New York passing sweeping new rent control rules

[the urban politician]

Interestingly, this affects not just NYC, but the State of New York. The most sweeping pro-tenant legislation possibly in the entire US just passed:

NYC Tenants Get a Rent-Law Blessing That Landlords See as Curse
By Henry Goldman
June 12, 2019
N.Y. lawmakers agree on tenant protections, rental rules
Landlords say changes will plunge city into 1970s-era chaos

Millions of New Yorkers woke up on Wednesday to the prospect of a city where their rents will barely rise, they’re safe from eviction and they’ll never have to put down more than a month’s security deposit.

Their landlords had a different kind of morning.

“Most of these lawmakers were not alive in the 1970s and 1980s to see what legislation like this did to the city’s housing,” Joseph Strasburg, president of the Rent Stabilization Association, which represents 25,000 landlords, said in a statement. “Buildings will fall into disrepair, owners will not have the funds to make necessary repairs to these aging buildings, and thousands of local jobs will be lost.”

The New York state legislature on Tuesday agreed on a package of sweeping tenant protections and rent regulations that would be the biggest rewrite of tenant law in decades. Current rules expire June 15, and these are intended to be permanent. Governor Andrew Cuomo, a third-term Democrat, said he intends to sign them.

The measure, produced by a legislature in which Democrats won control last year, would repeal provisions that remove units from rent stabilization when rent crosses a high threshold or when the unit becomes vacant, or if the tenant’s income is $200,000 or higher in the preceding two years. It also eliminates the “vacancy bonus” provision that allows a property owner to raise rents as much as 20% each time a unit becomes vacant.

https://www.bloomberg.com/news/artic...s-see-as-curse

[the urban politician]

More details about the law here:

https://www.citylab.com/equity/2019/...rights/591514/

[the urban politician]

Plenty of criticism.

Here's a few of many examples:

https://www.washingtonpost.com/outlo...=.8bc33b510290

https://reason.com/2019/06/17/new-yo...althy-tenants/

https://www.wsj.com/articles/albany-...ld-11560466269

[the urban politician]

And, of course, the inevitable lawsuit that will follow:

https://www.nydailynews.com/news/pol...fay-story.html

If this winds up in the Supreme Court's hands, with the current make up of our court, it could be interesting.

The SCOTUS has upheld rent control multiple times, but still.....you never know when the Courts will determine that you've crossed the line--namely, at what point are you effectively taking private property without just compensation?

[Pedestrian]

This will discourage any and all people from wanting to be NY landlords and for many who currently have that unfortunate status to want to escape it. The result should be falling values of rental buildings as well as the problems mentioned above of declining maintenance and so on.

[Chico Loco]

This law is an example of government meddling at its worst. However, there will be some grumbling at first, but people adapt. I can see owners reducing maintenance and going cheaper with repairs, but that's about it.

[LosAngelesSportsFan]

what a disaster. You're gonna see a lot of buildings falling into disrepair in the years to come

[mhays]

It's not just people doing a little maintenance to keep buildings open while letting them fall apart.

Worse, at some point, there's no point in keeping a building open at all. I mean the point where just keeping the building up to life safety codes would be more expensive than the rents you can get out of it. At that point, buildings can be abandoned. Often buildings are way below safety/functional codes for a while before they're actually closed.

[the urban politician]

Politicians in America have done worse than rent control to decimate cities.

They care more about votes than anything else. And the Supreme Court has done little to stop the erosion of property rights that were written into the Constitution.

[Crawford]

If this goes through, and the inevitable lawsuits are unsuccessful, you'll see an enormous conversion push, because there's no way to make money on rental housing. Basically every landlord will plot how to do a coop or condo conversion.

And this is Example 807,211 that populism, whether on the Right or Left, is dangerous and stupid. When a politician claims to be "for the people", be very afraid.

[C.]

Originally Posted by Crawford

If this goes through, and the inevitable lawsuits are unsuccessful, you'll see an enormous conversion push, because there's no way to make money on rental housing. Basically every landlord will plot how to do a coop or condo conversion.

And this is Example 807,211 that populism, whether on the Right or Left, is dangerous and stupid. When a politician claims to be "for the people", be very scared.

Could not agree more - rental housing will just become more expensive. The solution is too allow the construction of more housing. Right now there is just so many regulations that only the luxury stuff can get built without a subsidy.

[jtown,man]

Originally Posted by Crawford

If this goes through, and the inevitable lawsuits are unsuccessful, you'll see an enormous conversion push, because there's no way to make money on rental housing. Basically every landlord will plot how to do a coop or condo conversion.

And this is Example 807,211 that populism, whether on the Right or Left, is dangerous and stupid. When a politician claims to be "for the people", be very afraid.

An unintended consequence could be the market being flooded with for-sale condos which will help people become homeowners more easily?

Trying to stay positive

[Gantz]

Originally Posted by Crawford

If this goes through, and the inevitable lawsuits are unsuccessful, you'll see an enormous conversion push, because there's no way to make money on rental housing. Basically every landlord will plot how to do a coop or condo conversion.

And this is Example 807,211 that populism, whether on the Right or Left, is dangerous and stupid. When a politician claims to be "for the people", be very afraid.

These things are not cheap or quick. These laws will basically squeeze out any small landlords, because they wouldn't be able to afford buyouts or keep running on low margins for years, plus legal fees and court battles. As a developer, you'd also be an idiot to construct rental and not condos now. Why the hell would you create an asset with such a limited upside. Your income is literally capped by the government. People were already complaining that NYC developers were constructing too many luxury condos, wait till people realize wtf just happened. I think also how these laws were written, they made the low income portion of all 80/20 buildings effectively into RS...I think they'd have to tweak the wording on the bill.

[mhays]

Yes, but the for-sale housing will be out of reach of a large percentage of those residents the law is supposedly trying to help.

With rentals there will be haves and have-nots. Some will live in artificially-cheap housing that falls apart over time, but new apartments will be far more expensive when they open, because waiting around eight months for a tenant at $3,500 is better over decades than signing one quickly at $3,000 and never getting to the same rent levels.

[the urban politician]

A few solutions to keeping rent controls for tenants while not making it such a lousy investment for landlords:

1. Allow leases that require tenants to provide their own limited basic in-unit maintenance (ie they hire their own plumbers to unclog sinks, fix the furnace, replace a broken faucet, fix appliances, etc etc)

2. Landlord furnishes no kitchen appliances--tenant brings and maintains their own (in cities like Chicago, it's typical for the landlord to furnish appliances)

3. Give special expedited court/eviction treatment for non-payment of rent. I think that this is where legislators really have it wrong. If landlords don't receive rent, you effectively are throwing a wrench into the entire business which can affect the building's stability as a whole; and the legal system should address this matter more quickly than in other landlord/tenant disputes that may be given a bit more time.

[Obadno]

Originally Posted by the urban politician

Interestingly, this affects not just NYC, but the State of New York. The most sweeping pro-tenant legislation possibly in the entire US just passed:



https://www.bloomberg.com/news/artic...s-see-as-curse

I understand the desire to protect tenants but many times these rent control laws just destroy incentive for people to become landlords and build more housing.

Increasing rents=increasing housing supply unless like San Francisco you have such insane regs that it makes it too expensive or outright impossible to build more units.

In the end you get people who park in rent controlled units as new units skyrocket thus negating any bennifit of units entering the market.

[the urban politician]

Originally Posted by Obadno

I understand the desire to protect tenants but many times these rent control laws just destroy incentive for people to become landlords and build more housing.

Increasing rents=increasing housing supply unless like San Francisco you have such insane regs that it makes it too expensive or outright impossible to build more units.

In the end you get people who park in rent controlled units as new units skyrocket thus negating any bennifit of units entering the market.

^ Well, this isn't about good public policy, it's about appeasing your constituents by transferring wealth away from and stripping rights away from your non-constituents.

Problem being, the Constitution was written, and courts exist, to protect our society from wanton intrusions like this from Government. But they aren't doing their jobs....

[Hudson11]

New York is being over progressive. There's trying to set an example to the nation and then there's establishing an anti-business environment. It really feels more like the latter recently.

[the urban politician]

Originally Posted by Hudson11

New York is being over progressive. There's trying to set an example to the nation and then there's establishing an anti-business environment. It really feels more like the latter recently.

Good point.

It almost seems like this is some sort of backlash against something.

[jtown,man]

Originally Posted by the urban politician

Good point.

It almost seems like this is some sort of backlash against something.

Yeah. America is messed up right now. Everyone is trying to out do everyone else on how far they can go one way or another.

NY, Ill, and VA(well they tried) making abortion more expansive...So you have places like MO, GA, and AL say...HOLD MY BEER!


At this level of antics, soon NY will have mandatory abortions for everyone and a 100% tax level and AL will execute all women who had an abortion in the past and gay people will be sent off on their own trail of tears.

Really though, it's sad to watch. I am conservative as they come, but moderation is the only way to go with actual poltics because there are people that don't think like myself and people(me, everyone) have to respect that.