM..
Reason: typo
I am not saying that RS is the absolute best answer, but someone has to provide something for the average NY salary of $46K. Look up zipcode on city-data in NYC and see what real NYer's are earning. The pay is not keeping up with the rents. Maybe these people should move, but there is hardly a way for them to save for the move.
This may be true, but you create illogical inefficiencies when you address they symptoms or consequences instead of the problem.
The problem you've indicated is income, not rent rates.
If you price people out of NYC, they'll move, fewer will want to commute in to do the low paying jobs and people will have to start paying more. The people who want to get paid more will, and those who want to leave will, instead of locking those who would want to leave in by offering them a rent deal too good to pass up. Address the actual problem, not the symptoms.
If teachers don't get paid enough to live here, then raise taxes and pay them more. Instead of raising taxes and subsidizing housing for both teachers and rich people who haven't moved in 30 years.
I get it though. People aren't corn, or oil, or any other free-market commodity. It's difficult to deal with the upheaval of lives to let the market "correct itself." (i.e. it's not fair to make a million people move so that salaries are forced up and let them move back).
Still, as you mention the possibility of, there must be a better way to address the real problem, and not the consequence of the problem.
I get NO tax break. I have one small building consisting of mostly regulated units. Of those units, half are occupied by long-time tenants who are paying about half the market rent. I'm actually losing money on those apartments, and as each year goes by, the gap between those rents and the market widens. That happens because the percentage increase in the regulated rents covers about half the percentage increase in expenses. Two of these three are by no means lower income. One is making an income in the 70's and the other is actually quite wealthy and uses the apartment whenever he happens to be in town. His father once offered to buy the building for his son.
Since 2001 my property tax has increased by 85%! In 2009 I'm paying $20K tax on a small building. I get NO break.
I get NO tax break. I have one small building consisting of mostly regulated units. Of those units, half are occupied by long-time tenants who are paying about half the market rent. I'm actually losing money on those apartments, and as each year goes by, the gap between those rents and the market widens. That happens because the percentage increase in the regulated rents covers about half the percentage increase in expenses. Two of these three are by no means lower income. One is making an income in the 70's and the other is actually quite wealthy and uses the apartment whenever he happens to be in town. His father once offered to buy the building for his son.
Since 2001 my property tax has increased by 85%! In 2009 I'm paying $20K tax on a small building. I get NO break.
Big tax break, in 1963 we got a 10 year tax abatement, that was it.... its a joke....
lets see , we need affordable houses, affordable healthcare, affordable fuel,affordable taxes and affordable repair men..... then maybe salarys can come down and services can be affordable and then maybe rent can come down.......... lets put affordable food in there too, my family needs to eat
everything has its own market level price and forcing anyone of them down lower artificially isnt going to work without reprecussions like noooooo rentals being built and stubbornley higher rents for everyone else just like we have
Agreed, very fair point. At least for me, I'm considering joining some friends in a small real estate investment, but we're looking far far away from NYC (Florida, where we're from). But it's a fair point, if it is that bad, why are people still building. I don't know enough about it to say, maybe it is a valid indication that it's not a problem. Or, maybe people build for the tax incentives, and sell while they're profitable to short-sighted people who can't unload them once the rent roll makes them fairly worthless.
However, it's not the landlords who bear the bulk of the pain, as small most small landlords probably don't have negative income units, and large landlords probably have both. The large landlords are only sacrificing "greater profits." It's the non-RS tenants who bare most of the burden placed on them by the landlords with a mix of unit types. Well there must not be a problem if people want to pay that? Idk. It's not that they want to pay twice as much as a free-market would dictate, it's that they want to be in NYC more than that burden.
If my dream is to be a broadway actor, an
d that dream is worth more than 2k a month in rent on a unit worth 1k a month. I will still come, and I will still pay, but is it fair to pay that extra 1k a month to sustain an illogical law and unnatural distribution of burdens? Just because they system manages to chug forward with some level of positive growth, doesn't mean it's either ideal or fair.
I concede you potentially have a point, but I don't understand all the economics of NYC real estate enough to know for sure.
My thinking was maybe there would've been more development in NYC if it weren't for rent regulation policies. So, the under-development leads to chronic and persistent shortages in available units, forcing the market rate for unregulated units up (since landlords have to be made relatively whole), rather than spreading the cost amongst all units.
I'm trying to imagine what NYC would be like without rent controls. Clearly, the going rate for now-regulated units would go up, at least in places where the maximum allowed rent is below the market rate. But then this would mean the unregulated unit rents would decrease in this world since they don't have to compensate for rents that are artificially below market. Will the average rent stay the same but the variation in rents will move closer to the average?
nyc has not had one new rental built that i know of since the late 70's.... only luxury rentals ,co-ops and condos.... the supply of decent rentals is pretty crappy
This may be true, but you create illogical inefficiencies when you address they symptoms or consequences instead of the problem.
The problem you've indicated is income, not rent rates.
If you price people out of NYC, they'll move, fewer will want to commute in to do the low paying jobs and people will have to start paying more. The people who want to get paid more will, and those who want to leave will, instead of locking those who would want to leave in by offering them a rent deal too good to pass up. Address the actual problem, not the symptoms.
If teachers don't get paid enough to live here, then raise taxes and pay them more. Instead of raising taxes and subsidizing housing for both teachers and rich people who haven't moved in 30 years.
I get it though. People aren't corn, or oil, or any other free-market commodity. It's difficult to deal with the upheaval of lives to let the market "correct itself." (i.e. it's not fair to make a million people move so that salaries are forced up and let them move back).
Still, as you mention the possibility of, there must be a better way to address the real problem, and not the consequence of the problem.
Thank you, You are correct I am addressing the symptoms because I don't have any answers. I have asked this question for the past 2 years or more on this forum. Never got an answer, just more questions or statements. Your answers do give solutions. However, it already cost more to live in NYC than upstate and upstaters pay astronomical property taxes. The people of this city may not want to pay more in taxes to give civil servants more money. Also some civil servants make more than some private sector workers, like con edison, verizon, cable company employees
The people I am referring to work civil service or hospital, restaurants, or some of the other jobs I mentioned. They make the city run. But maybe if we really discussed this instead of landlords "yelling" about RS and tenants "demanding" to keep it. There has to be some solutions. We are all paying the price in taxes to fund programs for rental assistance, tax rebates, etc, it is a merry-go-round.
The services performed by these workers are needed. When the budget cuts go into place and the services are cut, everyone will see how much they are needed.
I dunno... the way I see it, if you don't like a municipality's or a company's policies, you vote with your feet and your dollars and live or invest somewhere else. It seems to me, from an economic standpoint, that if rental policies were that dysfunctional, development in New York would have been discouraged and dried up a long time ago. Plus don't landlord or land owners get a big real estate tax break for providing rent-regulated units in their building?
Why do people think RS landlords get tax breaks for providing regulated buildings? Who told you this lie?
Its lies like these that fuel landlord stereotypes and makes people unsympathic to landlords. Exactly what tenant advocates want you to think to further their pro-rent stabilization agenda. Its a smear campaign against landlords to sway public opinion.
Lets get this clear once and for all....being a landlord of a RS building, I can tell you that no such tax break for providing RS apartments exist.
The tax abatements that do exist are called J-51 which requires landlords to first come out of their own pockets to pay for a MCI (Major Capital Improvement) in their building. In return, the City deducts about 6%-7% off the landlord's annuel property tax bill for the next 12 years. What good does that do if they keep raising your taxes every year?
So the answer is NO...there is NO tax break for providing rent stabilized apartments to NYers. Please get your facts straight before posting.
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Clearly, the going rate for now-regulated units would go up, at least in places where the maximum allowed rent is below the market rate. But then this would mean the unregulated unit rents would decrease in this world since they don't have to compensate for rents that are artificially below market. Will the average rent stay the same but the variation in rents will move closer to the average?
