One of the less talked about aspects of rent stabilized apartments is how people become trapped in them.
I know people who have been living in rent stabilized apartments in NYC for decades who will never let them go, even though they no longer like the neighborhood or the unit.
Of course, it is hard to feel sorry for someone living in a $1,200/mo 1-bedroom in a nice area in Manhattan.
I briefly lived in Manhattan, and I think my neighbor across the hall was in such a unique situation.
The building was an old one in the center of Manhattan, but newly renovated. I moved in in 2021, and I think everybody had moved in within the last 5 years. There were a bunch of young professionals that had graduated from NYU and such.
But this guy was the only one without the iPhone electronic lock on his door -- and good for him, the iPhone locks are a reason why I moved out of the building! (Unsurprisingly, the locks once malfunctioned and we were locked out of the building. Computers make everything work very poorly these days.)
Anyway, I chatted with him in the elevator, and once asked when he moved in. I believe he said 1989 -- anyway, it was like 3 decades.
He didn't look to be more than 40, so I guess he must have lived there as a child, and inherited the apartment.
Also, whenever I talked to him, he would say something super political without prompting, like "Adams is fucking slob, under Giuliani we had law and order" or something.
(Also, he was black, which may break your mental image a bit.)
A bit of an aside because it sounds like he really did live there full-time, but another reason why people in RS units wouldn't want an phone-enabled lock on their door is it possibly gives the landlord information on how often they come and go.
Some people who have units like that live somewhere else but just can't bring themselves to let the things go, so they use them as storage and go by once a week to check the mail.
I had a rent controlled apartment in Midtown for ~$1300/mo. It's the apartment I grew up in and I finally got fed up and left two years ago.
The landlord put giant holes in my floor to get access to some pipes and wouldn't fix them for over a year.
After leaving the landlord tried to bill tens of thousands of dollars to bring the apartment up to their current standards -- even though we'd been in there since 1970 and the landlord never spent a cent on modernizing the apartment along the way. 100% of the renovations and upgrades we did ourselves. The apartment was left in great condition.
I completely agree with you that it's a trap. The place made me completely miserable and even though at the end I finally earned decent money to leave, I chose to leave the city entirely.
> rent controlled apartment in Midtown for ~$1300/mo
> landlord tried to bill tens of thousands of dollars to bring the apartment up to their current standards
> landlord never spent a cent on modernizing the apartment along the way
Surely you see that these are directly connected. With an increasing cost of living and a legally fixed profitability per month that isn't going up over time nor keeping up with inflation, from the landlord's perspective, there's little to no incentive for them to fork over cash they never got from the apartment to put back into it. At that point the only incentive is to hold onto the property itself and wait for its value to increase while deducting depreciation, and perversely, they are incentivized to make you as uncomfortable as possible since they cannot raise the rent on the unit until you move.
It's my opinion that if we want rent control, there should be a cap on the amount of time that ends sooner than "on death", especially if you're not old. (For old people who are basically living in the last unit of their lives, it makes sense to me to rent-control those).
> Surely you see that these are directly connected. With an increasing cost of living and a legally fixed profitability per month that isn't going up over time nor keeping up with inflation, from the landlord's perspective, there's little to no incentive for them to fork over cash they never got from the apartment to put back into it. At that point the only incentive is to hold onto the property itself and wait for its value to increase while deducting depreciation, and perversely, they are incentivized to make you as uncomfortable as possible since they cannot raise the rent on the unit until you move.
Sure and we also stayed and maintained the building and the landlord's property through the 70s and 80s when New York was a cess pit. My neighborhood was famous for petty crime and was full of pimps, street hookers, bums and scammers -- New York was half empty compared to now.
My landlord still had their property because of tenants like us who stayed when life in NY was grim. I was just around the corner from a building famous for the landlord trying to burn the tenants out (The Windermere).
Also what the landlord was doing by not completing the repair was illegal. Fineable. Slumlordish. Having a 2' round, 1' deep hole in the doorway of my bathroom floor is a massive safety issue. You're saying my landlord shouldn't be required to repair it because of incentive? If I fell in their hole and hit my head on the toilet and died, they would have a multi-million dollar liability on their hands.
> You're saying my landlord shouldn't be required to repair it because of incentive?
I'm saying the landlord shouldn't be expected to lose money on a unit. That's really not a drastic thing to expect, unless you are an entitled child who simply expects things to be given to them.
You were living in a rent-controlled apartment and your non-rent-controlled neighbors were likely paying double, triple or more what you were paying. Your expectation of even more beyond the privilege of living in an area that you should have been paying many times more for, is astonishing to me. You have CLEARLY never owned any kind of property, either to live in or rent out. That means there's this entire segment of reality that you have zero exposure to which is tainting your worldview with falsities about what owning property is like.
This reminds me of a story a lawyer friend told me about one of her coworkers. They all work for a nonprofit but this one coworker demanded to be paid more, based on nothing. Complete unrealism. shrug.gif
One day you should try buying any property at all, and try renting it out at cost while also still doing all the paperwork and having to eat the bills that continue to flow (such as mortgage) even when it's vacant. Then, also spend tons of time going to court to attend to frivolous lawsuits made by slightly-crazy tenants.
Anyone who thinks that landlords can or should be expected to pay for repairs from thin air would not get along with me, true. It's tough being a realist adult instead of a fantasy-prone child, I guess
My friend has a rent controlled -- huge LR, kitchen, dining room, 2 hallways, 2 bedrooms, 1 bath, 18 foot ceilings, in low 80s upper east side. $500/month. I think his neighbor's rent is like $6500. Yeah he's not leaving.
Living the high life, literally in terms of the ceilings. Having ceilings like that is so mind-blowing in a living space, as it opens everything up drastically. That is an insane rent. From the description, the size is great. What is the condition and quality of the place? And I'm not all that familiar with New York's neighborhoods. Is low 80s upper east side a good neighborhood?
I know you are asking genuinely but to a New Yorker it sounds like you’re making a joke. A few from facts from Wikipedia [1].
“It has long been the most affluent neighborhood in New York City.”
“The Upper East Side maintains the highest pricing per square foot in the United States.”
“Four of the top five ZIP Codes in the nation for political contributions are in Manhattan. The top ZIP Code, 10021, is on the Upper East Side and generated the most money for the 2004 presidential campaigns of both George W. Bush and John Kerry.”
I figured, but my perception of Manhattan is that neighborhoods can change drastically from one street block to the next, so while I know the upper east side is generally, well, upper, I wasn't confident in the exact location. Also, I was just flat out lazy and didn't bother looking up the street numbers on a map, where I would have realized the proximity to Central Park.
Aside from a few historically sleazy streets/areas in the past, I don't really associate those sorts of sharp boundaries with Manhattan nearly as much as I do some other cities, especially in the South. (Though, for obvious reasons, apartment buildings/condos across from Central Park tend to be higher-end than those east of there.)
The averages skew things a bit here. Yes, many of the wealthiest people in the world live in the UES, but in between those single-family mansions and full service buildings full of quiet billionaires on the park, there are plenty of unremarkable apartments occupied by white-collar families. Its a more affordable neighborhood to rent in than some other family-oriented parts of Manhattan.
> It's wealthy, but not anywhere near the wealthiest area in the country, or even in Manhattan.
It is, depending on the year, how you measure it, and what you consider "Upper East Side". That last part is important: the UES has three main subneighborhoods with very different demographics and characteristics. It's also adjacent to East Harlem, which is historically not wealthy and brings the mean/median down for any measure that includes part of it.
For example, here the Upper East Side is listed as the wealthiest neighborhood in the entire city, all five boroughs: https://ny.curbed.com/2017/6/27/15881706/nyc-richest-neighbo.... This is using household income, which is one measure. Alternate measures include median rent (skewed due to rent regulations), net worth, property values, etc.
Point is: calling the upper east side an "upper middle class" area is an understatement. If it's not a wealthy neighborhood, then nowhere is.
High ceilings mean flats also take a lot more energy to heat in winter. If heating were out of my own pocket, I might pass on a flat with high ceilings even if rent were attractively low. Do NYC blocks like the GP describes typically include heating in the rent?
"Early 80s" would refer to the year. "Lower 80s" in Manhattan means they live somewhere in the area bounded to the south by 80th Street and to the north by 85th Street--which includes part of the Upper East Side.
I feel the same for people with near 0% interest rate mortgages. Like we bought a starter home prior to the pandemic. Buying the same home now would be 3.5x the monthly mortgage payment. Buying a slightly nicer, 1 extra bedroom near our neighborhood is completely out of the question. Since no one wants to move because rates are so high it creates a vicious loop of more buyers than inventory on sale.
Can you not port mortgages in America? I have 4 years left on my mortgage, if I want to move though I can simply sell this place, buy somewhere new, and phone up my mortgage company and take the debt with me - as long as the new place is about the same or more than the current place (so the LTV stays the same or better).
No, mortgage portability is not a thing in the US, at all. Mortgages are tied to the property and the borrowers. I've never heard of a (US) borrower being able to sell their property and keep the loan. Alternatively, it is sometimes possible for a new borrower to assume the previous mortgage, but it's up to lender discretion, and seems unlikely if a current mortgage would be at a dramatically higher rate.
What does seem to happen often is that an owner who wants to move but doesn't want to lose their nice rate will move and then rent our their old place, or at least try to, it can be difficult to qualify for a new mortgage while carrying the old mortgage and not having a history of rent payments.
Assumable mortgages were a (common) thing until the low interest mortgage Era. But they are (again) a thing and in-fact add premium value to the selling price of a home if your mortgage happens to have the feature along with a low interest rate. VA mortgages are the convenient example for this but there are other types of assumable residential notes as well.
https://therealdeal.com/national/2023/06/12/assumable-mortga...
Matt Levine wrote about this recently. In theory there's a win-win trade where you should be able to buy out your 3% mortgage at a discount (or equivalently, pay it off and get a mortgage on a new place at a slightly higher rate). In practice, banks won't do this because they figure you're bluffing and will eventually move anyway.
There's some exceptions, USDA, VA, and FHA loans. All government programs. But it's tied to the property so only transferable to the purchaser. Very rare here even now with rates changing so much.
Not typically AFAIK. The mortgage is secured by a specific piece of property which has been inspected, title-searched, etc. It's not a random unsecured loan. It's also the case in the US that you can generally just pay off the loan any time you want.
Normally in the U.K. they are fixed for a period of time - 5 years is quite common, but you can get 10 and even full term ones. You can also get ones which track the base rate.
Typically people refix after the term. My 5 year recently ended and my monthly cost increased as I’m now fixed at a higher rate for another 5 years - at 4.5%, although it’s still less %age of my wage than it was 5 years ago.
During the fixed term you can’t repay it without a penalty, but if you move house you can port the mortgage so it’s secured against the new house instead.
Yep. It's using the fed to reallocate money from the inflated cash based poor to the credit rich home owner. Home owners are basically using government induced negative real interest rates to regressively tax non-homeowners.
We got blown away by the pandemic that locked up the housing stock. So I cheated and built my own house for like 1/4 the cost it is on the market as it's almost all markup from the opportunity cost of losing the 0% loan.
For those that have lost hope seriously consider a prefab for like 60k dropped on some vacant land. Where I live you don't even need inspections or license to do it yourself. But you need to develop the land yourself, and not hire out a GC, because developers will always be chasing high margin luxury builds rather than the low margin methods I've discovered for economical housing.
I was not intending to make that case. Negative real interest in our real life reality where the better off have better access to credit nearly certainly hurts cash based poor by making homes etc cost less in real terms to the rich at the expense of inflating the poor.
Basically the poor have worse access to credit than other groups so when interest goes negative in real terms the poor pay for it.
Do you mean rent stablized specifically vs controlled?
About 1% of NYC apartments are rent controlled, about 50% are rent stabilized.
In controlled units you might see a minor increase over time, but generally you're paying what the unit was priced at 50 years ago. Leaving typically means an increase in rent of 500-700%, and these are practically impossible for new tenants to get.
In stablized units the rent can only be increased by a percentage determined by a board, typically 2-3% a year.
Stabilized units can increase something like 4% a year, up until they hit the threshold that takes them out of stabilization.
Controlled units can increase 2% every two years and historically did not do so from the 90s until a few years ago where increases have been happening and the housing board has advocated on behalf of landlords for additional/emergency increases.
Rent increases can happen completely separate from this process through building improvements and from the late 80s through to the early 2000s, my landlord managed to add $700 onto our controlled rent through really shady/shoddy/fake building improvements.
Growing up about 80% of the units in the building were rent-controlled and when I left there was was only 1 controlled unit left after mine. Nobody in my family, even though they all still live in NYC, wanted to take over the apartment.
Most controlled apartment renters die and have nobody eligible to take them over (an immediate family member has to cohabitate for like 2 years with the renter). The number remaining across all of NYC is exceedingly small, like under 15000. There are ~4 million housing units in NYC. Rent-controlled apartments are true unicorns. But close to 75% are stabilized.
They would do shit like slap a coat of primer on the hallways and add $50/mo in permanent rent to everyone's bill (90 unit building).
Rent Guidelines change every year. They've typically been 2% or lower. Due to high inflation, the latest increase is 3.0%. [1]
There is no longer High-rent or High-income rent decontrol since 2019. Individual Apartment Improvements and Major Capital Improvement now provide a much smaller basis for rent increases and/or are temporary. [2]
missing the forest for the trees. three years of change doesn't make any difference.
To have rent control you have to have been in your apartment since before 1970. Capital improvements are how rent-controlled apartments had their rents jacked up between then and now. The majority of decontrol happened before any changes made in 2019.
The suggestion made before was that rent-controlled apartments were locked into the prices people paid 50 years ago and that's not remotely true. Also the number of rent-controlled apartments remaining in NYC is practically insignificant.
The OP was unclear, controlled units are certainly not "locked into" any price. To your point:
> rent control operates under the Maximum Base Rent (MBR) system. A maximum
base rent is established for each apartment and adjusted every two years to reflect changes in operating costs. Owners [...] are entitled to raise rents the [..] the average of the five most recent Rent Guidelines Board annual rent increases for one year renewal leases [...] until they reach the MBR
I lived in a nice apartment building in Toronto from 2015-2020. One couple in the building had lived in the same rent-stabilized apartment there since 1967.
On the bright side, it was a well-maintained building in a good neighborhood, so they had reasons to enjoy it being just the price.
I think most people 'trapped' in a rent-stabilized apartment would prefer it to homelessness.
I understand this may make the neighbours feel jealous, but hey, I'm jealous of my neighbour who bought his house for 1/3rd of what I paid for mine... Life's not fair.
I know people who have been living in rent stabilized apartments in NYC for decades who will never let them go, even though they no longer like the neighborhood or the unit.
Of course, it is hard to feel sorry for someone living in a $1,200/mo 1-bedroom in a nice area in Manhattan.