I attended a real estate symposium about 4 days ago and ran into an investor from Kings County New York. He said it took 14 months to evict someone in NY. I know there are various rent control measures in NY. However, 14 months to evict someone is incomprehensible to me. Wonder if people with ties to NY have an explanation as to how such a system can function.
OT Is it really this bad in NY for Landlords?
- Thread starter dailybuck777
- Start date
IDK, but I had a bachelor great uncle who lived in the same rent-controlled apartment from 1960 until he died a couple of years ago. I think his rent was less than $300/mo. I was surprised his landlord didn't have him whacked long ago.
Fourteen months is quick. NYC's (Kings is Brooklyn) housing laws heavily favor the tenant in eviction proceedings.
There's an all out war against landlord's in NY (more on the residential than commercial end). New laws were just recently passed making it even worse. 14 months is not uncommon (although on the longer side). If you add in appeals, it can be much longer. And all residential tenancies - not just those governed by rent control/regulation.
There's basically no incentive for a tenant to even pay rent on time anymore. Landlords are no longer allowed to seek late fees or attorneys' fees in rent non-payment cases and a tenant can avoid eviction at anytime (even after judgment) by simply paying the outstanding rent. So, a tenant can drag a case out for months or longer without paying rent, wait for a court to issue a judgment, and then just pay at that time and save his/her tenancy.
There used to be huge disincentives to doing this, such as potential late fees, having to pay the landlord's attorneys' fees, being placed on a tenant "blacklist" (that other landlords could access and use to vet future renters) -- but all of those potential risks were removed.
There's basically no incentive for a tenant to even pay rent on time anymore. Landlords are no longer allowed to seek late fees or attorneys' fees in rent non-payment cases and a tenant can avoid eviction at anytime (even after judgment) by simply paying the outstanding rent. So, a tenant can drag a case out for months or longer without paying rent, wait for a court to issue a judgment, and then just pay at that time and save his/her tenancy.
There used to be huge disincentives to doing this, such as potential late fees, having to pay the landlord's attorneys' fees, being placed on a tenant "blacklist" (that other landlords could access and use to vet future renters) -- but all of those potential risks were removed.
Can someone please clarify rent control... can the landlord never raise the rent as long as the tenant remains?
why not just go condo? Have the renters buy the apt as owners, you fiance the balance. When they dont pay , now you are foreclosing as opposed to evicting a renter?
thank god for rent protections. I wish they would extend them to commercial as well. Investors buying up apartments is putting a huge strain on the NYC housing situation.
not to mention builders only building luxury apartments.
There's "rent control" and "rent-stabilization" in NYC. Under the older rent-controlled apts (which are slowly becoming extinct), you need to apply for a maximum base rent increase. Under rent-stabilization, there is a rent-guidelines board that sets how much the rent can be increased on 1-2 year leases (typically somewhere between 0% - 4% or so per year).
Thank you government for ****ing up something that works just fine everywhere else.
Putting aside that I don't see renters or sponsors doing this, not so easy to go condo in NYC. Expensive, need to have plan approved by AG, and if there are rent-stabilized tenants in the building, they can opt out and remain as rent-stabilized tenants.
it’s a tough one. However NYC isn’t everywhere else, it isn’t Cleveland or Orlando. I am sayin this as someone who just sold a million dollar apartment in brooklyn a couple months ago.
NYC needs regulation on housing, just not sure if the current way is the right way.
It isn't just NYC that has laws. Just about anywhere it takes a good 12+ months to evict someone
Don't disagree necessarily - but the laws in NYC just changed to essentially get rid of high-rent/luxury deregulation. Whereas before if the rent was a certain amount or the tenant's income exceeded a certain amount, the apartment could be deregulated and become fair-market, now any millionaire/billionaire in NYC can occupy a rent-stabilized apartment and take advantage of the regulated rents.
I agree and if I were king I would get rid of it all together. However people tend to over exaggerate the problem. It really is a very small portion of rent stabilized apartments in the hands of millionaires.
I knew a landlord in PA and attended real estate investing meetings\conferences. Heard nightmare story after nightmare story of trying to evict tenants. Even after they stop paying rent you can't get them out and if you go thru the courts takes 12+ months. So, it's not just NYC that has this problem.
There are more than a fair share of rent-stabilized apartments that are occupied by those that the laws are not intended to benefit. And even many of those who are the intended beneficiaries, take advantage of the system (not actually occupying the apartments as their primary residence, Airbnb'ing them for profit, etc.).
In Ohio where I am it takes 4-6 weeks to evict. Rents are much lower than NYC. I believe there is a partial causal connection. Also, the NY investor I talked to mentioned that you could make money if you paid cash for your properties. (Unstated assumption is that you can't make money if you borrow)
The 14 month eviction time has to be simply factored in to the cost of the rentals. In my view, it doesn't make sense and doesn't benefit anyone but deadbeats.
Will add that the very high income people always will find ways to skirt regulations of this nature. I know a real estate investor whose properties were in LLCs and were technically under water. (borrowed money for most of his purchases. So smart in rehabbing that properties really not under water although it appeared that way) Even though he was a millionaire several times over, he is able to qualify as a low income person in applying for college loans for his children.
The 14 month eviction time has to be simply factored in to the cost of the rentals. In my view, it doesn't make sense and doesn't benefit anyone but deadbeats.
Will add that the very high income people always will find ways to skirt regulations of this nature. I know a real estate investor whose properties were in LLCs and were technically under water. (borrowed money for most of his purchases. So smart in rehabbing that properties really not under water although it appeared that way) Even though he was a millionaire several times over, he is able to qualify as a low income person in applying for college loans for his children.
That surprises me. I had rental units in FL with a couple buddies. We operated as an LLC, only to discover banks would not give mortgages for rentals to LLCs. We could have gotten mortgages if we signed up as three guys.
And you can make enormously higher profits, percentage-wise, by financing. You only lose (slightly) when you sell, but still come out way ahead.
I was talking about loans and grants for college. You are right that it is difficult to get loans through an LLC. In fact, I have lent money to this investor because the banks mostly won't do it. Banks being really stupid and allowing me to make some money from a very good borrower.
L
Oh...the "borrowed money for most of his purchases" threw me. I thought you meant home purchases.
Big thing in FL as we were selling our last house was sellers financing the buyers. It's a great way to make money, but after dealing with a couple less than ideal tenants, I wanted no part of it. Hands washed!
Oh...the "borrowed money for most of his purchases" threw me. I thought you meant home purchases.
Big thing in FL as we were selling our last house was sellers financing the buyers. It's a great way to make money, but after dealing with a couple less than ideal tenants, I wanted no part of it. Hands washed!
People are focused on rent control as a solution to the affordable housing problem. The real problem is regulation which accounts for 35% of the cost to build new apartments. Reduce the regulations and affordable housing will occur naturally. 100% of all economists will tell you that rent control suppresses supply of housing which will make housing more expensive for everyone else (except for your uncle who is paying $300 per month). It also distorts housing efficiency as someone will stay in a four bedroom apartment for 40 years who would have rightsized if they were paying market rate. The new law in New York is still less restrictive than the rent control regulation in New Jersey.
Don't understand particularly why you think NYC needs rent control. Do you feel that because of rent control, there have been distortions and that any change would have to be gradual to be fair to the people relying on rent control?
Ultimately, I would think letting the market determine rent and prices would be most efficient. Be interesting to compare Beijing to NYC. Beijing prices have skyrocketed and my ex-wife owned an apartment that was worth $300,000 about 7 years ago. Undoubtedly, there is some sort of control of rent in Beijing, it being part of a communist country.
Because I have seen who neighborhoods stripped of their character by investment firms buying up commercial property and jacking up rents.
Basically this is the cycle. 1. Rents are doubled, tripled or way more until the mom and pops that have been there for years are forced out. 2. New places come in, last a year and go under since they too can’t afford rent. 3. The storefronts then sit boarded up until corporation comes in. Maybe the are filled by a cvs or bank. The rest sit boarded up.
How is that good for a neighborhood to have huge swaths of store fronts boarded up, not because no one wants to use it, but because an investment firm with no connection to that neighborhood or NYC wants max profits.
I saw this happen many places. Cobble hill and Carroll Gardens most recently.
So you replace long standing neighborhood businesses with nothing.
and sure, the market will sort itself out, but the neighborhood is destroyed. You can’t have entire blocks of pharmacies and banks.
Something feels really wrong about this process.
You should tell all the people who sold their apartments and retired to Florida to not do it anymore. See how that works.
There are many things wrong with your analysis but the first is how do you think Carrol Gardens arrived in the first place? Pilgrams?
This process has run eveey 50 years or so. The ONLY fix is to stop allowing the govt to subsidize real estate with zero rates.
LdN
NYC has voluminous zoning regulations.
With land costs going every higher in urban areas where the jobs are, I imagine we will see higher and more densely populated housing.
In the near suburbs of Philadelphia, we are having a flood of multistory apartment buildings coming in, close to the train stations. More and more traffic and a risk to school budgets, subject to who the renters are.
Not surprised about extensive zoning. However, if the concern is about the character of the neihborhoods, it seems to me that zoning changes, not rent control, is the appropriate tool to use. In seeing how weird and complicated matters are in NY, it would be interesting to see comparatve case studies as to see whether blue class people do better in rent controlled or non-rent controlled municipalities. Also, would be interesting to see what in general works best for blue collar people in very expensive cities, such as NYC.
Last edited:
This happens here in Austin quite a bit. Property values in Austin (and rents) have skyrocketed in general over the years. I'm very torn on the possible solutions. I prefer a free market and to let things settle out themselves based on supply and demand. But that is resulting in many long time residents getting priced out, either via rent increases or by property taxes for homes that were purchased for reasonable prices and have present day values of $500k+ and now have $15k annual tax bills that the owners can't manage. Of course the argument is that those property owners are now rich if they sell their homes, but the problem is there isn't anyplace else in the city for them to move with the money from selling their homes, so they end up in the suburbs which adds to existing city sprawl issues and adds to commuter traffic problems. I don't think there's any magic bullet fix. Austin is attempting to change zoning laws to permit more multi-family housing on traditional single family lots to try to increase demand. The fear is that change will only increase the value of those lots even more, and will motivate developers to buy up these lots and will drive existing residents out of town. It's a very complicated issue.
While empty storefronts are a problem in NYC, and landlords undoubtedly leave stores vacant in order to try and maximize long-term rents, commercial rent-control did not pass the NY Senate and is probably unlikely to ever do so (I think similar bills have been struck down a dozen times in the last 30 years or so). Likely because, while that may be a solution for one problem, it creates many more.
I recall De Blasio also pushing for a vacancy tax, which would tax landlords who kept property vacant for prolonged periods of time (to encourage them to lower asking rents, or discourage them from pushing tenants out in the first place), but I'm not sure where that stands. I recall that there were also some other measures that passed (to track vacancies and help small businesses), but nothing on the scale of rent-control or vacancy taxes.
Half the country has the mentality that everything should be for free. They support free rent, free everything, and 5-figure tax-returns for non-working people. And more free money for each child they have.
So naturally they support squatting and not paying rent.
So naturally they support squatting and not paying rent.
Similar threads
