Not sure how to respond, I understand that the apartment is kept at a certain rent to affordable but the idea of have a vacation while having a rent stabilized apartment seems odd to me
3
Yes, rent stabilization IS a subsidy paid for by the owner of the apartment or building, and partly supported by other residents of that building.
4
Simple answer: your neighbors are parasites who are taking advantage of a system intended to help people who could not afford rent. Were I to have such neighbors, I would not hesitate to greet them as the blood sucking pests they are each day.
4
@QEDYou did not read article.. it is not meant for poor people. Those are projects.
It is meant to keep landlords from charging 6K for a 2 bedrooms.
14
@Karen Which in a free society is their RIGHT to do...
1
@Piotr
So you believe that "in a free society" landlords can charge whatever they wish? A little too "let them eat cake" IMHO. Rent stabilization has allowed many folks who would otherwise be priced out of their homes to remain, stabilizing (see that word?) neighborhoods. Sounds like you didn't grow up around here.
5
my single neighbor has the biggest, nicest apartment (top floor, 3 exposures, overlooking a park, 2 bedrooms, 1 1/2 bathrooms with maid's quarters) in my pre-war (1923) building. high ceilings, large gracious rooms. she also leases a brand new mercedes benz every 3 years.
3
Rent regulation should operate just like any other government entitlement. There should be a binary means test, e.g., income. And it must sunset at some point, just like unemployment benefits. Residents entering into the rent regulation system should use the opportunity to save money, go to school, and ultimately prepare themselves financially for getting out of the system so that the next person/family will also enjoy the same privilege of discounted housing. The problem now is that entire lives and lifestyles are built around guaranteed rent stabilization for life (and the lives of their heirs, and so on). In my Sag Harbor (Hamptons) neighborhood, three of my elderly adjacent neighbors have regulated apartments in the city. On a trip to Miami Beach a while ago, I met someone who paid $600/month for a legally designated "affordable unit" in a new condo building in Chelsea; he said that he worked part time to make sure that his income does not exceed the legally allowable limit for his unit. These are mere anecdotes, but I suspect there are thousands of similar cases where rent regulation unintentionally enables lives of luxury and/or leisure for their recipients. It's enough already!
3
And Trump is not the only one. https://www.nytimes.com/2018/10/04/opinion/trump-family-real-estate.html...
"They make a killing by taking advantage of a rigged system. They extract as much wealth as possible from hardworking people trying to hang on to the places they call home, with little regard for the common good or the social fabric of our city. They take advantage of tax subsidies to renovate old buildings and construct new ones, and they engage in a range of practices, lawful and unlawful, to raise rents above the threshold beyond which tenants lose the protections of rent stabilization. And they regularly discriminate against tenants on the basis of race, language, national origin and immigration status."
2
This is a special case, because the landlord is the condo sponsor. No doubt the income from the sale of those units can comfortably subsidize the shortfall from the rent-stabilized tenants.
But to say that "there people who have vacation homes" as a bad thing at all. That’s the way the system’s supposed to work" — and the entire tone of the answer — ignores the simple fact that someone who pays only $1,200 for a large apartment in this area in an all-rental building is putting an enormous burden on the landlord, who has to make for the lost income with no back-up like selling other units.
6
This is why it is ridiculous to argue that people with rent-stablized leases can't own property elsewhere:
https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-...
2
The arguments in support of this system are ridiculous. I have no issue in theory with rent control for people who are truly in need. But, there is zero economic justification for allowing someone to pay mandated legally cheap rent, so they can purchase second homes, or rental properties, elsewhere. As others have said, this system essentially just removes inventory from the market, driving the price for market rate apartments higher, which is the very opposite of the purported goal.
9
@Robert
"I have no issue in theory with rent control for people who are truly in need."
Perhaps you missed the part about the rent stabilization program not being based on "need". There is no qualifying metric applied to individual lease holders that then sets the rent rate. There is no government or taxpayer subsidy involved.
Your opinion that "...there is zero economic justification for allowing someone to pay mandated legally cheap rent."
seems to be one of a very narrow - perhaps even selfish - scope.
Is there no larger societal, i.e., economic, benefit to mandating that our children must go to school and be educated?
Is there no larger societal, i.e., economic, benefit to mandating that people be vaccinated against highly contagious and debilitating diseases?
12
There are many residents of NYC who would prefer stable lives and living situations, but are not able to find them. I have moved 5 times in 10 years due to rent increases and neighborhood gentrification. Would I have committed to stay 10 years in one place if the rent was stable? Absolutely.
I fail to understand how rent stabilization addresses "a persistent housing shortage". Surely it does the opposite by providing incentives for people to stay in their apartments far past the time when they otherwise would have moved.
6
@Camilla
"Would I have committed to stay 10 years in one place if the rent was stable? Absolutely.
So in other words, if you can't have stability then no one can?
I fail to understand how rent stabilization addresses "a persistent housing shortage". "
Aren't you really saying that you're upset that other people were able to find stability through the rent stabilization program while you weren't? That is a completely understandable feeling, but please do own it! At the same time try and understand that its our City - our society - as a whole that also benefits hugely from the program.
11
Camilla you are exactly correct. The chosen elites who score these apartments through their connections prosper, while the rest of us lose out.
3
@Camilla Rent regulations inflate the rent for "market rate" apartments by 30%. It's a very unjust system. I don't see it changing as the rent-regulated tenants are organized and can use their clout politically to keep rent regulation in tact. The people who are hurt by rent regulations (anyone not in such an apt) are not organized.
2
You failed to mention that the majority of rent control units were only given to “white people“. All colored, brown, Latino were excluded.
7
@Ronnie Really????? Rent control started in 1946 when the city's demographics and especially parts of Manhattan were quite different than now. Since 1974 there are no new rent controlled apartments. In parts of Queens and Brooklyn market rents are less than rent stabilized rents. Really only a Manhattan and upper income area issue.
2
I always thought the purpose of this column was to answer real estate question, not give sanctimonious lecturers about the beneficence of this or that social policy. The question here was answered after the first the first or second paragraphs. There was no need to go beyond that.
Now that you did though, I say that RS is not a subsidy; it is far worse. It is a taking by the government from one party to benefit others based on some social policy. More than that,it is compulsory in that the owner of the property cannot withdraw the apartment from the rental market once it is occupied. Even if s/he is losing money on it and decides the whole thing isnt worth it, s/he must allow the RS tenant to continue in the apartment at the legal rate, indefinitely, and even potentially pass it down from generation to generation. it is just rotten.
15
@Robert Except, of course, that it isn't a "taking" since it's in fact a law that has, on several occasions, been relaxed from the controls put in place in the 1940s.
No one who buys a property subject to existing laws can credibly claim that the existing law is a "taking;" the effect of the law on the value of the property was built into the purchase price.
14
@Paul '52 In other words, since a property with RS tenants is a money pit, no one will buy it from the a landlord desperate to unload it. Except, that is, for the big corporations (e.g. Kushner) that are then harassing tenants so they'll leave.
2
ridiculous. rent stabilized apartments should gave some level of needs based
7
Of course, but NYC is run by "socialist democrats." Their goal is to decimate private business and have as many voters as possible reliant on handouts, subsidies, and rent control. Fairness has nothing to do with it.
4
@Tall Tree Wow ! I've found the only other sane New Yorker. Well said !
Anyone who rents today in Manhattan—Studio $2500, One bedroom $3600, Two bedroom $4500–is paying the proportionate share of the entire new construction, management cost and a hefty profit for the developers. That is fair and the manner in which many New Yorkers choose to live. But what happens with the thousands of existing stabilized old and new law tenements and post war buildings that were fully paid off many decades ago, have a few new cabinets slapped into the kitchens in order to destabilize the units, and then charge these same exhortiant rents without any cost basis except pure unfettered greed?
What happens is that several unrelated millennials will crowd into one apartment, (see Stuyvesant Town) and then complain that the decades long stabilized tenants are able to buy a modest $75,000 bungalow on the Jersey Shore or New Hampshire. “Let’s drive everyone into poverty to further line the pockets of the hedge fund that bought the building” is their solution. Despicable.
9
@Patrick I am a millennial at the mercy of a tenament landlord, paying too much in rent. But your argument on “fairness” seems to be based around the cost basis of a new vs. old building. But I have to say many of these old buildings have substantially high cost basis because they’ve been bought and sold. As a result they have the same need for income as a new property
6
@Patrick If those several unrelated millennials are so self-entitled that they haven't the sense or gumption to move to one of the many commutable, very nice areas outside of this one borough among five, they deserve what they get.
One thing nobody has yet mentioned is that the rents for some outer-borough apartments are actually less than the legal regulated stabilized rents. The legal rents actually exceed the market rents in some areas and the apartments rent for preferential rents which are less than market. In those instances the only problem with rent stabilization is the paperwork or computer-work burden it places on responsible landlords who follow the rules.
You are right, rent stabilized housing is not a subsidy, but it acts like one. Rent stabilization is price fixing. I have a problem with amount of price fixing and subsidized rental housing in NYC. Over 50% of the rental housing in NYC is price-fixed or subsidized. Over 50% is rent stabilized, rent controlled, public housing, Section 8 or Mitchell Lama. It totally distorts the market. Perhaps The New York Times could write an honest article about that.
11
@David Binko
When you get your Con Edsion bill or buy a Metrocard or take a taxi, those are price fixed too.
1
@Patrick , your argument falls flat. price fixed housing impacts non price fixed housing by limiting supply in the free market. Your examples don't impact supply and demand like rent stabilization does.
3
@TomNYC
Gee, didn’t they just build Hudson Yards with it thousands of housing units, in fact, still building it?
1
The problem with rent control/ stabilization is that it favors one generation over another. While one generation can live a lifetime saving money and buying vacation homes the next generation can’t find affordable housing. It has become an entitlement for the few.
How many recent college graduates have been able to share in the reasonable cost of an apt?
There should be an overhaul of the system and perhaps a limit on how long you can actually keep a rent controlled apt. Perhaps we can make room for generations to come.
24
@Jeffrey
Well said Jeffrey. Let's help the younger generations.
8
The have yet to read a comment (ever) concerning the J-51 and 421a programs. These tax abatement programs are regularly adopted by rent regulated building owners.
1
Isn't there an income limit for maintain a rent stabilized apartment? $200k. Not sure.
It’s BOTH a household income over $200k (it may even be higher now) AND when the rent surpasses $2700 per month.
Only then is an apartment deregulated. Most situations meet one but not both conditions.
3
The rent stabilization system in NYC needs an overhaul - and I say this as a former stabilized tenant in NYC.
From '09-'13, I lived as a non-stabilized tenant in a building where about 50% of the tenants were stabilized. I payed $600-800/mo more rent than the stabilized tenants, many of whom had 2nd homes elsewhere - incl. Maine, Greece, Vermont, and Upstate NY. The super in the building was unionized and basically did nothing. When I complained to an acquaintance who was a stabilized tenant, she said, "It doesn't bother me because when things get bad, I just go to my house Upstate." This was a person who had received an inheritance and didn't have to work.
I moved in '13 into a building where everyone was a stabilized tenant. It reduced my rent by $500/mo and I lived there from '13-'15 paying $1400/mo for a large studio in Washington Heights. I worked 2 jobs and my income was around $70K. In '15, I received the lease renewal - rent was increasing $100/mo to $1500/mo - still a good deal for NYC, but I declined and moved to CA instead.
Now, I pay $955/mo to live in a very nice area in Sacramento. (It's a good deal even by Sac standards). My neighbors are peaceful and quiet and my commute to work is 15 min. or less. I love Sac and this is what I dreamed of having in NYC, but it was not attainable.
IMO, higher income people should not have stabilized apts. If you can afford to purchase a home outside of NYC, then you should not be able to rent a stabilized apt inside NYC.
5
@M
Sacramento is getting hot lately, especially after that Ladybird movie. So you will be okay with it when your rent goes up to $1500 next year?
3
@Patrick - Shh. Sac is still a pretty good secret and there are still great, affordable places to live here if you know where to look. My landlady is great! She actually values good tenants and cares about having good people in the building. She raises the rent modestly each year and is not looking to gouge. I realize nothing lasts forever but after what I have been through in NYC, I am eternally grateful for what I have now. There are some luxury places that are charging 2K for a studio as a lot of people from the Bay Area are moving here - and no, I don't want to pay that much in rent - not after living in NYC.
@M
You better start looking to buy. There is a mantra among good landlords: “Thank God for good tenants.” But the arrival of those techies is a sure sign that the end is nigh. Good luck.
2
The rest of America seems to just fine with free market rents. Why not here? I suspect everyone is going to jump and say that Manhattan is an island, with limited space and difficult logistics, seriously limiting supply.
I agree. But then what would be wrong with living in the boros or the parts of NJ that are PATH accessible. Stabilization reinforces the idea that a Manhattan apartment - not any old apartment - is a god given right.
13
@GG
What is god given is the right not to be ripped off by a greedy landlord no matter where you live. That is why all those crates of tea got tossed into Boston harbor.
6
@GG The outer boroughs have huge number of rent stabilized apartments.
5
@Patrick Many landlords aren't greedy. They're immigrant strivers who scrimped and saved to buy a property and would at least like to make a tiny profit, say 1% a year, instead of a money pit because of RS tenants.
Rent Stabilzation should apply to all rentals in NYC, even new construction. It is not a cap on rent, but an anti-price gouging law on an inflexible and monopolistic commodity. If Home Depot charged $300 for a $40 sheet of plywood before a hurricane, people would rightly be up in arms. But if a landlord decides to jack up the rent on a new lease by 50% because a neighborhood is suddenly hot, that is perfectly okay? Under the RSG, landlords get a virtually guaranteed increase indexed to their operating cost, which they always inflate anyway.
13
@Patrick Very weak analogy. No parallel.
A hurricane is a sudden event that is not possible to plan for. Alternatives are limited and time is of the essence. There is a real risk of bodily harm and damage.
A rent increase in a "hot" neighborhood -- unless you live under a rock -- should not be a surprise. You have many, many alternatives in our lovely metro area of 21m people. The only risk of harm is maybe to your pride if you can no longer afford to live in manhattan or your "hot" neighborhood in brooklyn. You'll survive.
1
@Patrick A monopoly is one company that controls a market, or a cartel that pre-sets prices among its members. How does that apply here??
I am all for rent stabilized apartments, as long as there is some type of limit on the number of years. For example, it’s a great way to get young and talented college grads to move to the city. But if they are there for 20 years, then obviously it did not serve it’s purpose. There should be a cap of 10 years on each of the tenants.
5
Disagree. I've lived in a rent-stabilized unit for 22 years, starting at 37. I make what would be considerate a middle-class income by NYC standards; over 40% of my income goes to rent. Without a rent-stabilized apartment I would not be able to stay in NYC.
Not everyone living in a rent-stabilized unit pays far less of their income in rent than those who aren't in one and we certainly aren't buying a vacation home. I'm one of those New Yorkers who make a decent income, but not enough to have ever saved to buy an apartment. There are many of us and we contribute to the city in various ways and shouldn't be dumped out of our unit just because we reach a certain age. Talk about age discrimination!
14
@KC You could live in NYC in a very apartment, just not in a hot area.
Other tax subsidized programs such as Section 8 also allow residents to own other residences with little to no effect on the amount of rent paid for their subsidized housing. There are residents in Section 8 in NYC that receive subsidies of $5,000 per month.
3
There are a lot of misunderstandings in the comments about how rent stabilization works and what it does.
When the law was originally passed it applied equally to ALL RENTALS, including for rich people or high rents. So the idea that it was designed for those of modest means is out - the system was designed to protect tenants from predation by landlords.
The idea that RS represents a "subsidy" is absurd. Landlords are in it for the profit, and NYC has functionally more people who want to live here than we can possibly hold, so the demand curve is basically vertical.
Many landlords will (lawfully or not) deregulate an apartment once the current tenant leaves, so it's not like most tenants who can afford higher rents should vacate because that unit will never be stabilized again in most cases.
Every building with stabilized tenants has stories about how the building sells, the new landlord gets out as many tenants as he can, and jacks the rents as high as possible. If we get rid of ALL stabilized units they won't do this everywhere? These are the same individuals willing to let their commercial space lay vacant for years or decades in order to get $800/sq foot. But they'll lower the rents when stabilized units go market-rate? If you believe that I have a bridge in Brooklyn you may be interested in investing in
23
Everyone I know in NYC rent stabilized apartments are quite affluent and bilking the system. They are not/were not blue collar workers and could well afford to pay more money towards their rent. They retire and stay and the rest of the people pay for them. Rent stabilized should be abolished and looked into. They pass these places down to their children and repeat the theft. I have seen it happen and know the income/s of these couples.
6
@Jan the system of rent stabilization was never originally intended to provide low-cost housing to poor people. It was designed to protect ALL tenants from landlord predation. When the current form of the law passed, it applied to ALL apartments in ALL buildings present in NYC. The state knew that not everyone in the city was poor, and the law was designed to apply to rich people's apartments too. The purpose of the law was to even the playing field in an environment in which the landlords hold all the cards.
8
@Jan Everyone you know? How many people is that? And it isn't theft, anymore than being lucky enough to buy when the market is low is theft. In my building, which is a mix of rent stabilized and unstabilized apartments, several of the people in rent stabilized apartments are older tenants, often widows or widowers on fixed incomes, who raised their families in these same apartments. Their grown children do not live in the apartments and therefore will not be able to take over the rent stabilized lease. The tenants in the few other rent stabilized apartments are middle class, and yes, one couple does own a house elsewhere. They are not, however, rich. These apartments are very small and the building has next to no services. At least in our building, rich people would move elsewhere! I'll note also that the market-rate apartments have enormous turnover, since rich people wouldn't live in these apartments and middle class people find they can't afford the very high rents for long. That is one problem that rent stabilization was designed to prevent, and I wish the entire building were still rent stabilized, for their sakes.
12
@Jan
Everyone I know from NJ does nothing but complain about their property taxes even though they are well off and can, in fact, afford to pay much more in property taxes. They are bilking the system that the rest of us have to make up in outrageous tolls every time we cross the GWB. The theft must stop now!
3
Rent stabilization didn't happen because people thought "oh goodie, let's create a way to cheat the system". Quite the opposite. Robert Moses, Helmsley, Uris, HUD, eminent domain ripped families apart.
Post depression attitudes seem like a gyp to us who watched real estate moguls like Sheldon Silver and Donald Trump sidestep any and every corner they could, wiping out the last remaining family neighborhoods finally with the help of Don Giuliani and Bloomberg.
David Dinkins burned out the homeless during his tenure as mayor, too.
I knew someone who was begged to move in and stay even after his building went co-op with a stabilized apartment, and although he eventually did have a couple of nickles to rub together, his money was entrusted to large literary prizes.
The moral of the story is, decent people need a break against the mongering trumpy crooks and like simply and decently contributing that good faith back into the community. Why don't you instead of promoting more death on street corners and park benches?
6
@rubbernecking - Bravo! Throughout the years, I've had several rent-stabilized apartments with lack of service, fixer-uppers, rodents, non-working refrigerators and stoves and lack of heat or hot water. Just check 311 complaints. Sometimes one gets what they pay for. It used to be easy to find a RS apt but lots of people didn't stay long because of uncaring, greedy landlords. I was always told the RS apartment was leased 'as is.' Take it or leave it. There are now less than 1 million apartments that are RS and we're losing more each year. IMO, many people who resent RS tenants wouldn't change places with them if they were really aware of some of the terrible conditions in these apartments. We need more affordable apartments - not people who can rent a pied-a-tier for $5,000 and never live in it and drive up more mammoth skyscrapers.
2
don’t turn this into a hate-fest on neighbors that have more money than you. Anyone would take a $1200 a month condo in NYC. How can you blame them? Plus, it’s not illegal.....so there’s that.
10
No not everyone would take $1200 from Robin Hood that was STOLEN at gun point from someone else. Theft is the forced taking of private property. The landlord is being looted. And at the bottom line it is enforced at gunpoint! If I refuse to renew rents at the Government ‘s whimsical price eventually an armed marshal would appear at my door.
1
@Attilashrugs
It is not theft from the landlord because the landlord acquired the property knowing the rent control is in place, and property is priced accordingly at time of purchase. The government is not looting at all. I can't believe how that simple concept does not sink in.
3
It is theft from those who want to live in NY but can not get a stabilized apartment. The prices of non-stabilized apartments are far higher than they would be otherwise.
It is now a sloppy mess, with millionaires benefitting, and poor and middle class suffering.
2
Will someone please tell the Times and those commenting that there ARE income restrictions on rent stabilized apartments. Under the rules if a tenant makes more than $200,000 in two consecutive years , the landlord can charge market rent and landlords are entitled to ask for tax returns. Let's stop with the fake "Welfare Queen" Reagan era lies. There are abuses on both sides and remedies but no a millionaire does not get to keep a rent stabilized apartment.
7
@Jessica The $200,000/year income threshold doesn't take effect unless the rent in the apartment naturally rises above the level set by the state called "high rent decontrol." Currently that amount is $2733/mo. A millionaire living in an apartment that is $2000/mo does not even have to provide his income tax returns to his landlord.
7
@Jessica, and even if the rent exceeded $2733, wealthy residents can continue to game the system by funneling their income into trusts or LLCs with the intention of lowering their net incomes. The rent regulation system in NYC is a pathetic handout that allows the wealthy to maximize their savings.
2
"these rules were designed to address a persistent housing shortage" This is the law of unintended consequences writ large. Rent controls directly CAUSE housing shortages. Nobody is foolish enough to build rental housing in a city that tells you how much you can charge for rent.
5
@btb
there are plenty of rentals being built in new york. i don't know about southern california.
4
Well, I read the first couple of dozen comments and - as usual - wasn't surprised by level and degree of ignorance, anger, and stupidity.
To recap, rent stabilization (and rent control) is not a subsidy. No, you can't call it a subsidy because non-regulated tenants pay more, that's not what a subsidy is. No, rent-regulation was not intended to be means-based (and that it has gone oh so slightly in that direction is a shame, but that's the way the wind blows: and yet there are still millions of units and tenants covered). No, tenants should not have to share their tax returns with their landlords. No, rent-regulation is not an undue or unexpected burden on landlords - they knew this going into whatever property acquiring they happened to get themselves into. No, it's not stifling new development, as the vast majority of new builds fall outside of the rent regulation system.
I've lived in rent-stabilized Manhattan apartments for just about all of the 25 years I've been in NYC. I make about $90K and, as a teacher, have summers off so I spend the summer months at my place upstate. I eat out. I go to the theater.
And you know what? I wish you could all do the same: not so long ago, you could have. But the government has chosen to chisel away at the protections that rent-regulated tenants enjoyed. And, instead of all of you clamoring to change the laws back, your solution is that the system be dismantled entirely. As if that would somehow brings rents down. In NYC. Ha.
24
You fail to address the oft repeated point here that, while the landlord is not subsiding you (because the purchase price of the building reflected the rent stabilized status), the rest of us are in the form of higher property taxes. I see how pleasant stabilization has made your life but don’t understand why you see no issue with people not very different from you (income level, job status, age) paying for that.
7
@GG
Everyone pays higher property taxes because of rent stabilization? That is patently absurd as there is absolutely no connection between the two. Other than operate the Rent Guidelines Board, not a penny of the city’s $68billion budget goes to rent stabilized tenants or their landlords. If anything, the landlords are paying less property taxes with their two sets of books accounting.
Property taxes are based on the assessed value of a building. A stabilized building carries a lower assessment because of limitations on its rent roll. Hence it is generating artificially low property taxes. And this strain on the city budget is made up by high taxes on non regulated buildings.
4
My building is 100% coop. No stabilized tenants.
Let’s make this simple. My maintenance before debt service is a proxy of what it costs to run a building. And its about 25% higher than comparable - meaning UES 1960s white brick doorman - rent stabilized apartments in the neighborhood.
That different is the result of two things: lower property tax assessments on those stabilized buildings, which the rest of us have to make up. And deferred maintenance.
5
@GG
But you are going to make tens of millions when you sell that coop that you bought for a mere fifty thousand back when the building converted. Those rent stabilized tenants will get back not one cent despite paying years of rent that would have paid off the mortgage on a ten bedroom mansion in the Midwest. Sounds like you are the one clamoring for a property tax subsidy on the goldmine you’re sitting on.
8
Actually coops are assessed at the same rate as multi family properties. Apartment buildings aren't "stabilized," individual apartments are. Call Czar de Blasio if you don't believe me.
1
Many folks confuse "rent stabilization" and "public housing." The former was an attempt to keep the NYC of yesteryear from turning into what CA is right now: a city with several classes of the ultra wealthy, and a huge chasm separating the working poor and abject impovished. The reason rent control worked to the present is because we know from real academic fact that people--married couples specifically--who make less than $120,000 spend much more of their disposable income that those above that bracket. This extra income allowed these folks to be able to afford children, many of which stayed in the NY area and themselves entered the middle class or higher. As such, rent stabilization is a longitudinal investment in an income diverse society.
As has been reported frequently on these pages, an income diverse NY is dying. Local zoning boards in the city aggressively approved new buildings on abatement throughout the recession and very few new units were given over to any affordable housing strategy. When the working classes can no longer afford to live in the city, commercial property will dry up like a grape in sunlight. The commercial glut will eventually drive some developers out of ownership and through myriad lawful schemes the city will eat this revenue loss. Homeowners taxes elsewhere will go up. The city will then ask Albany for larger shares of shared state funding for cities. All New Yorkers will pay a little more to keep NYC afloat for the upper classes.
12
The system isn't just. It doesn't even seek to help those who need help. Ideally it would be like a progressive tax that goes up on a percentage basis point by point depending on how much you make with infinite but easy to calculate variations. Instead it operates in the most primitive way imaginable —as territory, those who control the territory rule. Need doesn't even enter into the equation.
The depth of the byzantine corruption was laid bare when it was discovered that former Congressman Rangel in Harlem had not one, not two but three rent controlled penthoused given to him by a developer with interests before him. Cuomo shut down the anti-corruption commission when it touched upon reals estate money. To say the problem goes to the top is an understatement.
Repeal and replace the system. If no one has the courage to do that then simply kill it. A lot of people would have to move, but it wouldn't kill them. Make exceptions for the disabled and the elderly but for everybody else -no. Then tax the landlords rental take in order to finance more housing construction because supply brings down price not corruption.
7
What could it possibly mean:
"Instead, these rules were designed to address a persistent housing shortage ... by capping rents and providing tenants with protections."
Rent-stabilization makes it much less likely the developers will want to build any more units since they don't make back their investment as easily.
9
@Amy and yet there have been more new buildings constructed in the last 20 years than there were in the previous 20. Many of these landlords took 421-a tax abatements that require 100% rent stabilization (in exchange for up to 90% property tax reduction) and then turned around and charged market rates anyways.
Most rent stabilized units are in buildings constructed before 1974. NEW buildings aren't subjected to the law unless they take one of several property tax abatements. Please learn about how the system works before you comment on it.
11
The new buildings are not rent stabilized.
1
@Amy Rent-stabilization only applies to pre-1977 properties. Ones that were built after that are free market rentals.
Tax returns should be submitted in order to benefit all.
It wouldn’t take a rocket scientist to figure out bad actors.
11
@PM
After Trump releases his!
4
Coming from a family that at once owned rental properties in Manhattan Mr Dulchin's rather breezy "I don't think that's a bad thing at all. That's the way the system's supposed to work" sets my teeth on edge. If New Yorkers were all that concerned with providing affordable housing, then the City and State would float bond issues and build public housing galore. But, there is no appetite or budge for that. Instead, since property owners can't pick up their buildings and move elsewhere, they become the ultimate targets. I suspect Mr Dulchin would sing quite a different tune if I decided to go into his 401(k) and dictate exactly what he could or could not invest in and restricted him to some lowball rate of return.
13
@welledited "since property owners can't pick up their buildings and move elsewhere, they become the ultimate targets."
Actually, you might be surprised how many people like me there are -- "rent stabilized" tenants in their 70s who can no longer afford the $2,500 rent on a one bedroom apartment who are giving up their apartments and moving elsewhere. Maybe property owners are unable to move elsewhere, but plenty of middle class seniors like me are either moving out of state or out of the country. If my rent were only $1,200 I could afford to stay here, and no, I do not and never have owned a country property.
11
This article is absolute nonsense from A to Z. As many here have pointed out, giving a rent stabilized apartment to someone who an afford a house means that someone of lesser means can't rent it. The situation is precisely not what was originally intended. Sometimes progressives can be as clueless as republicans.
44
@JaneDoe Many people in rent stabilized apartments are seniors, some of whom would like to buy but can't because of the rules of NY lenders, so are stuck. I know; I am one who tried to buy an apt. whose total monthly cost (mortgage, monthly coop maintenance, insurance, etc.) would have been half what I am paying in rent.
7
“There is a flaw in that argument...Rent stabilization is not a housing subsidy.”
The flaw, friend, is in your logic. The subsidy in this case comes from the rest of New Yorkers who have to pay above market rate rents as supply is squeezed and prices bid up for those remaining uncapped units. Why can’t people realize that rent control is precisely a key cause of high rents for uncontrolled units, especially as new entrants flock to the city to fight over scraps. This stagnates and degrades the housing market, as controlled units are handed down over generations and over 1 million units are effectively kept off the real market. If you can’t afford to live somewhere, then move elsewhere. I don’t recall the Bill of Rights saying anything about a right to cheap housing in the world’s most expensive zip codes for a select few while everybody else is left holding the bag. Shame.
31
@John I live in a building that was maybe 90 or 95% stabilized when I moved in 25 years ago and is maybe 25% stabilized now. Guess what? After getting all those stabilized tenants out the owner (a large corporate owner of thousands of rentals in Manhattan) can no longer get the high market rates it thinks it deserves. So what does it do? It rents them out as airbnb-type "30-day furnished rentals" (without any obligation to actually stay for 30 days). So in addition to telling stabilized tenants to move elsewhere, you need to be telling tourists to visit elsewhere.
8
I think that rent stabilization without regard to the tenant's financial situation is a travesty. I say this as someone who lives in subsidized housing because I'm low income and have no financial assets. Affordable housing should be reserved for those who need it.
30
@Pam Shira Fleetman
Rent Regulations are anti-price gouging laws, not the welfare housing subsidy that you benefit from because you have no assets. Most RS tenants ln NYC actually pay what would be considered market rate or even much more in comparative value than in the relative boonies of Acton MA. Look at what is happening in South Boston, Southie, where even the working class home owners are being forced out because of skyrocketing tax assessments.
4
I live in a rent stabilized apartment. It is a one bedroom. I am a college professor, with a full time job and steady income. Still, I would not be able to live in NYC if I had to pay market rate. In addition to paying rent, I am have been paying off student loans, and will continue to for another decade. There are many people like me in NYC. I do not live in a luxury building. I live in a fourth floor walk up. If people like me -- middle-class, employed and a contributors to the intellectual and creative life of the city -- did not have this option, unless they have independent income or family wealth, we would not be able to live in this city. This would be a huge detriment to its cultural and intellectual life.
41
You’re clearly not an Economics professor. The end game under the scenario you describe - the ordinary folks being priced out, to the detriment of the city - would be some combination of rising salaries and lower rents.
4
@JRW
"This would be a huge detriment to its cultural and intellectual life."
This is a weak, self-serving argument. I speak as an English PhD and former adjunct English professor in NYC. First, I am not sure that sitting in a cafe reading John Updike or John Milton truly contributes to the culture of NYC. I did it for many years. Second, every PhD outside of STEM knows they will not make enough income to live or live well in a top tier city. That's the trade off for getting to spend your life sitting in cafes reading John Updike or John Milton. You don't get to do that AND also own a 2000 sq ft condo in SoHo. The people I know who own nice property in NYC work 60 hrs a week at jobs they hate.
Plenty of towns need more intellectual culture. Indeed, every single town in the USA needs more intellectual culture. Go live and teach there and enjoy a higher standard of living. Albany is waiting. Hartford is waiting. The University of Scranton is calling you. If you're an academic in NYC or Boston, and your name is not Stephen Greenblatt or Simona Schama or Sophie Gee, you should be happy if you don't have a housemate in a band and a 55 minute commute to office hours.
14
Rent stabilization is actually keeping folks like you out of New York. Rent stabilization is artificially keeping market rate higher than it would be otherwise. Yes you’ve “won the lottery” I’m finding a regulated apartment, but plenty of other teachers and professors cannot adopts market rent, and cannot find a stabilized apartment.
Many of the folks championing stabilization are speaking purely out is self interest.
6
I have been on both sides of the issue in the last 50 yrs. People abuse the system on both sides.
Yrs. ago, the tenants abused it more with rent control, rent stab. etc. Landlords abandoned apt. bldgs. in droves.
Now the shoe is on the other foot since living in NYC is very desirable and if you are rent regulated you have a big bull's eye on your back even if you follow the rules.
After seeing everything I think the best way is to have minimums and maximums on rent. A minimum so the landlord can survive and a maximum so the tenant can survive.
Let the market determine the rents in between.
If you don't do this you have the totally unfair situations where somebody is paying $100 a month rent for a two bedroom and the guy on the other floor is paying $3,000 for the same apt.
14
A rent minimum is meaningless. Since no one can force a tenant to pay more for an apartment than its value. If a run down apartment in a bad area has a high minimum rent then no-one would choose to live there, or should the government intervene in that case?
Maybe the government should just take everyone’s property and decide who gets to benefit from it?
1
Rent stabilization increases rents on the rest of us by taking supply out of the system
They win, we lose
Bad policy
26
@DMB
So what does Rent Stabilization in NYC have to do with Macedonia? I hear that everyone pays cash over there to evade taxes.
4
"Market Rate" is nothing by a lie promoted by landlords to justify insane rents.
We should be more concerned with that court where someone who paid their rent on time every month was kicked out of their apartment because the landlord never cashed the checks and claimed they did not pay their rent (see the NYT story about the court from some months ago). That "judge" should be impeached. That judge, according to the story, refused to let the tenant provide the evidence they held to PROVE they paid their rent.
Advise: Pay your rent with a USPS money order and not a personal check. OR, make arrangements with your and their bank to directly transfer funds on the first of every month. The bank, unlike the landlord, won't lie.
10
This is perhaps the most polite way of telling someone to be quiet and go back to their seat that I’ve ever read.
13
@AJ Michel - it is not particularly polite, as it comes across as a lecture to mind one's own business without addressing the substance of the complaint. It is also logically flawed, in that it attributes the high market rate to the fact that there are not enough apartments to go around (when, of course, there would be more available apartments / lower market rate without rent stabilization removing tons of apartments from the market).
There are some decent argues for forms of rent stabilization, but this fails to present them. It reads more like the reply of someone who is living in a rent-stabilized apartment and doesn't appreciate that market-rate payers may have some legitimate complaints about the scheme as it now exists.
14
Rent control is not a debate over affordability. Nearly every economist agrees rent control is bad for housing markets. Despite origins in WWII, rent control is actually designed to enable tenant constancy. If you can find a rent controlled apartment, you don't need to worry about moving every few years as you get priced out of gentrifying neighborhoods.
Rent control is about building reasonably stable communities. A revolving door on housing is a bad thing. The repercussions reverberate throughout the local economy and home values specifically. You don't want a new tenant as a neighbor every six months. That's bad for your property's value. Putting up a "for sale" sign isn't going to help either. The new owner is likely to be a foreign investor seeking to rent the apartment.
Besides, the debate over New York rent control is overblown. There are fewer than 30,000 rent controlled apartments in New York City. There are over 2.5 million apartments according to the last census. That's just north of 1 percent. Who cares if your neighbor is one of the lucky few? They are probably retired anyway. Hence the vacation home.
13
Rent control is an old program, replaced with less restrictive rent stabilization. The number you cite is the few remaining apartments under the old regime. There are more than 1 million apartments under the newer rent stabilization program.
7
This is a ridiculous point of view. Of course rent stabilization is a subsidy. All price controls are subsidies of the consumer. If you go to Venezuela and see that they can buy gasoline for 25 cents a gallon, do you say “that’s not a subsidy”? Of course not. Rent stabilization turns out to subsidize tenants’ second home purchases all too often. This is just gaming the system and should be stopped.
26
Sorry. The taxpayers are most certainly subsidizing rent stabilized apartments, although indirectly.
The landlord is collecting less rent and therefore paying less income tax that he/she would otherwise. And owners of stabilized apartments appeal their property taxes because...you guessed it, they have a below market tenant.
We all pay the cost through higher taxes on ourselves and/or fewer public services.
Now, we may decide we want to indirectly underwrite other folks' lifestyles (including their second homes), but do not for one second think taxpayers are not footing part of the bill!
24
@Will. Actually, if anyone is "subsidizing" stabilized tenants (and I find it hard to believe anyone is subsidizing the $2,500 I pay for a one bedroom) it is not the taxpayer or "market rate tenants," but the tourists who are paying $200-$300 a night for one bedroom "30 day furnished rentals" (w/no obligation to stay for 30 days) to building owners like the one that owns my building and thousands of other units in Manhattan. Owners are not happy with what "market rate" fetches in this market and are instead going the airbnb route.
3
Maybe I missed it, but all of this discussion seems to be about justifying rent stabilization based on who is or who is not paying for it, and what might happen if they convert to market rates. Nowhere do I see the most important objection raised: A rent stabilized apartment that is occupied by someone who can afford numerous luxuries is an apartment that is OFF the market for someone of limited means. Rent stabilized apartments should go to people with limited income and limited means who could otherwise not afford to live in the neighborhood. Period. Others are taking advantage of the system. As usual, this discussion is dominated by the privileged class of Manhattan residents who benefit from and justify the status quo.
43
Ronda Kaysen should be required to frame Michael's comment and post it somewhere conspicuous in her (rent-stabilized?) apartment. It is obscene that anyone -- landlord and/or taxpayer -- should subsidize wealthy tenants.
I suggest that no federal housing moneys go to New York as long as there is rent stabilization. And all progressives who occupy rent-stabilized apartments should have a scarlet H branded on their foreheads.
9
@Michael
If a well off rent stabilized tenant moved out under current law, the apartment would simply be renovated and destabilized to market rate. The argument that some underprivileged individuals are being deprived of affordable housing is just willfully false. It is like saying that highly paid executives should quit because younger MBA graduates are being frozen out of those job.
12
@Michael
It’s true that the fact that some rent stabilized apartments are occupied by people with expensive vacation homes is maddening. But what is the solution?
When I graduated with my masters degree in 1981 and got my first full time job with a tiny salary I had high hopes for my own apartment. Thanks to rent stabilization I could afford one. When I married I moved out to a private home.
But what if that hadn’t happened? What if I never married and stayed in my apartment all my life or my husband moved in and we lived there for decades? My salary rose steadily and reached a point where I probably could have afforded to buy a weekend home. And had my husband moved in, maybe two.
At what point and by what mechanism could people be booted out of their homes because, over decades, their wealth increases? Sounds like evicting people because they worked hard and were successful.
On the other hand, one of the variables causing people’s wealth to increase is if their housing expenses are low. They can save more. So rent stabilization subsidizes their savings and actually contributes towards their vacation houses.
A conundrum indeed!
3
The problem is that this doesn't "address" a housing shortage. It exacerbates it. Pretty sure I learned in Econ 101 that if you set artificial price caps then you cause demand to exceed supply. All rent stabilization does is push the prices of non-stabilized apartments up. It benefits a lucky few at the expense of the many.
24
@Concerned
No it doesn't. Claiming it does is nothing by parroting any Introduction to Business textbook.
Now, you're economics 101 (again wrongly) might talk about "price caps" but that is a situation when ALL HOUSING is capped at a certain price, and that isn't happening now, nor has it EVER occurred.
It's NYC real estate. When has it EVER GONE DOWN? I'll tell you: NEVER, regardless of how many or what PERCENTAGE of "housing units" (however that is defined) are rent controlled.
In other words, "rent control" does not drive up the price of non-controlled units. That's a lie slumlords everywhere want you to believe because they are not able to bleed every penny out of every square foot. Greed is what drives up the price of rents. Greed that makes permanent housing unaffordable to those who otherwise could afford it.
And you know what happens to controlled units once they become un-controlled? They suddenly command insane rents AND the suggested price of other, available units stay the SAME, or rise as well.
Textbooks may be good as a reference. In the real world reality has a way of rendering "the way things work in a perfect textbook scenario" incompatible with reality.
7
@matty Actually, New York real estate may not have gone down in your lifetime, but it has gone down many times in the past, most recently in about 1990, when apartment values dropped by about 50%. In the early-mid 70s they dropped so much some people were not able to unload their apartments at any price.
1
Everybody's so concerned with what's "fair." Apparently, no one considers that charging $2,000, $3,000, or $4,000 or whatever for a small, 1-bedroom apartment is unfair. Those of us who live in the rest of the country see the prices for rent in NYC and faint. How are those prices fair to anyone? How do normal people, clerical workers, retail workers, service employees ever pay such rents? "Unfair" is relative, it would seem. I don't have much sympathy for the folks complaining about their neighbors. If they were the ones with the rent control, they'd be buying 2nd homes and smugly defending their low rent. Sounds like just jealousy, to me.
44
Rent-stabilized just like rent-controlled apartments are subsidized housing, it is just that the taxing and the subsidizing are made in a circumvoluted way so whoever designed it could pretend it was not a subsidy and did not result in a tax (that circumvolution results in lots of abuses, from the wrong people receiving the subsidy to owners cashing in by returning to market rates).
If you’re forcing a developer or a landlord to provide housing below market price, that owner suffers a loss, and from a financing point of view there is no difference between doing that or just taxing them directly. Similarly from the tenant’s point of view it makes no difference between being offered the apartment at market price and receiving a cash subsidy to pay for some of it, or having the landlord forced to offer it at below market price. And taxing the supply to subsidize the demand is hardly a sound housing policy.
Besides, in some instances developers receive tax credits in return for providing price-restricted housing (receiving more than they are paying, otherwise they wouldn't be doing it). Which makes it even more obviously a tax/subsidy scheme (because every taxpayer pays for it, rather than just the developer).
And that is just the fiscal point of view. From a housing market point of view, subsidizing demand (thus increasing it) and taking apartments out of the market (thus reducing supply) is paid through higher prices for tenants and buyers.
18
@Bob Robert
Yea, a "loss" more than made up for by the price of every other non-subsidized unit. A "loss" perceived because their "maximum per unit cash flow" is interrupted.
Said developer or landlord has a choice. You want to be a player here, then here's the rules. Otherwise, develop something somewhere else.
1
@matty You can argue that developers make enough money anyway, that is still a tax.
You can argue that developers accept the cost of taxes by going into this business rather than another one, that is still a tax.
And when you think about it, it is a tax on supply, to subsidize demand. A tax that many manage to avoid (by using loopholes to bring units back to market price), and that is not very good at targeting the right recipients (cue people who are benefitting from it but who would clearly not be top of the list if we were to decide who gets this subsidized housing). So yes: it is a wonky scheme.
2
Stories like this are nothing new. I have a friend who sold his business many years ago for millions. He has a very nice house and very nice cars, everything which had been paid for in cash. Since he needs very little to live on, he doesn't declare much income, just enough for the usual groceries, gas etc.
Imagine my surprise when he told me that he has an Obamacare policy covering him and his wife and that they get most of it paid for through a subsidy. I was incredulous to this, especially since I'm a self employed and pay over $2k a month for me and my wife's coverage. As explained to me, he said that he draws just enough income to make it under the income maximum which would phase out his subsidy. He went on to explain that the exchanges don't care how much you have in assets, only what income is shown on the 1040 each year.
Doesn't seem quite fair does it?
27
I know someone who was getting subsidized heat because her income was low (huge retirement accounts). I think the utility company eventually figured it out but it was infuriating.
4
@Marc Jordan
The entire tax code including the manner in which some individuals can utilize it and the way it affects the ACA is unfair. Warren Buffet told us that. You're right, no surprise and nothing new.
2
@Marc Jordan It certainly doesn't seem quite fair for you to pay so much for health coverage, but the problem is larger than just your friend's particular situation. You have to pay so much, because people who make a lot more than your friend lobby for and otherwise influence legislation that allows corporatized medical care in America to remain artificially expensive. If instead of repealing the ACA we moved toward single-payer coverage, your problem would go away, because costs would decrease and you'd no longer have to subsidize a bloated health-care industry. And to your point, your friend's Obamacare windfall, like the tale of the stabilized renter sitting on untold riches (why does the phrase "welfare queen" come to mind?), ignores the majority of beneficiaries of those policies who wouldn't be able to afford health insurance or NYC housing, respectively, otherwise.
2
I don't know much about rent stabilization, but, if I am correct, it's not common in TriBeCa, Battery Park City, SoHo, and the UES around 57 and Madison. My point is that those are the areas I like to live. So, if I wanted a rent stabilized place, I'd have to live in what I consider to be a less desirable neighborhood, which would be a sort of sacrifice in terms of preference. Also, are the Berkshires supposed to be nice? they are certainly not South Fork or even North Fork. I had a friend who built a small vacation house near Roscoe NY. It wasn't much more than a 3BR cottage on rocky land. Not that different from owning a trailer home or something. having a second home in the Berkshire sounds luxurious, but it could be a tiny fixer-upper and very far from a Bridgehampton beach mansion.
If I had the money (which I do), I'd rather pay normal rent to live in a neighborhood I like (TriBeCa, BPC, SoHo, FiDi) than get stabilized or controlled rent in neighborhood I do not like (UWS, Murray Hill, Lowe East Side, Hell's Kitchen), but I'm a guy who'd rather ski in Colorado for 7 days than ski in Vermont for 12 days (if both cost the same)
7
@richguy
To clarify, I should add this: i wouldn't live in NYC, if I couldn't live in certain neighborhoods in Manhattan. So, if I were offered free rent in Brooklyn, I'd probably turn it down and go pay rent in Boston or Montreal. Furthermore, I probably wouldn't vacation in the Berkshires, even if I were given a free home. Years ago, I was offered free housing (a 2BR) in Davis Square (Massachusetts). I wanted to live in Manhattan. So, my general attitude is go ahead and enjoy cheaper rent, but you can't live where you want to live, and, to me, one of the goals of life is to live in the exact zip code you want.
3
@richguy - "Davis Square (Massachusetts)" Somerville, a short walk to Tufts (Medford).
@richguy - "Also, are the Berkshires supposed to be nice?"
GORGEOUS there! Cutural; outdoorsy; tons of universities.
1
Why isn't rent stabilization treated like public housing? You pay a percentage of your income for rent. You have to provide income verification annually. At some point, you pay market rate rent.
17
Because liberal politicians like de Blasio get more votes when they promise "completely free" versus "partially free."
Actually it suggests that I’m a long time New Yorker that remembers the name of the program that preceded the current rent stabilization system and sometimes lets it slip off his tongue. I am well aware of the differences between control and stabilization.
Why does a coop have debt? Coops are corporations that in simple terms have one major asset - the building - and more often than not one major liability - a mortgage on that building. The fact that they are responsible for a share of that liability is a major reason why coops are cheaper than condos. Condos come with no building wide debt.
Coops exist to break even not generate profits.
My point is that if you subtract the cost of servicing that debt from monthly maintenance payments you get a very good proxy for what it costs to run a building. And that number is higher than what stabilized tenants are paying for similar apartments. The difference is attributable to lower property taxes on rental properties - increasing the burden on the rest of us - and deferred maintenance. Neither is good for the city.
8
GG - You make a good argument, however I don’t think you should subtract debt servicing. For most co-ops the board will use mortgages to fund necessary maintenance & capital projects (eg replacing the roof, repointing brickwork, etc). By taking out loans instead of levying huge assessments co-ops can borrow and spread the cost of these items over several years. This was the strategy used by our co-op when I was treasurer.
Condos can also take out loans, but different rules in their governance make it more difficult, and thus more likely they will instead make an assessment.
In this case the Condo fees/tax probably understates the long run costs of that building since it does not account for inevitable assessments.
1
There's nothing wrong with this from a legal perspective, but the author doesn't address the fact that there are problems with this from a public policy perspective. As other commenters have correctly pointed out, there is a transfer going on here. The City is limiting the value of this unit, which limits the property taxes it pays.
There are good things about rent control. It helps keep people from being displaced and keeps some economic diversity in a city, but there are also many, many downsides.
19
@Pete
No, it doesn't. Property tax isn't based on rent received. That's income tax. This is RENT, not ownership.
3
@matty
The assessment by property tax collectors is derived from the value of the building. The value of the building is derived from the amount of revenue it collects. If you had two identical buildings and one charged rents that were twice those charged by the other, the higher rent building would pay higher property taxes. The owner of the higher rent building would also pay higher income taxes, even after deducting his property taxes.
2
@matty
" Property tax isn't based on rent received. "
Actually in NYC, it is.
Rental properties with 10 or more residential units (about 170,000 buildings, which make up 3/4ths of all rental units in the 5 boroughs) are required to file a form called the "Real Property Income and Expenses" (RPIE) with the department of finance (DOF). The DOF uses the building's property class and the data from the RPIE to calculate the building's property taxes. So if your income goes up, your taxes go up.
Ronda neglected to mention that rent stabilized tenants DO pay for capital improvements. Not through condo/coop assessment fees but rather through Major Capital Improvements (MCI's) filed with the state's department of housing and community renewal. A landlord can pass along costs of certain types of capital expenditures by amortizing them across 108 months per room in the building.
And, of course, the idea that these apartments are "subsidized" is of course absurd. No state agency contributes tax dollars to these tenants except for the tiny percentage of them that are receiving SCRIE or DRIE.
16
@Ben of course rent regulated apartments are subsidized. They are subsidized by market rate housing that is more expensive because regulated apartments are off the marked.
22
@Jennifer There are 250,000 vacant apartments in NYC. Rents could easily come down and those apartments would no longer be vacant. This has nothing to do with rent stabilization.
1
@Jennifer In larger buildings, subsidized tenants are not being subsidized by market rate tenants. Most big landlords can no longer get the "market rates" the feel they deserve; so they are doing short term furnished rentals for $200 -$400 a night. If anyone is subsidized stabilized tenants, it's tourists. Maybe they should demand a reduction in their nightly rates.
"They pay shockingly low rent, like $1,200 for a three-bedroom, and don’t have to pay the assessments for capital improvements that owners pay."
Dear Questioner: The New York Times neglected to mention that rent stabilized tenants most certainly pay part of NY State approved building-wide Major Capital Improvements, for example a new boiler or roof. There's a formula based on number of apartments (rental or not) in the building and number of rooms with windows in each apartment.
So besides hoping that you understand the NY Times' answer, which is valid as far as it goes, hope you apprehend how little you understood before you made your query.
Also, 14,000 dollars per year is a great deal of money if your annual income is $40,000. Think about that next time you tip a waiter, visit HomeDepot, go to the Apple Store, or buy a Vente at Starbucks.
23
@Yaj
YES, $14000 is a lot of money if your annual income is $40000. BUT, I highly doubt people in that income are able to own houses elsewhere!
Why should the landlords suffer loss of ROI?
12
Rent stabilization enables longtime New Yorkers to stay in their hometown. Do we really want a city full of Wall Street carpetbaggers who pay high rents until they have children and move to Westchester?
12
@karl
People in many areas can qualify for a $120,000 mortgage on $40,000 taxable income, and their mortgage payments are substantially less than $1200 per month, even after adding required insurance and property taxes.
The fundamental problem for society with giving rent stabilization for to our richer neighbors is loss of tax revenue. Rent stabilized tenants should be taxed on the monthly savings as if it were income. Realistically it is a return on the investment they made in living as this article alludes. Additionally, many Co-op buildings achieve lower property taxes when benchmarked against buildings with relatively lower net rents resulting from rent stable rents. Once politicians realize they need to expand the tax base by closing these gaps they may be able to fund the existing public worker pension obligations in the future.
13
There's no question NYC would take in billions of dollars more in property taxes annually if rent stabilization were eliminated. The money could be used to build housing for the poor.
But it will never happen because "socialist democrats" like de Blasio rely on "gifted" voting blocks like the 2,000,000 rent stabilized tenants whose votes they're effectively buying by keeping the wartime rent laws on the books.
1
Stop with the nonsense that the landlord is subsidizing or losing out somehow. He bought the apartment based on a rent stabilized rental income. So instead of paying $2 million per apartment, he only had to pay $400,000. So if rent stabilization goes away and rents become market rate, almost ALL of the benefit goes to the landlord. Ending rent stabilization is simply a huge transfer of wealth from the rent stabilized tenants to landlords. Who thinks that’s what NYC or the US needs? More money transferred form the middle class to to the 1%.
84
Correct. Its not the landlord that’s loosing - its the rest of us having to make up for the lost real estate taxes from having that apartment assessed at the artificially low valuation that results from rent control.
I live in a very ordinary coop and as a board member am very familiar with its finances. My monthly maintenance before the portion of which goes to the buildings debt service is a good proxy for what it costs to maintain an apartment. I can tell you that about is about 25% higher than what similar stabilized apartments are renting for. The difference is higher real estate taxes and deferred maintenance in the rental building. Neither of which are good for nyc.
22
@GG
Why does the building overall have any significant debt?
Also why are you referencing "rent control", such misuse of terminology suggests a huge ignorance of the rent regulation laws in NYC and NY State.
1
@Mike that problem is easily solved by charging owners a fee to get out of rent regulation. If the price is set right, there is no windfall to owners. The city would be able to use the money raised to improve public housing or provide other means-tested housing assistance.
5
The problem is not the rent-stabilized tenant - paying $800 for a two-bedroom apartment, with a vacation home in the Caribbean --
The real problem is the rent-stabilized tenant - paying $800 for a two-bedroom apartment - with a roommate who is paying $1,200 to live in the second bedroom, while unaware of the illegal arrangement --
Or -
The rent-stabilized tenant - paying $800 for a two-bedroom apartment - but lives with her boyfriend - while illegally subletting the apartment for $2,200 a month - and maintaining the Con Ed account and a phone number at the apartment as a means to deceive the landlord into believing she still lives there -
For those people who legally maintain their stabilized apartment as their primary residence, while paying their rent on time and observing the regulations of the New York Rent Guidelines Board - if they also happen to have the resources to own a "vacation home" elsewhere - it's their legal right and they are perfectly free to do so...
37
@Howard G The situations you have described are illegal under rent stabilization law and grounds to evict the primary tenants -- which owners all over town are doing.
1
@Howard G
All of the situations you describe are illegal and grounds for swift eviction. Landlords are not stupid and are happy to find grounds to evict rent stabilized tenants and unlike say non payment of rent these evictions are fast.
2
I'm a NYC landlord. It's very hard and expensive to evict a tenant for non-primary housing reasons. The burden is completely on the landlord. Over 25 years of owning and managing apartment buildings, I've never won such a case, though I've tried.
How can the author, who write weekly about real estate, not know the NY Court of Appeals (the state's highest court) ruled in November 2014 that rent stabilized apartments ARE a form a public assistance, akin to disability benefits or welfare? Was this ignorance intentional, or in error?
20
@Donna Gray Ms. Gray, you're evidently referring to the Santiago decision. That Court of Appeals indicated in dicta that rent stabilized leases are tantamount to "public assistance" for the narrow purpose in front of the Court, namely whether the lease ought to constitute an asset in a bankruptcy proceeding. That otherwise innocuous nomenclature has nothing whatever to do with Ms. Kaysen's accurate statement that rent stabilization is not a housing subsidy and that landlords "do not receive public money." Your sharp comment is misinformed. Chill out!
27
@Donna Gray
Got a link to that ruling?
I sure know a lot of rent stabilized tenants and lawyers who specialize in such things.
No one has mentioned it.
2
@OWH
OWH,
Thank you, I'd thought Donna Gray was spewing ignorance. But I couldn't remember the specific case. (Now that you mention it I do.) And of course a web search turned up nothing like what Ms Gray claimed.
There is a good case for subsidized housing, but this isn't it.
16
Next time consult with a NYTimes economist before publishing this column. The richer, fuller lives of these lucky people have costs. Many rent stabilized people are retired. They are in apartments that working New Yorkers need. Yes, someone commented below, young people from Iowa or Istanbul would come to New York and our industries would thrive. Older people move all the time wjen they retire. It's not such a hardship. No one deserves to live in Manhattan. We are not Aspen. There is transportation to the suburbs. Or they could move south like people in other parts of the country.
13
@anon
And many rent stabilized tenants work at places like libraries and Starbucks, neither of which pays well.
12
@anon actually, older people belong in cities. my parents live in the suburbs. there is not public transportation as such, and they need to drive. soon, they will reach the age where they shouldn't drive. seeing what they're going through, i see how important it is for the elderly to have ties and a home, in a city.
11
@anon
So you're saying all elderly people currently living in rent stabilized apartments should pick up and leave and move to Florida so that someone from Nebraska can have the apartment. Sure makes perfect sense.
3
Again more rent stabilization nonsense. The assessed values of property take into account these artificially low rents and depress taxes- i.e it is a publicly funded subsidy. The rest of us have to pay higher taxes to make up the revenue. And it's virtually impossible to lose a rent stabilized apartment no matter how much time you spend in second or third homes.
16
NYC is losing billions in property taxes and income tax by keeping the wartime rent laws on the books. It's a scam to buy voters, nothing more.
1
the law is faulty but due to the number of voters[who outnumber the landlords] that like the perk of controlled rents
it remains in place
the equitable law would be to provide income requirements to all stabilized apartments not only the ones that exceed $2700/ month
14
Exactly. These people are depriving really needy people of housing. I bet he lives in a rent stabilized apartment and is rationalizing it.
9
@larry This is not at all the way voting on the matter of stabilization has gone in Albany. Legislation over the past couple of decades has favored the landlords. Replacing an ancient boiler that was about to fail anyway now counts as a major capital improvement, and the landlord's simply meeting her obligation to provide heat and hot water is considered an upgrade that increases stabilized rents. The renter's contribution is amortized over a couple of years, but the rents remain higher in perpetuity. Such loopholes were explicitly enacted to favor owners, who have complained effectively if dubiously that stabilization puts them in dire straits.
2
"simply because there are not enough affordable apartments to go around"
That's the flaw in the answer. Rent control limits the supply. Plenty of retirees in suburb have to retire to cheaper communities when their income decreases. I would add that number to wealthy people who own second homes.
17
It's a bit of a quirk, that wealthy New Yorkers are able to ensconce themselves in rentals that are far, far below market in many instances. But that doesn't mean they're doing anything illegal or in breach of any lease. I'd do it too if I could, and I'll bet the letter writer would too.
15
@OWH Exactly. Rent control is just another lucky break for a few, but we all have lucky breaks, or not, in our lives. I don't see how lucking out with rent control is fundamentally different from my situation: a decent sized inheritance + joining a tech startup and getting a nice stock option package when it went public = had the funds to invest in San Francisco real estate before it went from bonkers to totally freaking bonkers.
So I'm a smart investor who now has rent control to the tune of zero rent in the condo I own outright now, which I guess is loads better than being some parasite lounging around in a rent controlled apartment all those years. Yet both are a product of dumb luck + being able to spot a good thing early enough to make use of it. I honestly don't see a huge distinction here.
10
@nerdrage
We could have laws which distribute public money by lottery, or which inflict homelessness by lottery... it might be fair (on account of being random and universal) but also utterly wasteful and cruel.
Perhaps the quintessential role of civil society is to mitigate the role of dumb luck in the lives of citizens, not to exploit it or turn a blind eye to it. Insurance of all forms, and all forms of public assistance, are supposed to help in that regard, since any one of us may fall on hard times, experience poor health, natural disaster, live with less native intelligence or physical abilities, suffer less capable parents or inadequate education, etc etc.
Laws which reward dumb luck either by design or as an unintended consequence are lamentable. Even the winners in such schemes must realize that it's not a wise or efficient way to organize society.
3
No. Those rent stabilized tenants who bought apartments years ago were the winners since prices have gone up so high. The folks who stayed in their rent stabilizaed apartments because of their cheap deals are the losers since they have nothing to sell and nothing to show staying put in small walk-up apartments for decades.
1
Thank you Benjamin Dulchin and Ronda Kaysen!
I lived in a rent stabilized apartment for 25 years, when the neighborhood in I which Iived wasn't particularly trendy and where a secretary, waitperson or a teacher could live without doubling or tripling up and still see a high percentage of their income go toward rent.
Sure...my apartment became more and more of a bargain as the years went by and rents increased dramatically. And yes, I figure that living where I did added $10,000 a year to my salary. But...the apartment allowed me to take a job I believed in at a lower salary than what it would have taken to live comfortably and still allowed me to live a comfortable, middle class life. I took vacations. I saved so that when I finally decided to buy, I could easily afford a downpayment.
I consider myself lucky that the apartment I moved into in 1976 allowed me to live the life I did - I just wish everyone was able to enjoy the rich, full life I did, without financial concerns and a triple digit income.
67
@NK There aren't enough resources to go around with the eternally burgeoning population (especially for in-demand cities like NYC and SF) for everyone to have your lucky lifestyle. You're luckier than some but not as lucky as others, who were born with a silver spoon and a trust fund. No reason to feel guilty or make excuses.
9
Forcing a landlord to subsidize a tenant’s lifestyle so that the tenant can own a vacation home is outrageous. Owning a building is a business with market rate expenses. Why isn’t my auto mechanic or my tailor or my supermarket forced to subsidize my lifestyle? Keeping rents artificially low does not increase the availability of apartments- it keeps the supply low. Rent stabilization is a subsidy that the government forces building owners to provide out of their own pockets that bo other businesses are confronted with. I would love to live on Fifth Avenue too, but I can’t afford it so I do not. No one should be forced to subsidize my lifestyle to enable me to live where I can not afford
36
@Justin, I generally agree with you, but it is important for everyone to understand that it is the remainder of the housing market that subsidizes rent-regulated tenants, not building owners. Investors will not put money into NY real estate unless they can get an appropriate return. If returns decline, they will invest elsewhere. Owners get a relatively constant return, it is market-rate renters and condo/co-op owners whose costs increase.
8
@Justin you make it sound like landlords are suffering and living in poverty because of RS. most buildings with high rents are now owned by corporations and /or huge management companies. the day of the small landlord who might be affected slightly by RS are long over.
4
This argument does not take into account that most of these rent-stabilized tenants would not be able to afford to stay in the city without their apartments. yes, they may be able to buy a, let's say, $200,000 shack in the Catskills, but that doesn't even get you a studio apartment in a bad neighborhood in far-out Brooklyn. Let's get real.
68
@Bonnie Ending rent stabilization would force out the currently lucky population that benefits from it, to the advantage of a different population that is lucky enough to afford to move in instead, because they have high paying jobs due to their family connections, a trust fund, etc.
Competition for space in NYC would not abate, and the rents would float up to their natural, insanely-high state. Some landlords would certainly benefit, but the situation where just the wealthy and the lucky can afford to live in NYC would continue unchanged.
10
I have a stabilized unit but even with that I can't afford to stay in NYC when I retire. So, eventually I can get a small second home upstate. Nobody in my building is rich, and many of us work in education.
48
@Tai L That is what has happened to me. I am in my 70s and planning to move out of NYC.
3
My relative who lives in a former Mitchell Lama building was forced to pay (along with the other rent stabilized tenants) a capital assessment for new windows for the building - a capital improvement that enhances the value of the owner's building but the tenants paid for the cost. Also just before the building was sold, the unbroken pebbled sidewalk was torn up and replaced with a plain white cement sidewalk that's already started to crumble. The tenants are paying for this too.
10
@AinBmore
Mitchell Lama is a completely different situation. There were tax breaks for the developer. This is totally different.
11
I'm not sure about "the sponsors of those rental apartments presumably pay[ing] assessments". These were people who lived in the building before it transitioned. The sponsors paid for them, but these tenants didn't buy in. The current owners are now responsible for the assessments and capital improvements, now that the sponsors have passed the responsibility onto the condo board. These tenants are merely paying rent to the board. They aren't being assessed.
But of course it is a subsidy from the government on the backs on landlords. Landlords don't get a market rate and permissible increases don't match the growing expenses of ownership. So landlords are forced to subsidize through private enterprise the interests of government in providing housing at what it believes is an affordable rate.
8
@Barbara - If the tenants in place when the building went co-op did not buy, then their apartments are still owned by the sponsor. The sponsor did not pass responsibility for those renters to the board, and they continue to pay rent to the sponsor and not to the board. The sponsor is the current owner of those apartments in the same way you or your next door neighbor is an owner. And the sponsor gets assessed for his apartments in the same way the other owners do.
28
@PM Thanks. I was trying to envision a weird situation where there is property in a condo building that "nobody" owns. Who the heck is paying the property taxes then? Somebody owns everything, and that somebody is responsible for taxes and assessments.
1
I think a lot of this falls back to the landlord as a business owner. Housing is a necessity is it not? How much money should someone be allowed to make while providing housing, aka renting? As long as the landlords are still making money at these stabilized rates I have no issue with rent stabilization. If it goes too far and the landlord is losing money on their investment then we can have a discussion. Until then I have no stomach for allowing a small group of property owners to bilk more people out of more money. Development should earn money, but it doesn't need to be an industry that transfers the majority of middle class wealth up to the privileged class.
23
@James Swords But it begs the question: how much SHOULD anyone make on an investment? What limits should be put on any investment, like, for example, savings account interest, or resale price of a home? In the end a market will determine it, or no new investment in housing will be made. Malthus was probably right, it seems. Perhaps a property capital-gains tax reform is needed: apply it to all gains, increase it, and apply the revenue to state-sponsored affordable rental housing?
1
@James Swords it is not for you to determine what an "appropriate" amount of money someone should make while providing housing. Do some landlords act with greed and insensitivity to their tenants? Absolutely. No one is entitled to live in the building or neighborhood they live in. One sees this sense of entitlement all over NYC with people paying below market rents. It forces some people to lie (hide their income or the fact that they sublet a room.)
@James Swords,
How much should a landlord be allowed to make?
1
This Times Sept. 23 article is a weak rationale for an unjustifiable practice. The article is no doubt written by a beneficiary of this form of government-mandated largess. Rent stabilization is in fact subsidy mandated by the government and paid for by landlords who are compelled to charge below market, often below cost, rents for "stabilized" apartments. If the body politic, represented by the government, believes that such rental subsidies are warranted, then the body politic should pay for them, as it does with the program known as Section 8. The obligation to pay welfare subsidies should not be arbitrarily imposed on certain landlords for the benefit of tenants, wealthy or not, who have drawn a lucky ticket. Let's just transfer the cost of this program to the taxpayers and see how happy they are to pay higher taxes or incur increasing government debt to provide "fuller, richer lives" for their well to do neighbors.
33
@Al Let's say everything you say above about the landlord burden is true. I'm not sure it is, but for the sake of argument ... I'll give you that. I'd venture that virtually no landlord who owned these buildings when rent regulation laws went into effect is still around. So you have a crop of new investors who bought these properties knowing they were rent regulated. Now we're supposed to upend the lives of God-knows-how-many New Yorkers because these landlords made business decisions they're now unhappy with?
53
Ok, the landlords were able to purchase those buildings at depressed prices because of the rent stabilized tenants. How about some consideration for the burden on all the rest of us paying more than our share of property taxes in order to compensate for the depressed property taxes on those stabilized units.
12
@GG
Property tax assessment has nothing to do with the number of rent stabilized units. The owner of those apartments, be it a private investor, sponsor or the person the sponsor sold to ( called "owner of unsold shares") is responsible for the EXACT SAME MAINTENANCE, TAXES, ASSESSMENTS ETC. as individual owners.
No one is paying more than their share.
1
Let's say all the rent-stabilized apartments were converted to market rate overnight. The sudden new supply of rentals might lower the overall rental rate in NYC a tad, until the supply was absorbed into the unending demand for housing.
Employers would be able to lure in more employees to the NYC area with slightly better housing costs. More kids from Iowa or Istanbul would realize their dream of living in NYC, maybe with an assist from Mom and Dad. Now Mom and Dad can be just somewhat well off rather than out and out rich to subsidize this dream. The imbalance would equalize as demand rose to the level of supply, and then everything would be the same as before, except all the rent stabilized apartments would be gone.
Some folks are getting a sweet deal with their rent-stabilized units, sure. Some folks get a sweet deal because they were born into a stable, functional family with loving parents, or were born white, or were born in America and not some hellish war zone of a failed state. Life ain't fair. If you're reading this, you are no doubt one of the lucky ones. Be grateful for your own luck and maybe you won't be jealous of the even more lucky ones.
59
@nerdrage In a city where 250,000 apartments sit vacant, I don't think "supply and demand" is sufficiently nuanced to cure the situation. There has been lots of research into housing, and it turns out it's complex! Who knew!
The fact is that increasing the housing supply by building (luxury) units has caused a slight decrease in rents for the wealthy and an increase in rents for everyone else. This has been documented in NYC and SF and some other places.
It's interesting that only economists and weather forecasters can be routinely wrong and still keep their jobs.
@nerdrage
This comment is outrageous and I probably should just let it go. But you bring up a good point - rent is an issue for nearly everyone and rent stabilization is biased against young people. Many 20-30yo are struggling to make ends meet in this city but are certainly not the ones with rent stabilized apartments. It is getting impossible for young people to move here, meanwhile half the rental stock is effectively out of the market. And you may say "so what" - well, young people moving here from Iowa and Istanbul is what makes this city special (also, these are terrible examples of places with privileged kids - try Brookline or Great Neck or anywhere else). We pay higher rents to subsidize the prior generations. Not all young people in this city have trust funds btw. Also, what's your point. Lets keep bad and unfair policies because "life ain't fair" in other respects.
3
@nerdrage “Life is unfair, so don’t worry about it” is a very weird position when talking about policies that give the equivalent of thousands of dollars each month to some households… I think whether it is fair or not is quite important here.
And your argument about increasing supply being pointless, because demand would catch up and bring back old prices over time does not hold water either and is biting its own tail: if that new demand from Iowa and Istanbul was allowed by lower prices, then when prices rise again to the initial level that demand would disappear. You are basically describing a price/demand curve, so you should be able to understand that with higher supply, you end up with a lower balancing price, even if you indeed have increasing demand in the process. Otherwise what’s the point of building housing anyway?
1
By some reckonings, NYC has the highest construction costs in the world. In 2017, residential buildings cost $302 per sq. ft. Then there is the matter of taxes. Whether you rent or own, the taxes on your unit are about three times that for a house of similar valuation. A landlord probably can no longer provide "affordable housing" unless it is subsidized by the government or other tenants in the building. Obviously, the last is the least equitable.
In 2012, the Supreme Court declined to hear a challenge to New York's rent regulations as being, in effect, a seizure of property. That was then, and with changes in the court, we may yet live to see the day when rent control and regulation come to an end.
12
NYC doesn’t have the highest construction costs in the world but it does have some of the highest real estate taxes in the country. Where I currently live (Nantucket) construction costs are much higher than that at around $650 sq/ft. The average home price is currently $2.1 million. Last year (2017) it was $1.7 million. We do have affordable housing options as well, if you can call $500-700,000 for a 2-3 bedroom house affordable. Here they’re a bargain. Of course our wages are above the national norm but our property taxes are much lower. If I had stayed in NYC I never would’ve been able to afford to buy a home and even to save up for retirement. Even the thought of paying $2500-$3500 for a dinky 650 sq/ft apartment in Queens, where I was born and raised, or Brooklyn, doesn’t appeal to me in the least. Kudos to those able to do so.
1
Rent stabilization IS a subsidy-- one that is being provided by the owner of the unit to the tenant. Just because the government doesn't pay anyone doesn't mean that there isn't a benefit being gained by a party. In fact, a good argument can be made that the government has mandated a subsidy but compelled a private party to bear 100% of the cost of that subsidy. How's that for fair?
30
A good argument can also be made that a private party made a decision to provide said subsidy when they agreed to invest in a rent stabilized property. It’s not about fairness. It’s about free will and consequences.
31
@John
Oh Geez. No. Everyone went in with open eyes. I had one for a decade in the early 80s LES. I went up to the landlord's office and filled out and application and was approved and signed a lease. We were both parties entering into a contract. There was no "subsidization". No one's arms were twisted. It was mutually beneficial and everyone was happy. Seriously. They were GLAD to rent to me - it was sitting VACANT and in a shambles. And then the whole real estate market in NYC went totally crazy and SOMEHOW everyone blames rent stabilized tenants as if it was their fault. We did nothing wrong. We weren't scamming. We were paying the rent. And we all thought at the time how much money that seemed like - friends outside the city would GASP and thought we were NUTS. And getting mugged at knifepoint in the vestibule. Keep in mind the RE market could have totally gone the other way we might have been paying higher rents than market. NYC was teetering on the precipice. WE were a big part of why it survived.
You'll all be happy, happy, happy to know I moved out and the building went co-op and now it's worth 1.2 mil last I looked several years back. I didn't get a dime of that. And now it's forever lost to another guy coming to the city young trying to make it. Now the city is less diverse, less enriched. Folks wanted into the city because it was interesting. Now it is a huge dessert. Enjoy.
88
If it went the other way you could have walked away with nothing lost.
The mindset of renters in New York is ridiculous, thinking they are so righteous.
The system was designed to allow those with stabilized apartments to live a richer and fuller life? I can attest to that based on the three people I know with such an arrangement.
One is a resident of Stuy Town with yes the proverbial house in not the Berkshires but Shelter Island. And a car (with subsidized parking) to get there. The second a charming place in the West Village, the dirt cheep rent on which plus some family money allows her to spend time snapping photos that no one buys. The third is a retiree that can buy expensive opera and broadway tickets - an alternative to a life in Florida watching cheep regional theater.
Meanwhile the rest of us are expected to make up for the lost property taxes that those residences would otherwise generate.
27
@GG. Even with their "arrangements", I would take the three people you mention, as neighbors and follow New Yorkers, over those who would likely take their place if those apartments became market rate rentals, eventually becoming condos/coops.
Because one place would sit empty as a foreign-owned investment. The next, an expensive dorm room of an out-of-towner's child. And the last, a seldom visited pied-a-terre of another wealthy out-of-towner.
I know first hand since my rental building turn coop can sometimes feel like a ghost town. With an occasional siting of a stranger, who turns out to be a long time owner(?). Or a loud college rave, which I have grown to like since it is a sign of life.
As taxes go, not a single one of those new owners claim NYC as their main residence. Which is a lose of local income taxes, and possibly state and fed taxes too. And we all would lose the creativity a photographer, whether they sell their work or not, and the arts patronage of a retiree.
I'll definitely take people with "arrangements", over these New New Yorkers.
31
GG - I have lived in many rent-stabilized apartments and the tenants never lived a charmed life as you describe, IMO this is a myth and urban legend and perhaps a few bad apples spoiled it for everyone else. RS apartments dwindled over the years - many of them were real dumps and fixer-uppers where there was no heat in the winter, no hot & cold running water, peeling ceilings, lack of repairs by apathetic landlords. In subsidized housing where tenants were living in market rate apartments,. RS tenants were not treated the same as tenants paying market rate of thousands of dollars. RS tenants had to go through what's known as 'the poor door.'
Rising new construction of mammoth buildings and buyouts to rent-stabilized tenants are eliminating New York City of affordable housing. Even those making the six figures often need a roommate or two pay to $3,500 or $4,500 month to rent a one-bedroom apartment.
We need to keep RS and stop the mindset that only a privileged few have summer houses and homes in Florida. Don't believe me? Try renting a rent-stabilized apartment now - it's like finding a needle in a haystack. Get ready to pay sky-high rent and the landlords love it while their rent-stabilized tenants fight to stay in their homes or are forced to move out of New York City. These tenants have families to support and often work two jobs just to pay the rent. Don't judge until you've been forced to leave your home because rent stabilization is dwindling by the day.
15
@GG I think you mean cheap, but by all means keep judging
8
How about we assume that the difference between the rent paid and 30% or so of the tenants income is a gift from the landlord and subject to city and state tax.
9
There are about a million rent stabilized units in the City, and about 20,000 (2%) are inhabited by now-wealthy people.
Since these are concentrated in a few high profile areas (like the upper west side) and since opponents of rent stabilization like to cite their presence in this "system" the alleged problem is way overstated.
Perhaps we'd be better served if affordable housing goals (pay no more than 30 - 35% of income towards housing) were treated as aa floor as well as a ceiling in all programs designed to promote affordability. That way as a family's income rises it will be expected to pay more, or move and free up the apartment for another in true need of an affordable unit.
But concentrating on the 2% as a reason to de-control everything is not justified.
72
@Paul '52
Yes, "concentrating on the 2% as a reason to de-control everything is not justified."
2
@Paul '52 It probably needs a cap too: if someone is paying $3,000 a month for an apartment worth $5,000 a month (probably not an unusual scenario considering the areas we are talking about), it doesn’t matter whether that is 10% or 50% of their income: it is a significant subsidy, and is very unfair to all the people paying the full $5,000, to the people paying $3,000 for a place of much poorer quality, and of course to all the people who are struggling to pay for cheaper places with no help from this distorted scheme.
1
@Bob Robert
You are making a strong and sound argument for a return to the way the rent stabilization system worked when it originally passed. Namely, for it to apply to all housing equally. People in stabilized units are incentivized to stay because of the modification to the law in the 90s which allowed for vacancy decontrol. If all rental units were stabilized, anyone in a stabilized unit would be OK to leave to make space for another tenant, because they would know the next tenant in their unit will still have rent stabilization protections, and that the unit they are moving into would also have them.
1