Here’s How Landlords Are Getting Around New Rent Laws

Feb 29, 2020 · 33 comments
Manhattanite (Chelsea)
I recall the last time landlords waiting for a law to end was the New York City Loft Law. They refused to bring their building up to code and harassed loft tenants in a myriad of ways. Eventually, after about 30 years, the Loft Law in now permanent, as it should be. And here the usual suspects write in, wailing and bemoaning their fate of not making the piles of money they expected. Putting small landlords up front, the ones who may have some legitimate claim. However, the large majority are companies own many, many units in mid and large and multiple buildings. This law was brought about because of decades of abuse. And there is the duel value of landlords, their property value increases! If this law is too much for you, sell your property and make your millions now!
Tall Tree (new york, ny)
@Manhattanite That's totally false. Half the landlords in NYC are small landlords like myself.
South Of Albany (Not Indiana)
Manhattanite is talking about specific manufacturing buildings where the landlord has charged rents illegally (no Certificate of Occupancy). Most of these large buildings are in fact owned by multinational investment firms and corporations.
Voltaire42 (New York, NY)
And here, ladies and gentlemen, is the incontrovertible evidence that leftists want to fully expropriate a private individuals property: If this passes I don't see how even the liberal wing of SCOTUS could deny the RSL is a government taking plain and simple.
Rev. E. M. Camarena, PhD (Hell's Kitchen)
Depending on where one lives, there may be zoning restrictions that prohibit building owners from combining apartments - since it amounts to the removal of an apartment from the community. (I never use the feudal term LANDLORD) Here, in the Special Clinton District, such alterations rarely get approved. One that did some years ago, pulled it off after more than 5 rejections by the DOB on the grounds that it violated the zoning regulations which prohibit alterations that reduce the percentage of two bedroom apartments. A court later upheld the original rejections and the apartment was split back into two units. The DOB official who suddenly approved the alteration was subsequently investigated. One incident of combining (on W. 44th Street) got approved because two separate Railroad Flats, one above the other, got combined into two separate duplexes - so there was no loss of apartments, just a reconfiguration.
Ben (Ridgewood, QNS)
@Rev. E. M. Camarena, PhD Hi Reverend, I am very familiar with NYC zoning regulations. You are right that in the Special Clinton District there are restrictions relating to combining apartments. But those restrictions are actually very unique in the City - other than in Clinton there may only be a few other areas of the City where those rules exist. Just thought you'd want to know how special Clinton and Hell's Kitchen are in that regard. Best, Ben from Ridgewood.
B. (Brooklyn)
As a Brooklynite born in Brooklyn almost 66 years ago and living here ever since, I see a couple of problems. First, New York City is built mostly on islands with a finite amount of room, and there’s something called the law of supply and demand. Not everyone can live in desirable neighborhoods at the price they want. We have underdeveloped areas in, say, Brooklyn but with longer commutes; and, believe it or not, new buildings are going up in those places, but The New York Times never sends reporters out there. Why? Second, a little judicious use of birth control would mitigate the need for ever more low-income housing. The rich did not take over formerly quiet, safe, solidly middle-class neighborhoods in Brooklyn, like Flatbush and East Flatbush; the poor and dysfunctional did, with the aid of Section-8 housing and subsidies, in the late 1960s. Nothing is monolithic. Some landlords try their best with horrendous tenants whom they cannot evict. Others are rapacious, for example the one who served an eviction notice for non-payment of a rent increase to my elderly friend. Summoned to court, in her late 90s, she gathered all her receipts and canceled checks and took two buses to downtown, where she proceeded to embarrass the landlord’s lawyer and amuse the judge. One hundred and one years old now, she continues to live in her Flatbush apartment building which, when I visit, never ceases to disgust me. The condition of the building is appalling. Why, is anyone’s guess.
Voltaire42 (New York, NY)
As a small NYC landlord (10 units) I have stopped renting stabilized units. The expense of maintaining them, especially now that it is much, much harder to evict a tenant for non-payment, means that I loose less money by keeping them vacant. The actual effect of this law is loss of housing. TallTree is absolutely right - these laws are just a result of the "progressive" politicians pandering for votes. They are providing a social benefit to a small, vocally rabid class of voters at the direct expense of other, private individuals, property owners. The courts will strike this down for the government taking it is. "Just Cause Eviction" is simply the next step in the socialists goals of expropriating all private property. Caveat emptor!
NYTNYC (New York City)
@Voltaire42 You are the definition of the problem. This guy got all the tax breaks afforded to him when he purchased a building with rent stabilized units but not he is keeping them off the market making situations worse which have led to the new legislation.
Tall Tree (new york, ny)
@NYTNYC Wrong. You get no tax breaks purchasing a rent stabilized property.
Voltaire42 (New York, NY)
@NYTNYC You clearly did not read nor understand what I wrote: "I loose *less* money by keeping them vacant". If the state allowed me to make money, why wouldn't I? And you are confused regarding tax breaks for buildings with Rent stabilized units. You are thinking of the 421a program in which developers voluntarily submits units to the Rent Stabilization scheme in exchange for tax breaks. None of my units have tax breaks. As a landlord I receive absolutely zero benefit from being subject to rent regulations.
The Truth (New York, NY)
I hope landlords are “getting around” the rules- pushing back against this ill conceived legislation.
Dot (New York)
The rental apartment situation in NYC becomes scarier....and scarier....and on and on. as ever gigantic new buildings are in development....for condo or coop tenancy. Those of us who are older tenants and are NOT pressured in any way by building managements are ever so grateful.
t power (los angeles)
protections from predatory landlords make sense but, rents frozen from 30/40 yrs ago are nuts: they should be continuously adjusted to some percentage of the market rate. there could be a fund or tax break for landlords that provide subsidized housing
Voltaire42 (New York, NY)
@t power You are absolutely right, but the city / state does not want to pay for an obvious public benefit, thus the force the burden on private individuals, the property owners.
IGupta (New York)
@t power Meanwhile property taxes are pegged at market value of the property. Double standards.
Henry Boehringer (Dutchess County)
@IGupta no they are not. Please look for articles on NYC Property tax reform to be better informed.
Andrew (Brooklyn)
Consumers want to buy things as cheaply as possible while business owners want to sell them for as much as possible. Those basic economic principles apply to real estate and don't stop existing because of a law.
Kathleen (Boston)
@Andrew how inconvenient that people die without shelter. Were housing not a necessity these businessman, these landlords, would get to enjoy many more facets of the free market. In fact, maybe if they don't like participating in a business that is extremely regulated they should have thought of that before they became landlords. People are always blaming others for there own lack of foresight. I guess landlords are no exception.
J c (Ma)
We should limit supply and cap prices, THAT will result in more and cheaper things, right? NYC is a desirable place to live. I wish I could live there at a price that I choose, but I cannot. Why do some people feel entitled to it is beyond me.
grmadragon (NY)
@J c Same as Venice and Santa Monica beach in California. I lived in California most of my life. I could never afford to live within walking distance of the beach. I used my allowance to take the bus there until I was old enough to drive. Then I drove there in my old 48 Chevy as often as I could afford the gas to do so. Now, many people feel it is their "right" to live on the beach whether or not they can afford it. The sense of entitlement is overwhelming. There are places people can live in California without being rich.
Tired Voter (Toledo)
Asking from flyover country: how do landlords ever make any money, or even break even, with rent control? I’ve seen stories about old people in the same flat since the big war who pay $300 or some small amount? I’m no pro-landlord person, but at what point does a person start paying fair market value? It’s a strange system to an outsider.
The Truth (New York, NY)
As a landlord I have a tenant who is rent controlled and pays less than $200 per month for an apartment that is worth about $3000 per month. They have succession rights too!
Andrew Porter (Brooklyn Heights)
@Tired Voter Landlords with rent-controlled—NOT stabilized—apartments are allowed to get an increase of 7.5% every year, if they meet the requirements, don't have outstanding violations, etc. In the 1970s there were over a million rent-controlled apartments. There are now under 20,000.
Tall Tree (new york, ny)
@Andrew Porter Buildings that are profiting cannot get that rent control increase unless the owner attests otherwise. Plus the paperwork is onerous. Also the laws were just changed reducing the increase to the approved stabilized increase which has averaged only 1.875%/year over the last decade. It's a joke. Few landlords are able to qualify. Most rent controlled tenants never see rent increases unless through MCI's -- which for effective purposes have been eliminated.
Tuvw Xyz (Evanston, Illinois)
All laws are created with loopholes in them. The interests of the landlords and their renters are in eternal struggle. But if the landlords were squeezed to the point of dispossession, the rental market would dry up, and what would then the renters do?
J c (Ma)
@Tuvw Xyz It's actually the non-landlord owners that are hurting renters. Non-landlord owners--that is, single family, condo and co-op owners--demand expensive services that raise taxes, but then vote to create exemptions for themselves. Guess where all those taxes land? On multifamily housing. That is: on renters. Wake up renters, every landlord I know would LOVE to build a few more units on their property in order to create more housing, even though that would LOWER average rents because supply would match demand. But non-landlord owners are blocking development ("to preserve the neighborhood!") and voting to shift taxes away from themselves and onto rental property... Pretty immoral if you ask me.
Tall Tree (new york, ny)
I'm a NYC who plans on keeping every single rent stabilized apartment that comes vacant off the market. My apartments on average need $75,000 total renovations, and I'm certainly not going through that kind of hassle and expense to rent an apartment at 1/3rd of market value for life to a stranger. It's really sad. Prior to these crazy new rent laws, I would have done an awesome renovation after a 50 year tenancy finally ended, and a new tenant would have gotten a spectacular apartment. Yes, I would have made money, but the city would have made even more in increased property and income taxes. Remember, property taxes on multifamily in NYC are calculated at 1/3rd of gross rent on buildings with over ten units. What really irritates me is that NYC could have taken that new monthly windfall and subsized the rent for some needy individual if they had really wanted to. It goes to show that these "rent protections" are just a farce the Dems use to get votes. Now, nobody will get the apartment and it won't get renovated. It will sit vacant for years and year, until the laws change to something more rational.
Sensible (Manhattan)
@Tall Tree I am in total agreement. Why invest in renovating apartments and get a substandard return on that investment? The city is getting hurt by these rent laws, as aging housing stock crumbles.
South Of Albany (Not Indiana)
J-51 tax abatement.
Marta (NYC)
Nice threats. The capital improvement program was grossly abused- a cheap renovation with substandard materials - valued at 50k based on collusion between the landlord and the contractors. If you want to complain about MCI laws, talk to your fellow landlords. Their greedy machinations are what this legislation addressed.
David Binko (Chelsea)
There are tradeoffs and consequences for living in a more socialist market paradigm. First, there is the fact the owner is less likely to spend the money to keep her building maintained and habitable. Second, in this specific case, the apartment is not even being used, and eventually when it is combined there will be one apartment where two once were.
Tall Tree (new york, ny)
@David Binko Don't assume the landlord plans to combine units. That requires a new C of O to change the unit count which is extraordinarily difficult to do in many cases. Most likely, the landlord is making the rational decision to just lock the door. His building is worth more with a vacant unit than with a low rent stabilized forever tenant. Maybe he plans to let his 12 niece live their one day. Who knows?
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