Rent Regulation and Affordable Housing in NYC
I'm currently interning for a property owner/developer in NYC and everyone in my office has been talking about this this morning. I understand that people need to be able to afford housing, but it seems to me that regulations like this which severely limit rent increases after renovating apartments (among other things) will mainly screw over smaller landlords who can't afford to get such low return on investment and cause owners to neglect their housing stock. I've always thought that the problem of rising rents is an issue of supply and demand and it doesn't seem that regulations like this do anything to address the core issue. Would be interested to see what others on the forum think.
You are a smart young intern. You are thinking about this correctly. This bill was more spiteful than thoughtful.
It will not only screw over small landlords, it will fuck EVERY landlord who owns rent stabilized buildings (i.e. lightstone who overpaid for large RS buildings in the bronx to get ahead of the growth - they are now totally fucked). If this bill passes (which it seems like it will), landlords will not be incentivized to invest a single dollar in their buildings. NYC thinks they have slumlords now...just wait and see.
IAI benefits capped at $15k. MCI increases capped at 2% per year. 30 year term for improvements...THIS IS A JOKE Repeal of vacancy decontrol Repeal of luxury decontrol Repeal of vacancy increase Pref rents are permanent discounts until vacancy
There are many more items that hurt, but the above are the major points. The RS market in NYC will be frozen. Values will be destroyed. Properties will deteriorate. Fringe market growth will stall out. Capital will reallocate to new construction product and development, further compressing yields and pushing rents.
We live in a socialist world my friends. Invest outside of NYC and find a business that benefits from government handouts and subsidies.
In the game of legislative roulette the dems laid it all out on double zero and Mr. Wynn just paid the fuck out.
Have fun my friends.
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