Today, there are 43,317 apartments where tenants (or their heirs) pay rents first frozen in 1947. There are another 1,043,677 units covered by rent stabilization. All told, about 70% of the city's rental apartments are either rent controlled or rent stabilized.
Every new entrant into the New York rental market is competing for just 30% of the available housing stock. This explains a lot about New York's rental culture. Also why so much rental housing is being converted into condos or co-ops.
Actually the cool thing is, if you go inside them it's still 1947. They have the cool cathedral radios like in the Queen "Radio Gaga" video and the TV's, which they don't all have, are black-and-white and wood-grained and mostly feature white people. It's pretty awesome and honestly it's worth it for the city.
Megan, You have part of it wrong. I live in your old 'hood at 101st and WEA and I rent. There is not a lot of conversion going on at all. Maybe a building here or there. The big conversions happened back in the '80s when for several years some 30,000-40,000 apartments per year converted to co-ops. Of course none of those ended up in the rental market either.
Still, this isn't new news. And a law change from the early '90s means apartments are slowly coming out of rent stabilization. Of course "slowly" really means that. Think a generation or two. Of course there are those who scream that that change should be reversed.
I don't think you understand the concept of rent control & rent stabilization in NYC. Just because an apartment is rent controlled or stabilized does not mean that the apartment is not vacant. So if 70% of apartments in the city are either rent controlled or stabilized, it does not follow that only 30% of the apartments in the city are vacant, which is clearly what you're saying. If a tenant vacates a rent controlled apartment, the apartment will still be rent controlled (as long as the new rent is under $2000, I believe). So that apartment, while still being one of the 70% rent controlled or stabilized apartments, is on the market. Anyone can rent it. True, it's much tougher to find a rent controlled apartment (given the way landlords do everything in their power to raise rents on vacant units so that they can be deregulated sooner rather than later). But your math simply does not reflect the reality.
Apparently you are only eligable for rent control if the rent controlled unit is your primary residence. So, some real estate company hired private investigators to find out where people were living. They had people in rent controlled units who had condos in Florida and others with summer homes on Long Island and the Jersy shore.
I would have thought that owning a home anywhere would have automatically made one ineligable for rent control - I would have been wrong.
The most shocking thing was the quotes from the New York Times article. They asked the people with the homes in Florida and Long Island about it and they said "We could have never afforded a summer home if we had to pay market rents." WTF?
I would think a law should be passed that anyone owning a home anywhere in the us should not be eligable for rent contol.
I mean look at Charlie Rangel - he has a 400k condo at a resort in the Domincan Republic and lives in a rent controlled apartment. How is that right?
New Yorker - Actually she has it exactly right. Rent stabilized apartments are effectively not in the market of available apartments (not a matter of vacancy or not). The people who live in them will, for the most part, be there for decades. Now not all are significantly below market in rents (especially in really bad areas where rents are low) but those that are will never be vacant, and will never be on the market. The rate of apartments that are taken out of rent stabilization is a fraction of 1% per year.
So those that participate in the "open" market for rental apartments are in a market whose size is only 30% of the actual number of apartments in Manhattan. Hence a vacancy rate in Manhattan that drops from, say, 3% to .8% (as I think the recent market has) is really dropping from 10% to 2%, a much more significant drop in available market rate apartments and leads to a much greater swing up in rents.
New York government is one long punchline...nothing more taxes and union favoritism can't fix!
It would be helpful to get a second opinion on the WSJ's reported numbers. I reflexively mistrust unsourced data from their opinion page. It would also be useful to know if we're talking about Manhattan only or all five boroughs.
((*) Yes, I know they were rent stabilized places. Same principle applies.)
It would be interesting to have a brief (Protestant?) history of the rental markets in NYC that includes full reference to the period before attempts were made to regulate the rental market.
Abuses of/in the rental market are pretty horrific...
We've had this conversation before. I'm rent stabilized in NYC. I pay the maximum legally allowed rent. The apartment I live in was made rent stabilized in 1988. Before that it was a crack-den which got bought out by a developer. The developer kicked out all the crack-heads and did a top to bottom renovation. To encourage the developer to do this New York State offered him a 25 year tax abatement. As long as the abatement was in place he had to have the apartments stabilized. The abatement runs out in 2013 at which time I will have to pay market rent or move out.
How did I get this fabulous deal? I went looking for apartments in 1995 and this one was available and I liked it and I signed a lease. I didn't know anyone. I didn't sleep with the real estate agent. I didn't kill-off the former tenants. It was on the market.
Lots of rent stabilized apartments are on the market.
So what, exactly, is unfair about my situation? How I got my apartment? I saw an ad, I paid a fee to a real estate agent, I pay my rent. Rent which has gone from $1,395 in 1995 to $2,682 today. Almost double. My landlord doesn't have to pay taxes on the property and he therefore has to pass the savings on to me. That was the deal. If he doesn't like the deal now that's too bad, he knew the deal when he made it, just as I know the deal now. He clearly thought it was worth it at the time.
Lumping Rent Control with Rent Stabilization is like compairinging apples and Snoopy dolls. They are two differernt things. Lumping them together just shows your ignorance on the matter.
And additionally, in my stabilized building with 10 apartments you should know that 7 of them have repeatedly flipped. There are 3 tenants total who have lived there for more than 10 year (one of whom is me). All (except me) are families who likely would have stayed regardless. Sorry Meg, on this one I think you're talking out of your ass.
Yeah, the 'competing for 30% of the available housing stock' line is just wrong. I'm not going to say that rent control and stabilization are all a good thing, but I've moved into and out of three rental apartments in NYC in my life (not counting my childhood apartment, that my mother still lives in), and they were all stabilized.
Also, in the outer boroughs (Bronx, unfashionable bits of Brooklyn and Queens, and I don't really know much about S.I.), there are plenty of rent stabilized apartments where the stabilized rent is greater than the market-rate rent the apartment's actually renting for. I don't know percentages, but it's not crazy uncommon.
Rent stabilized apartments are effectively not in the market of available apartments (not a matter of vacancy or not). The people who live in them will, for the most part, be there for decades.
Got a cite for that? I moved to Manhattan a few years ago and found a rent-stabilized apartment right away. Not everyone's experience, but not that unusual either. I certainly don't plan to be there for decades. People should understand that rent-stablized != rent-controlled. This op-ed deliberately obscures the distinction, and therefore is pretty useless.
Would everyone agree that if you own a home you should not be eligable for a rent controlled or stablized apartment.
I don't know the figures but some (and it seems like a lot) of the stabilized buildings are newer builds that have a 421-a or J-51 tax exemption. They will only be stablized for the length of the exemption and may have rents above $2000. Many of these units trade at market rates even though technically rent stabilized as the maximum rent is higher than current market rate
The exemption continues even if your rent is over $2K as long as your income is below $175,000 gross.
As a long time renter in NYC (1985 - ) I can attest to the dramtic increase in conversions. Maybe not on 101 and WEA (darn little left to rent over there by the way) but on the upper east side, aka Harlem and Spanish Harlem there is at least one reno/conversion/new construction occuring on nearly every other block from 96th street to 120th street.
Pickabone - The numbers are accurate. This is both researchable and these numbers have been out there for a long long time.
Kate (10:27am) - nothing wrong with how you got it. But what you are paying is by definition not a market rate as it is not set by markets. That said yours may be a fair rate but that has nothing to do with rent stabilization. I live in a 106 year old building where some residents pay under $2000 (some significantly) for pre-war classic-6's (large 2 BR apartments, about 1500 sq ft). Market rate even in a low amenity building is about 3500. And there are thousands of apts like this in my neighborhood. Some of those people own other R/E. They are even allowed to own real estate in NYC!
Those apartments are not in the market. This skews whole supply and demand structure. When availability runs out you can raise rents on only 30% of the inventory to ease demand instead of 100%, therefore the increase must be substantially greater to have the same effect.
Mind you I live in a rent stabilized apartment.
Add me to the chorus of folk living in rent stabilized apartments that think the "not on the market" thing is just wrong.
I, too, got mine through no special machinations. Moved in 5 years ago, not planning to stay for decades. Mine's in a fine pre-war building in a good area (East Mid-town, a block from the river.)
The rent is no great deal. It's maybe -- maybe -- $100 cheaper than market, if that.
And the increases are fun too. The owner has every incentive to raise the maximum allowable to get closer to the magic $2000 that lets him out of the stabilization.
So while my friends in non-rent controlled apartments have, at times, successfully negotiated for lesser or no increase in rents, my landlord just laughs if you suggest that. He'd rather you leave, becase he gets an increase between tennants as well. So long as he gets closer to leaving stablization it might even be worth it to him to have it empty for a month or two rather than not use the full increase allowed.
Granted, I've also had friends who's non-stabilized rent went up more than they wanted but the stabilization thing is very different from the control thing. It's not a guarenteed deal, and it's certainly not an off-the-market-because-the-rent's-too-good-to-walk-away-from deal.
Kate - another correction of your facts. De-stabilization can occur only if you are over $2000 in rent and have a $175k income FOR TWO CONSECUTIVE YEARS. Someone who can control the timing of their income can stay forever. And if you are paying under $2000 it doesn't matter if you make millions, like Nora Ephron at the Apthorp.
The entire concept of rent control and rent stabilization is horseshit of the highest order.
How much of NYC land is unbuilt and unbuildable because of it? How much housing stock has fallen to crap because of it?
How much money and effort is spent enforcing it and trying to get around it?
It's mind-blowing that any intelligent person could could even conceive that rent control/rent stabilization has a particle of sense to it.
blighter (11:33) - where rent stabilized prices are near market then there you are right, it keeps the apartment "on the market". And yes, if an apartment is near market it means it is not among those 1,000,000 apartments. But the point is that ALL those apartments live by different rules than market rules. Sometimes those rules will coincide with market rules (an apartmet can't rent for more than market unless there is an expectation that the market will grow faster than rent stabilized rents), but the rest of the time it won't.
So let's say not all the 1 million apartments are opted out of rent stabilization. Don't you think it makes a difference if 200,000 are? How about 400,000?
When I moved to my building my neighborhood was not really upscale, but it would already have been almost impossible to find stabilized 1BR or 2BR apartments. More to the point, most of the 60 units in my building were not in the market.
Kate - $2,682 per month for an apartment (and "rent stabilized" to boot!!)? I realize it's New York and all, but that's just ridiculous. I pay $675 per month for a 12y/o three bedroom, 1 -1/2 bath ranch style house with a deck, full basement, and attached two car garage sitting on 2 acres of land. I suppose that's the price you have to pay for good restaurants, clubs, culture, and the lovely aroma of your neighbor's borscht. LOL.
Kate may accept that when tax breaks extended to her landlord expire so do hers, that is not the norm. Take a look at Starret City/Spring Creek. This complex has 5,881 apartment and was created under Mitchell Llama, which sounds very similar to Kate's building. Tax breaks for Starret have expired and as per original agreement now go to open market. Wait. Tenant groups refuse to accept this. Government steps in and blocks sale. Apparently tenant advocacy groups do not like that contract has expired and with the backing of government are changing the rules of the game and refusing to honor original contract.
gb506 - I also don't get the whole "you have to be truly crazy to live there" arguments. I understand the appeal of $250k for a 5br house with a pool. But I also know people who don't want it. They will give a limb to be able to stay on Manhattan Island even if it means it has to be in a place the size of your clothes closet. To each his own.
When I can't afford to live here as I would like I will move a bit farther out. I still like NYC and understand its appeal. And though I think the amounts people are willing to pay for that today is a bit nuts, they are free to be nuts.
My best rent deal in New York was a summer sublet on St. Marks place for $750.00 in the summer of 2000. The woman I rented it from spent her summers teaching art in Nebraska and she did this every summer. It was rent controlled and her rent was $375 so I paid a 100% mark up. It was still a great deal, though. Most of her neighbors were paying well over $2,000! And she made this money off her apartment without any of the expenses of actually owning and maintaining the property.
For some reason, her landlord didn't like her and kept trying to get her evicted. Darned if I can figure out why!
AvnerUWS, I completely see your point that the market is distorted because these places, even though their prices may be competitive with the market, are not playing by market rules. That was sort of my point about the friends who have had more favorable experiences with non-stabilized apartments.
I thought Megan's phrasing sounded a bit like these apartements are totally locked up (in the way the controlled apartements are) so the available housing stock is constrained to 30% of the total. But I agree, stabilization, control, the whole kit-and-kaboodle distorts the market in non-helpful ways.
gb506 - So you pay much less for space that I wouldn't need and would only fill with useless crap if I had and the "benefit" of having to drive everywhere? If there's a better night than a walk to the movies on a warm spring night, then dinner in a little French bistro, splitting a bottle of wine and not having to worry about drunk driving, cops, traffic, parking, etc., etc. I can't imagine it. But then, obv. I have different things that I'm maximizing for in my happiness quotient than you do.
Heck, the premium I pay for living in manhattan would be worth it just to avoid driving. When I factor in the cultural benefits including whatever the delicious stuff that my neighbors cook is (don't think it's borscht though), I feel like I'm positively getting a deal.
Of course, once the finance sector is done imploding, I might not feel the same way about the 70's style crime and poverty wave, but I'll cross that bridge when we get to it.
Kate et al.: while it is true that there are rent stabilized apartments available, the vast majority of rental turnover is in non-stabilized apartments, something you can easily confirm for yourself by looking over the MLS or the real-estate classified ads. You yourself are an example of why: unless you're going to buy, who moves out on such a great deal? Stabilized apartments turn over more slowly than non-stabilized, and the ones that do turnover are much more likely to be the ones that are stabilized at close to market rents. The figure I gave might be off by a few percent, but not enough to make a significant difference in the conclusion.
But saying that that rent-stabilized apartments can be regarded as simply off the market, as you did in the post, is just flatout wrong. They may turn over more slowly, but they do turn over.
Rent control leads to many unfortunate consequences. They can't even be called "unintended consequences," since the pattern has been well-established for decades. Any basic economics textbook will explain why. But for those who are interested, here's a summary:
When government enforces a ceiling on the price of something, the supply of the thing goes down. In the case of apartments, landlords' expenses for maintaining their properties have increased since 1947 (or since 2007, for that matter). Denying the landlords fair market value for their apartments while imposing fair market expenses on them naturally leads to a situation where it's more expensive for them to leave a rental property on the market than to convert it to a condo or close it down altogether. This isn't "greed," any more than it's greedy when you decide you'd rather do without a new shirt, or a car, or something else that costs more than you can afford.
Also, rent control creates an incentive for many renters to stay put who would otherwise move to other properties or buy housing. In this way it artifically depresses the supply of apartments further.
So housing that would have been available at fair market rates becomes unavailable. The result? Prices for available housing are boosted because of the artifically inflated demand; and many people who could otherwise live in those closed-off apartments find themselves living farther and farther from work, a circumstance that enforces its own extra cost intime, money, and risk. Or (depending on their circumstance) they find themselves homeless.
There's no such thing as a free lunch. Or a rent-controlled aprartment that someone, somewhere, isn't paying a lot extra for.
blighter - fair enough. But if I were you I'd at least be drafting a plan for "crossing that bridge" because if things really get bad - I mean worse than Great Depression bad - the things you need for sustenance may not be coming over the bridge in your direction, and if they are, they may be very scarce and expensive. Look around you today at your fellow New Yorkers and contemplate what such a scenario would mean. What would the human reaction be?
The city is a very precarious and dangerous place to be when things fall apart. Don't mean to be an apocalyptic loon or anything, but recent events in the financial sector coupled with the Cat 5 Hurricane that is the coming Social Security/Medicaid/Medicare implosion, the last place I'd want to be is smack dab in the middle of a massive metropolitan area.
Just sayin', friend!
gb506 - "worse than the great depression"?? Are we about to be hit by a planet killing asteroid? The Great Depression was about as bad as a society gets that still has a government, to rule-of-law so to speak. The economy shrank about as fast as it could (these things happen slowly) to the point where it was at best feeding and houseing itself at the most basic levels. By that time all credit had been used and then dried up. At that point it was at "bottom" and when you hit bottom you can start to plan again, to lend again, and not have to worry it will drop. That happened about the time of the start of WWII. But if unemployment and capacity under-utilization were at 25% that meant that at the bottom the economy still managed to keep 75% of both employed. God willing we don't get even close to that, but I doubt it "will be worse".
It's easy to get outraged about rent stabilization, but what exactly is the WSJ/Megan proposing? I believe that the the laws of economics dictate that we should phase out rent stabilization for future construction/vacancies as soon as practicable. But, the issue of what to do about people who already live in stabilized apartments is less clear.
I'm not a fan of rent stabilization, but I recognize that if we just wiped the slate clean effective tomorrow, there would be chaos.
The laws enacted in the '90s are doing a good (arguably slower than ideal) job of phasing out the system. New apartment buildings aren't subject to rent stabilization. And over time, inflation will push all rents over $2k, so all vacancies will be de-stabilized.
I hate rent control. It stopped me from moving into the city although my girl friend had a huge 1 bedroom in the Village for $750 a month. (We broke up anyway.)
However, you need to remember that no new apartments need to be rent controlled.
The reason that so many new rent controlled apartments are(were as recently as last week) being built is because the builders think they will make more money by taking the zoning breaks that come with agreeing with rent control.
I still think rent control stinks but don't feel sorry for the landlords who choose to use the system because rent control makes them more money than not using rent control
Avner - in the 1930's a significant portion of the American populace was still agrarian and could feed themselves. In 1930 fully 21% of the American population lived on farms. Today less than 1% of Americans list their occupation as farmer, and that number includes hired help in addition to the farm owners. If we see an economic situation similar in severity to the Great Depression, it will be a much more disruptive situation. Catastrophic, probably.
Long story:
In 1985 my Ma-in-Law died in a rent-controlled apt in Queens.
No charity would take her stuffed furniture, only her hard stuff.
Landlord wouldn't let me put out the stuffed furniture on the street 'til following month 'cause he would've been fined by Sanitation Dept.
Being an elite lawyer & no longer street smart, I realized that the estate could be technically liable for an extra month's rental.
Called landlord & asked for a release. Landlord said "send me anything you want, I'll sign".
Having grown up street-smart & un-elite, I immediately got suspicious & called a still street-smart & un-elite, Queens lawyer classmate & asked "what am I missing here?"
He said: You (me, that is) & your wife got separated & your wife's been living with your Ma-In-Law, right? QED, she inherits the apt. The landlord knows you're a fraud & that he will eventually prevail but, hey you get out tomorrow & he immediately, not eventually, gets a big jump in rent from the apt, whereas if you stay & play, it will cost him time & attorney's fees to fight you & so he'll give you, say, $1,000 (the apt was renting for $150) to get out ASAP, Got it?
I did not do this but it's a disgrace to think I could've!
No one knows what market rents would be in Manhattan if rent control and rent stabilization were abolished.
The fact of Rent Control/Stabilization (RC/S) distorts the entire economy. People are unwilling to move to units which better meet their needs because the smaller pool of units on the market keeps rents of available units artificially high.
I lived in a rent stabilized apartment in Spanish Harlem (108th Street between Broadway and Amsterdam) in the mid-1980s. I had four rooms in the back of the building, so my views were across two alleys. 325 square feet rented for $1000/month over 20 years ago.
My neighbor across the hall had six rooms which fronted the street, so had much nicer space. However, her unit was rent controlled and she had been there since 1949. She paid $47.50/month. If her son, who was an engineer in his 50s lived there for the 6 months prior to her deathm he could take over the unit at her rent level. No means test.
My rent went up three times during the course of my original rental agreement, and I had two options: Pay or leave. How could they raise the rent before the lease ran out? Rent stabilization allows a landlord to raise rents if they make "major capital improvements" to the building or the unit, and they submit mountains of forms to the Benevolent Government and wait about 18 months to two years for Daddy to give permission.
My landlord had put on a new roof, new elevator, new windows, and a few other things before I moved in, and several permissions came through while I was there. So, even though I had a signed contract, it didn't mean anything as far as knowing what my rent was going to be. All I could plan for was an expectation of rent raises which forced the renters of stabilized units to cover the entire cost of improvements because the rents of controlled units couldn't be raised.
Thank you, Benevolent Government.
My landlord paid my upstairs neighbors $20,000 to move out so he could raise the rent. How is that good?
In the South Bronx, landlords were so totally screwed they walked away from their buildings. Abandoned them. In some cases burned them down. How is that good?
The city government's response to abandoned and empty buildings was to put cartoons of curtains, lamps, and vases of flowers in the windows so the buildings would look "occupied." Right. Ride the subway (where it was above ground) and look at all the "occupied" buildings.
Thank you, Benevolent Government.
I am astonished by the comments which amount to "Rent control isn't really all that bad because it wasn't so bad for me." It is and was bad for you. It keeps units off the market- doesn't matter what the exact percentage is. That drives up prices a lot at the margin. It makes it a lot tougher to be a landlord. It discourages building new apartment buildings. It discourages proper maintainance. All that is bad for everyone who lives there.
What business does the government have setting rental prices, anyway?
Why not just remove all rent control and stabilization measures, and then give prospective renters some $$$ assistance so that they can make the rent? It's far less disruptive and far more honest than participating in the current charade, which has loads of hidden costs.
blighter: "So you pay much less for space that I wouldn't need and would only fill with useless crap if I had and the "benefit" of having to drive everywhere?"
Yeah! Tell it! Also, freedom is slavery!
TTB - thanks for the personal story showing the downside to rent stabilization. It's easy to forget that people are actually suffering from these laws.
That said, I'd still be curious for someone to give a clear proposal about what to do about all the tenants (who apparently make up 70% of the NYC rental market) who are currently in rent stabilized apartments. And I'm not sure if booting privileged tenants is even fair. Sure, the rent stabilization laws were misguided from the beginning, but that's the city's fault, not the tenants'. These tenants took advantage of dumb rules, but that doesn't make it fair to change the rules now. If someone moved into a rent stabilized apartment 30 years ago because they realized it was a great long-term "investment," is it fair to suddenly change the rules now and drastically raise the rent? Or is it more fair to just pat them on the back, and maybe just up enforcement of the successorship rules.
gb506 - If things get bad enough that they're not delivering food to my supermarket, I wouldn't count on them delivering to yours either. But then, I suppose, you'll have the space to stock up on beans, whisky and ammo and ride this thing out.
In the scenario you describe, I think I would reconsider my decision and move to Brooklyn where I would join the Warriors.
DensityDuck -- If you feel that my preference for small space and no car is "freedom is slavery" reasoning, you must not have a very good grasp of either freedom or slavery. Here's a hint: if I were to be forced to live in the suburbs, contrary to my preferences, I would not be experiencing "freedom".
It's funny, because your jibe only really works as a sort of marxist "false-consciousness" and yet it's usually us city-dwellers who are the marxist loons.
blighter - not only do I have the space to stock up on beans, whiskey and ammo, I can grow my own beans in the garden and bag any one of a variety of four-legged critters that are quite abundant in this spot of the world. Then again, I suppose you could do like the Laotian Hmong immigrants do in their apartments around here and grow vegetables in four inches of dirt on the living room floor. And I guess you could find some creative recipes for pigeon, what could become a highly prized local source of protein. Unfortunately I think the pigeon population in NYC would only last about a week or two for you all if things really turned ugly.
It's all fun to contemplate, but in the end it only has a small (but increasing!) chance of actually happening. Thankfully.
Can we all agree that a Committee Chair in the US Congress who makes $170k a year(plus other bennies) should not be living in one rent controlled/stabilized apartment, never mind four of them?
Mike - Particularly not when he has such a nice spot in the Dominican Republic...
Pronk: If something's too good to be true, it probably is.
"It's all fun to contemplate, but in the end it only has a small (but increasing!) chance of actually happening. Thankfully."
gb506 - Amen to that!
Although, if it happens and if I live through it, I think I'd write a history of the era titled "Black Swan Rising".
Quite a few of those rent-controlled apartments are held by people who moved in after 1947, too. The original renters retire, move to Florida, and sublet the apartment. As long as no one checks the name on the door against the people living there no one's the wiser. And of course as the subletters retire and move to Florida they sublet their sublet and on it goes. According to the crazy rent control rules in NYC the property owners can't really check and have to "pretend" the people living there have a right to do so under the original rental agreement because it's just too much hassle to evict them.
That's why a lot of apartment buildings started going condo in the 1970s and 1980s. By offering to "sell" the apartment to the legal tenants at a discount they could force them to either buy or admit they weren't living there. Then they could sell the condo at market prices and make a killing. That's contributed more to the apartment shortage in NYC (and other rent-controlled cities) than anything else.
According to the crazy rent control rules in NYC the property owners can't really check
Not so. My mother just nearly got evicted (well, nearly got hauled into court. Nine out of ten she would have won if they'd gone to court) due to aggressive investigation by her landlord. (The landlord had a good-faith basis for the error: my mother and father have been separated, in the 'not speaking to each other and living in separate domiciles' sense, for over a decade, but aren't divorced. The landlord was trying to clean out non-residents holding stabilized leases, and on a public record search discovered that Dad had established residency elsewhere, and figured that Mom, who is still married to him, was living with him rather than in her apartment.) She had to give them a whole bunch of documentation, and when they asked for more she got worried and hostile, and I had to step in and straighten things out.
(The combination of saying, "Hi, I'm Mrs. X's daughter, and I'm a lawyer. She's lived there since I was six, and so has the kid down the hall, who's in his forties now. Would a letter from him saying that he's known her for thirty years, and she still lives there help?" finally got them off her back.)
How odd the effects of rent control/stabilization (aka government intervention)...
Kate writes that she just paid a fee to the rental agent.....WHAT???
In the uncontrolled/unstabilized rest of the world, I don't think tenants pay real estate agents at all. Landlords do.
I suspect the government policy of rent control gives NY real estate agents an artificial power to take advantage of tenants like few other places.
I would also suspect that real estate professionals (not actual landowners) support this government policy by making "campaign contributions" with a part of the tenant fee money they collect.
Megan, does anyone have statistics on the effects of government intervention with respect to where it is "customary" for tenants to pay more than rent to occupy space?
Aren't you the same Kate who slept with my uncle to get her apartment? There can't be more than one with your twitter style, dear.
Pronk- It would be nice to see some data on how many of the 70% that are living in the rent stabilized apartments have financial need.
In the mid 80's the Sheepshead Nostrand Housing project was populated by mainly elderly whites. The housing authority shut down a project in Bed-Sty and as a result several black families were moved into the Sheepshead project. Apparently unhappy with their new neighbors, 60% of the apartments were vacated that year. This was unprecedented. These families were not transferred to other housing projects. So, whatever, you think of their motivation, apparently these families were benefiting from publicly funded low rent that they really didn't need.
Rangel doesn't have to worry about rent control. Before it's over, he'll be living rent free in a federal penitentiary.
Course, he'll need a few bucks for that axle grease he wears on his hair....
I live in a "rent stabilized" apartment. Yet I pay, let's just say, well above $2000. So how is it rent stabilized? Well, the landlord can choose to rent it for less than what he claims is the market rate and he can choose to increase the rent by the stabilized rate of about 5% per year. This gives him a tax break.
But, in fact, he is renting the apartment for what he believes the market will bear but organizing it in such a way that he can claim he's stabilized it and so get the tax break. At any point each time the lease comes up (every 12 to 24 months)- he can unstabilize it and jack up the rent 100% if he wants.
I wonder how many of these so-called "stabilized" apartments are in the 70% figure.
Also don't confuse control with stabilized. Controlled apartments have ridiculously low rents. Stabilized just means the landlord can only raise the rent by an approved amount every lease period - usually about 5%. These apartments tend to be cheaper than market, but not always, and once they hit 2000 in rent they are unstabilized. They are harder to get than regular apartments - but quite often do hit the open market. Rent-controlled apartments are effectively the ones "out of the rental pool."
The WSJ figures seem to be hocus pocus.
There are only three reasons to live in Manhattan :
1) You are, or are on track to become, at least a mid-level Wall-Streeter earning $300K or more.
2) You are a top exec. in fashion/media/publishing.
3a) You are a female fashion model
3b) You are a male pick-up artist with a reasonably good skill level at picking up fashion models.
Otherwise, there is no reason.
So how is it rent stabilized? Well, the landlord can choose to rent it for less than what he claims is the market rate and he can choose to increase the rent by the stabilized rate of about 5% per year. This gives him a tax break.... At any point each time the lease comes up (every 12 to 24 months)- he can unstabilize it and jack up the rent 100% if he wants.
If your landlord is telling you this, he's making stuff up; there's no such status as 'stablilized but can be destabilized at the the landlord's option'(AFAIK). If you call DHCR, they should be able to tell you solidly whether your apartment is or is not stabilized, and what the stabilized rent is.
And come on, GK, do I go around badmouthing your home town? I'm in none of those categories, and I like living in Manhattan just fine, thank you very much.
I wonder if FDR realized the kind of company he would be having when he started rent controls. I doubt he would have been proud of being in the same boat as Francisco Franco, the Facist Dictator of Spain, who started something similar in 1964 (just Google.es for "apartamentos de renta antigua"); or maybe not...
You know what else I heard? Hitler was totally a vegetarian. No lie.
Megan,
There is a big difference in NYC between rent control and rent stabilized. Rent control appartments rarely make it back into the market. They are way too valuable and people manipulate the family provisions, etc.
Rent stabilized apartments come back on the market all the time. Every time they change hands, landlords can raise the rent signifigantly. In addition, landlords can label certain maintenance activities in those appartments "improvements" and then raise the rent further. This gives landlords an insetive to encourage turnover in the rental population. Landlords do this in all kinds of ways. (Starting with who they will consider renting an appartment to in the first place.) It also means they do not spend a penny on the appartment unless they can term it an improvement somehow. (Unless required to by law.)
I rented in a rent stabilized building in Brooklyn for 6 years. In the time I lived there, more than half of the appartments changed hands. If the landlord can flip a high value apartment 5 or 6 times, the rent will breach the "luxury appartment" threshold and then comes off of the rolls. Thousands of appartments have come off the rolls in the last few years, and this process will accelerate, since the "luxury apartment" definition is not indexed to inflation.
Glad everyone here has pointed out the difference between rent-control and rent stabilized. The first is $150 a month for an apartment that hasn't been renovated since, well, 1947 -- and, yes, there are really less than 50,000 of those. Moreover, inheriting them is a bitch (you have to live with grandma for two years at least, not six months, which does prevent people from inheriting studios).
Rent stabilization is often below market, but rarely that much below market until it's in a fashionable neighborhood and the tenant's been there since the 80's. I myself got a rent-stabilized studio in the village in 1993 for $750 (bailed to buy in 1999 in order to diversify some dot-com money that I'd just gotten, best financial decision I ever made). Luxury decontrol at $2000 created a floor for new & renovated apartment prices that hovers -- surprise! -- just above $2000, so a lot of vacated rent-stabilized places get "renovated" just enough to bring up the rent and now they're out of the system. Rent control may be forever, but former rent stabilized are constantly coming onto the market at market rate.
I think that the real problem is that it costs so much to buy, and I hope this credit crisis brings down the averages for co-op & condo prices. Unfortunately, NYC is still undergoing a sea change from "you should always rent" to "you should buy" and the army of bitter renters who wished they'd bought in the 80's and 80's and will buy first chance the prices drop is keeping apartment purchase prices high. Otherwise NYC would be demonstrating how everyone can be a middle-class property owner who lives without a car.
The landlord was trying to clean out non-residents holding stabilized leases, and on a public record search discovered that Dad had established residency elsewhere, and figured that Mom, who is still married to him, was living with him rather than in her apartment.)
In other words, the only reason they stayed "married" was to keep the rent controlled apt.
The late, great Spy magazine had an article on this circa 1990. The most incredible example they had was some Rothschild living in (IIRC) a three- or four-story brownstone and paying about $80/month.
the only reason they stayed "married" was to keep the rent controlled apt.
No, silly. How would that work? Mom keeps the stabilized lease because she's lived in the apartment continuously since they first rented it. Getting a divorce from Dad wouldn't affect it at all.
Forget the Rothschilds, what about the Ottoman sultan himself?