1. You have
actually hit on a nerve which I have been wanting to itch for a while. Can we
do a simple poll here where people that rent in our nabe self-report what rent
they pay. I for one pay $1800 for two bedrooms. Depending on the day I feel its
either fair or outright outrageous. I also know that my building is rent
stabilized and that my rent should realistically be around $1200 given that the
last tenant paid around $930 a month. I need to pick this up with my landlord
obviously. While market rate offerings are desirable to attract a certain
demographic we also have to temper this with the ultimate desire that this
neighborhood not go the way of those other inflated ones... at least not
artificially by landlords who prey on unsuspecting tenants who aren't aware of
the rules for rent increases. So there. Not sure if blogger has capabilities
for polling but perhaps something like surveymonkey can be used. Happy to
volunteer to put it together.
2. To rent or
not, $1800 a month is about the going rate for a two bedroom apartment here,
and it is very possible that that is the legal stabilized rent for your
apartment, regardless of what the previous tenants paid. Every time a rent
stabilized unit turns over, the landlord is immediately entitled to a vacancy
increase of between 18% - 20%, depending on whether the new lease is a one or a
two year lease. Additionally, a further 0.6% per year is added for each year
the previous tenant occupied the apartment if it was for more than 8 years, so
potentially right there you could be looking at a 25% increase right off the
bat, making that apartment now $1162.50.
3. In my experience, floorthroughs in PLG range from $1500-$2000, depending on quality of finishes, yard access, etc. Many people pay less, but I'd say open market a floorthrough in a limestone will be $1800.
4. $1350 for a one bedroom and live in super? That's a good deal.
3. In my experience, floorthroughs in PLG range from $1500-$2000, depending on quality of finishes, yard access, etc. Many people pay less, but I'd say open market a floorthrough in a limestone will be $1800.
4. $1350 for a one bedroom and live in super? That's a good deal.
5. Maybe because I'm a long-time resident of PLG
(2+ decades now!:-D), but I feel like rents are ballooning out of control. One
of my concerns is a company like Abba monopolizing most of the listings in the
neighborhood and, IMHO, artificially inflating rents. How much of a concern for
agents; if at all? Many tenant's just aren't aware that they are being
overcharged, so they'd never know to report anything. For example, I moved
within my building a few years back and found out that tenant that took over my
old apartment is paying almost 60% higher rent than I did. My landlord's excuse
was that he completed MCI, but all he did was paint and re-glaze the tub.
6. 1800 for a
two-bedroom is insane! Especially so in this neighborhood where a lot of the
buildings are barely maintained and many don't have on-site laundry. I guess I
see it this way because I pay way less for my very large 2 bedroom apt while my
upstairs neighbor who moved in six months after me, pays about 800 dollars more
and their apartment was never fixed up after the previous tenant moved out.
7. 1800 for a 3
bedroom in a poorly maintained building.
8. $1260, 1br,
decent building, responsive super.
increase over last year's $1149
increase over last year's $1149
9. $1750, large
2 bed, decent (not amazing) building with dysfunctional building laundry room.
Lenox and Flatbush. Suspect many other tenants pay far less, and our place was
certainly not renovated (much less cleaned) before we moved in. We got far more
space for our dollar here than anything in the other "edge" nabes,
like northern Sunset Park, Kensington, 4th ave "slope" stuff, etc.
10. Ground
floor 1br of townhouse on Fenimore Flatbush/bedford, $1500 w/shared backyard
and laundry. Parlor apt and top floor apt (2brs) $1800 each. (stove
gas/electric/internet extra.) A good deal compared to what else was available.
11. Large 2
bdrm (about 920 sq ft), was gut renovated when we moved in 3 years ago, all new
appliances, live-in super, pretty well maintained elevator building, laundry,
Winthrop btwn Flatbush + Bedford, $1620.
12. Moved to Parkside between Rogers and Bedford in December. 1 br for $1200 in a quiet elevator building with a friendly live-in super. Gut-renovated before moving in, new appliances and new hardwood flooring. No laundry but large laundromat right around the corner. The apartment has an inexplicably long hallway entrance (seriously almost 40 ft) and makes the place feel bizarrely spacious.
13. i moved into a studio apt, in a well-maintained, rent-stabilized elevator building, in 2009... at that time i paid $1000 for it... in 2011 i got the rent lowered to $950 (just by asking / being a quiet, responsible tentant)... last year the rent went up to $980, as per the 6% allowed increase.
14. Currently in a 2BR for $1800 at Ocean and Parkside. Newly renovated, great building, live-in super and laundry in building. LL raised the rent to $1890 and we are moving out. After searching high and low (Ditmas, Crown Hts, PLG, Kensington, Bed Stuy, Bay Ridge) I found a large 1 BR around the corner on Woodruff for $1500. More than I wanted to pay, but no fee and laundry in building, so it balances out. Plus I'm still around the corner from the subway and the park.
15. Large 2BR on Fenimore St (between Bedford & Flatbush) $1600. When we moved in almost 6 years ago our rent was $1300 and everything was newly renovated with all new appliances. Elevator building with on-site laundry and super. Can't think of a single complaint about my building.
16. A rent-stabilized, fully renovated (including new doors and floors) 1 bedroom for $1250 on Lenox and Bedford with a live-in super (who has been really helpful and responsive as we settle in). Unfortunately, it seems the building has a history of bedbugs so we hope caulking the baseboards and vigilance will keep them at bay. We moved because rent increased on our place at East 17th St and Ave H. That was also a 1 bedroom but it had a dishwasher, was slightly larger but not newly renovated by a long shot. The management company was asking for $1500 with another increase coming in July.
12. Moved to Parkside between Rogers and Bedford in December. 1 br for $1200 in a quiet elevator building with a friendly live-in super. Gut-renovated before moving in, new appliances and new hardwood flooring. No laundry but large laundromat right around the corner. The apartment has an inexplicably long hallway entrance (seriously almost 40 ft) and makes the place feel bizarrely spacious.
13. i moved into a studio apt, in a well-maintained, rent-stabilized elevator building, in 2009... at that time i paid $1000 for it... in 2011 i got the rent lowered to $950 (just by asking / being a quiet, responsible tentant)... last year the rent went up to $980, as per the 6% allowed increase.
14. Currently in a 2BR for $1800 at Ocean and Parkside. Newly renovated, great building, live-in super and laundry in building. LL raised the rent to $1890 and we are moving out. After searching high and low (Ditmas, Crown Hts, PLG, Kensington, Bed Stuy, Bay Ridge) I found a large 1 BR around the corner on Woodruff for $1500. More than I wanted to pay, but no fee and laundry in building, so it balances out. Plus I'm still around the corner from the subway and the park.
15. Large 2BR on Fenimore St (between Bedford & Flatbush) $1600. When we moved in almost 6 years ago our rent was $1300 and everything was newly renovated with all new appliances. Elevator building with on-site laundry and super. Can't think of a single complaint about my building.
16. A rent-stabilized, fully renovated (including new doors and floors) 1 bedroom for $1250 on Lenox and Bedford with a live-in super (who has been really helpful and responsive as we settle in). Unfortunately, it seems the building has a history of bedbugs so we hope caulking the baseboards and vigilance will keep them at bay. We moved because rent increased on our place at East 17th St and Ave H. That was also a 1 bedroom but it had a dishwasher, was slightly larger but not newly renovated by a long shot. The management company was asking for $1500 with another increase coming in July.
87 comments:
Great post! This will give renters a pretty good idea of how much apartments at certain areas range. Evidently, rental rates differ depending on an apartment's location as city apartments are more expensive than those in suburban areas.
i moved into a studio apt, in a well-maintained, rent-stabilized elevator building, in 2009... at that time i paid $1000 for it... in 2011 i got the rent lowered to $950 (just by asking / being a quiet, responsible tentant)... last year the rent went up to $980, as per the 6% allowed increase.
Currently in a 2BR for $1800 at Ocean and Parkside. Newly renovated, great building, live-in super and laundry in building. LL raised the rent to $1890 and we are moving out.
After searching high and low (Ditmas, Crown Hts, PLG, Kensington, Bed Stuy, Bay Ridge) I found a large 1 BR around the corner on Woodruff for $1500. More than I wanted to pay, but no fee and laundry in building, so it balances out. Plus I'm still around the corner from the subway and the park.
Large 2BR on Fenimore St (between Bedford & Flatbush) $1600. When we moved in almost 6 years ago our rent was $1300 and everything was newly renovated with all new appliances. Elevator building with on-site laundry and super. Can't think of a single complaint about my building.
Definitely helps to know what others are paying so you don't overpay. But as for trying to judge whether landlords or brokers are inflating rents too much - if they find somebody to pay it then it seems they aren't asking too much. Just because somebody owns property in PLG doesn't mean they're obligated to keep rents low. And people come to this neighborhood after they've been priced out of other neighborhoods. We love PLG but that's the honest truth. So because rents going sky high in Park Slope mean rents go up in alternative neighborhoods really you may as well complain about what landlords are doing in the Slope as well. Not just here.
My concern isn't really price...it's that some greedy scumbags are charging market rents for crappy service and poorly maintained apartment buildings. In a building next to me, for instance, I've seen a steady stream of renters move in, then move right out. Would have been helpful to know some basic stuff beforehand. It really helps to ask around in the building if you can get up the guts to ask some tenants before signing a lease.
I'd love to hear any complaints, too, in the comments. And if it's a specific building, perhaps you could share the exact address. If you have a rave about a building, might be nice to know the address for those too.
And due to rent stabilization laws, which affect the vast majority of apartment buildings in PLG (over six units, built before 1976), landlords can only raise the rent so much. Park Slope has far fewer rent stabilized apartments left, as most are either in brownstones with under 6 units or have passed the destabilization cap (now $2500, was $2000 until last year).
Warto poczytać wpisy na Twoim blogu :)
Here's a question: I have to move out of my co-op studio on Clarkson between Flatbush & Bedford and am looking to rent it out. 535 sq ft living room/bedroom, separate office, separate eat-in kitchen and 4 large closets. High floor, stainless steel kitchen. Laundry in bldg. How much should I ask? I rarely see studios advertised so am not sure.
If it weren't for the existence of Rent Stabilization, everyone's rent would drop.
How much? Hard to say. But, for example, a close friend of mine pays $1,150 for a two-bedroom rent-stabilized unit in Manhattan on 3rd Ave and 29th St. The same unit at market rate -- in the same building -- is now renting for $4,500.
Unless extreme circumstances force you out of a super-cheap rent-stabilized unit, you're not leaving.
Getting married/living together probably won't force you out. But having kids will. That's what led to my departure from my 6th-floor, one-bedroom, rent-stabilized, walk-up unit on E 82nd St in Manhattan.
Rent when I left? $400 a month. The lease began in 1975.
Without rent stabilization, apartment construction would accelerate. But as long as those paying high rents are subsidizing those paying low rents -- a situation that involves One Million apartments in NY City, there's no chance for balance and fairness.
@owner: Owner of what? Stock in the Tea Party?
Another question for "owner":
how exactly would apartment construction accelerate without rent stabilization? New apartments are not subject to rent stabilization (unless the developer voluntary takes certain tax benefits from the City). So one could argue that rent stabilization increases the rents for unregulated market rate apartments and in that respect is an incentive, not a disincentive, for builders.
btw, I'm also an owner.
Q, thanks!
I wish this had been around when I started my search back in August. Hope that my initial itch is helpful to others.
When I first started out we saw an apartment at 150 Lefferts that was asking for 1800 for a one bedroom. Granted it was a fully renovated apartment that just was begging for it. Kinda glad the jerks over at Rapid Realty never submitted my application (they said someone else beat me to it) because luck would have it I would find something at 75 Hawthorne which so far has been decent. We have a two bedroom with a spacious hall that serves as a dinning room. This all for $1800. Laundry in the building and a new super that so far has been very responsive.
Now I am happy to pay this price considering what rents are elsewhere but I also feel that its at times an inflated rate considering that the neighborhood doesnt call for it. As I said in my earlier post, the building is rent stabilized but management never provided us with anything short of the lease. They technically need to provide renters with additional paperwork in this case. I think someone had responded with a very elaborate breakdown of how rent increases are applied but I still do not believe that they have been adjusted correctly as I know for a fact that minor renovations have been done to the apartment (I happened to view it a day after the previous renter left). No major changes save for a coat of paint and new kitchen cabinets and a stove and refrigerator. In any case, the renovation costs do not nearly match the increase from $930 to $1800 even once you factor in MCI and all else. Will look into my case and happy to report back on where I land.
Having studied urban justice and all that jazz and being very sensitive to my own pockets I suspected all along that the rent was a bit high but had no proof until I contacted the city. I intend on following up with my management company to find out what the costs were for MCI and see if the increase is justified. I strongly urge others to look into this issue as it will impact the rents of our neighborhood if we do not pay attention. Next it will be us who are priced out of the neighborhood.
anonymous -- if political organizations were to issue stock, you'd do better investing in a security issued by the Democrat Party, the party that transfers revenue from profitable enterprises to vast money-losers, like the Department of Housing and Urban Development.
As to why ending Rent Stabilization would spur housing construction -- it's pretty simple.
Rent Stabilization gives renters the same protections that property owners enjoy, but it gives those rights and protections without imposing the same responsibilities, which means they can stay put forever even if the building owner sells the property.
They're a permanent liability and an obstacle to new construction.
In other words, it's extremely difficult to acquire an old tenement-style building on choice real estate if the plan is to knock it down and replace it with a large high-rise.
Therefore, lots and lots of extraordinarily valuable land remains out of the hands of developers because rent-stabilized tenants can't be forced out. If it were possible to find equivalent properties at similar rents in like neighborhoods, people would move readily.
But even if landlords offer to buy them out of their leases they can't replace what they're giving up, so they don't/won't move.
It would have been impossible for me to find a two-bedroom place at a rent not too far above the $400-a-month I wa paying for a one-bedroom place on the Upper East Side. But it didn't matter because my wife was pregnant and we decided it was time to buy a house, so we came to Brooklyn and bought one with the money we saved living in a cheap apartment.
On the other hand, even though Daniel Goldstein was a co-op owner, it took $3 million to pry him out of his place to make way for the Barclays Center.
Something tells me he got tired of his wife slapping him silly over his refusal to take the money and run. When Ratner put $3 million on the table, even Goldstein realized he would have to commit himself if he were to say "no". So he scooped up the dough and bought a house in Park Slope.
No comments on owner's completely offensive, ignorant, and fascist remarks because I have better things to do with my time than to spar with Republicans. This is for To Rent or Not: You did know that 150 Lefferts is on Bill De Blasio's list of the 100 Worst Buildings in NYC, did you not? Glad you didn't move there! Oh, and Rapid Realty are total crooks BTW.
Jeez, Babs, speak for yourself (again as always) not for all of we Democrats. You're sounding like you're making a total knee-jerk reaction to Owner being a Republican and having different views. I only saw different fiscal viewpoints in his comments, not racism. And I myself like to hear those opposing views. Because you know what, other cities in the USA do not have the rent stabilization laws NYC does. Maybe let's ask why and ponder that. It's worth doing. And let's not do the exact same thing we criticize Republicans for doing to us. Cuz that's called hypocrisy. Signed, not the Owner if you're going to claim I am that person.
Tag team Babs. I'll spar.
Owner, you state:
"It would have been impossible for me to find a two-bedroom place at a rent not too far above the $400-a-month I wa paying for a one-bedroom place on the Upper East Side. But it didn't matter because my wife was pregnant and we decided it was time to buy a house, so we came to Brooklyn and bought one with the money we saved living in a cheap apartment."
From my reading of that statement, I could conclude that the rent-stabilization system bought you a house. In other words, the state-of-affairs that you find so problematic has benefited you tremendously. Congratulations on your good fortune!
No one would argue that the rent-stabilization laws are perfect. And they benefit too few, perhaps as you say to the detriment of those who would love to have the same protections. Perhaps one day, though, you'll get your wish, and rent-regulation will disappear and rents will come down...for a little while. If NYC continues to be a desirable place to live, the market will rebound on the strength of newcomers. It will become harder and harder for people of limited means to live here. Which is not a problem of course...unless you are a person of limited means, who, say, also works here and sends your kids to school here and pays taxes here and perhaps was born here and has all your family here and maybe even works for one of the wealthy people living in those luxury apartments that were built on the land of old rent-stabilized buildings, and maybe you're even in the service industry taking care of the needs of that very wealthy class, maybe rearing their children and living off their good will and charity while constantly moving to find rents that can be afforded as the forward march of the market pushes them farther and farther away from town. Not to put too fine a point on it, but it starts to sound a bit like the Middle Ages under Feudalism.
If you think that scenario sounds far-fetched, I suggest you study other places where just these sorts of market forces have been allowed to flourish unchecked - particularly in places of limited square footage, not unlike Manhattan or NYC generally. Martha's Vineyard and the Hamptons would be places to look at. Locals, those doing all the work to provide for the leisure of the rich, can't find homes or even small apartments they can afford, leading them to travel great distances to work in a place that was always THEIR home.
So it might sound nice, this "fairness" of the market. But it's total bull. The market cares not about your circumstances; it cares only for its growth and fluidity. As a species, we're better than that, and that's why we temper the worst excesses of capitalism.
Again, congrats on the home purchased with the higher rents many of us paid for years. You're welcome!
You're totally correct there - I had forgotten that there used to be good Republicans, and I hereby apologize to them. And as a counter to the canard that rent stabilization causes higher rents for non-stabilized properties, take a look at three very specific NYC neighborhoods: TriBeCa, the Financial District, and DUMBO - all with very little rent-stabilized housing (if any), and all among the most expensive neighborhoods in the city. Owners of rent stabilized buildings knew very well what they were buying and I have zero sympathy for those who complain. On the other hand, I know several owners of rent-stabilized buildings who take good care of their properties and their tenants, and are quite satisfied with the returns they're getting - and the owners of many of the buildings here in PLG are, unfortunately, not among them (although a few are, thankfully).
And Dan Goldstein had no choice to do what he had to do - the Rat had used eminent domain to take his property from him, as NY State agreed to do so. Had he not settled with the Rat he would, quite literally, have been homeless and compensated far below the actual market value of his condo.
All of which, of course, has NOTHING to do with what we're talking about here, which is what apartments rent for in the neighborhood.
I agree the attack on owner is unnecessary. I don't agree that rent stabilization alone is responsible for the high prices in NYC but it is a factor in limiting the ability of developers to build along with the overuse of landmarking and the over-regulation of the building industry.
There is a great book by Edward Glaeser (a Harvard economist) called The Triumph of the City that I suggest all interested in this topic take a look at. He is the opposite of a member of the Tea Party. The book demonstrate that that growing cities in the US (almost all in the sunbelt) are growing and also keeping housing affordable (with much greater demand than NYC) because they do not regulate what can be built. Housing stock in NY does not keep up with demand because it is too expensive to build and when you do build you have to make it luxury in order to make it profitable.
What NYC had been doing for 50 years is not working. We would all benefit by at least hearing some different solutions rather than belittling anyone who has a different idea.
With respect to "owner's" points that: " it's extremely difficult to acquire an old tenement-style building on choice real estate if the plan is to knock it down and replace it with a large high-rise. ... Therefore, lots and lots of extraordinarily valuable land remains out of the hands of developers because rent-stabilized tenants can't be forced out." .. that is a bogus argument. For one, there are few if any examples of buildings that are purely rent-stabilized at low rents--because units get rented at market rate on vacancy, these old tenements have a mix of market-rate units and below-market units. For that reason, rent-stabilized tenement buildings are selling for $500,000 per unit in Manhattan. And at those prices, they are usually more valuable as occupied apartment buildings than they are as vacant development sites, particularly when zoning limits what you could build in their place. A developer is not going to knock down an existing building worth $500 per s.f. to have a development site worth $300 per s.f.
There are plenty of buildable development sites in the city-- including Manhattan-- and rent-stabilized tenants are not the reason there is not more construction.
I'm late to the party here but wanted to chime in. We just moved to the neighborhood this month. A rent-stabilized, fully renovated (including new doors and floors) 1 bedroom for $1250 on Lenox and Bedford with a live-in super (who has been really helpful and responsive as we settle in). Unfortunately, it seems the building has a history of bedbugs so we hope caulking the baseboards and vigilance will keep them at bay.
We moved because rent increased on our place at East 17th St and Ave H. That was also a 1 bedroom but it had a dishwasher, was slightly larger but not newly renovated by a long shot. The management company was asking for $1500 with another increase coming in July.
JDB: Agreed that we should be able to discuss without vitriol. Well said.
I haven't read Glaeser, but it sounds like my kind of wonky fun. The affordable housing crisis is broad, though. It's not accurate to say that desirable southern Cities have plenty of affordable housing. Google affordable housing and just about any City you'd consider living in, and you'll see that it's tough out there. It's a crisis from sea to shining sea. Sometimes Cities get into the business of building affordable housing, and win praise for doing so. But that's exactly the sort of governmental "handouts" that argue against going purely market for housing. And if by affordable you mean houses out in the boonies where no one wants to live, okay, sure. Or if by affordable you mean housing in towns with no jobs, okay, sure. And if by affordable you mean towns where no one wants to live...okay, sure.
Will read that book and let you know what I think. I know he argues for taller and more densely packed Cities as a solution to sprawl and its negative effects on the environment. But still, you need to have affordable places to live in that highly vertical City. Who's going to build them without support from the government? Whether you subsidize through tax incentives, favorable mortgage backing, or direct support to renter/buyers, it's all the same. Developers look to maximize profits and so they should. But no one's building affordable housing out of the goodness of their heart. Except maybe Jimmy Carter...
@Anon 9:42. Nice of you to jump to Owner's defense, presumably for the sake of promoting civil discourse. But you taint your creds by accusing Babs of having introducing racism into the discussion because she never did. Instead, she characterized Owner's comments as "offensive, ignorant and fascist." So far, the only person who has introduced race into this chat -- which was supposed to be all about rental rates in PLG -- is you.
anonymous said my claim that rent-stabilized renters can't be forced out as the reason for high rental rates is bogus.
Really? All it takes is ONE rent stabilized tenant in a building to stand in the way of knocking it down and building something bigger.
There were very few people clogging up the works at the Barclays Center site. But due to their rights, each holdout was paid a little more than the previous to move.
No Goldstein was not forced out by Eminent Domain. If that had been the case, he'd have been gone long before Ratner ponied up $3 million.
And, for those of you who don't know the history of the Ft Greene area around Long Island University -- about 1951 Robert Moses ordered the removal of all the slums that were there. Which was the entire neighbrborhood where those tall apartment buildings near Brooklyn Hospital now stand.
Title I slum clearance, and back then no one got a pot of money to make the move easier.
As for my political leanings, I'm a registered Democrat.
As JDB says, rent stablization is a key to the high rental rates in NY City. An additional factor, at least in Manhattan, is a severe shortage of land.
But even that's not the barrier you might suppose, because it's getting easier and easier to build up. Real estate has gone vertical in NYC, but due to the difficulties of assembling a large enough piece of property on which to erect a tall building, the available parcels command huge prices.
Then land limitations are increased by giving a neighborhood Historic Landmark status.
There will be no new huge tall buildings in Greenwich Village. The East Village is giving way. But demand for space still outstrips supply.
If you want to make supply meet demand, then start demanding the conversion of Floyd Bennett Field into Floyd Bennett City. It's huge and empty.
Of course it's now controlled by the National Park System -- a big blunder made in 1977 -- so the chances of seeing it returned to NY City control are slim.
Anyway, the economics of rent stablization are simple. They cause a large percentage of property to stay off the market while generating sub-par returns until the occupants die or can no longer squeeze a family into too little space.
But too many rent stabilized tenants add their kids or friends to the leases, which tacks another generation of beneficiaries onto the bill for those without the special deal.
Apartment buildings sell for a figure based on the total rent roll. And you can be sure that building buyers look at the ages of the rent-stabilized occupants to judge whether they're likely to hang on till they die or move due to the arrival of kids.
Moreover, those who pay the big big rents are also helping to subsidize the discounts given to the Mitchell Lama buildings and other large buildings under government control.
What's the rent in the project housing in the area?
"What's the rent in the project housing in the area?"
In PLG {excuse me, Lefferts] proper? There isn't any.
Dan Goldstein settled with Ratner after the state approved the taking of his apartment via eminent domain and his ownership was transferred to the ESDC. Had eminent domain not been allowed, he wouldn't have settled, nor would several others (stabilized renters) who were also forced out. The meanness of people implying that those living in housing projects (of which there are none in PLG) or rent stabilized apartments are somehow ripping off the rest of us is appalling and depressing, but unfortunately so typical of far too many people in this country today.
And as I said, I work with a number of landlords who are quite happy with the returns they are getting on their stabilized properties, perhaps because they bought them with the goal of being fair and decent, not in hopes of driving people from their homes in hopes of making a quick buck.
And there are several NYCHA buildings in the neighborhood although they don't resemble housing projects at all - they are a row of three or four low rise buildings on the south side of Lefferts Ave between Nostrand and New York. They're clean, well-maintained and probably house no more than 12 families total. They're in much nicer shape than many of the rental buildings in the neighborhood.
Bob- Actually, there is a micro-sized public housing project on Lefferts just east of Nostrand that looks like 2-family homes. It is in fact public housing run by NYCHA. But as for what our friend "owner" refers to as project housing, the closest one is probably Albany Houses on the other side of Eastern Parkway in Crown Heights.
Man oh man is this a big issue. The search for reasonably priced places to rent and buy in NYC and environs is the heartbeat of the New York hustle. Many folks, upon realizing the uphill battle, simply split for less expensive places. There's always a trade-off of course. I mean, people moan about how we don't have a decent classy restaurant around here, but within a five minute train or bus ride there are literally dozens of diverse and tasty options, plenty that will bust your wallet if you so choose, and some which will blow your mind, all for an all-you-can-eat metrocard swipe. Every great band comes through town. You could choke on the amount of great theater, dance, art, events – many of them free. The museums are outstanding. The parks are fantastic, even the schools keep getting better (I'm just not buying the schools are bad in NYC rap - everyone I know who's gone public loves their school. I'm not kidding, ask around. It was a bitch to get in, maybe, but eventually it seems to work out).
to be continued...
continued from previous comment: You simply can't take NYC with you wherever you go – I’d as soon poop in my shoes as live in Dallas. And I'm not bragging about "new Brooklyn" or whatever zeitgeist stuff is in the papers. REAL New York is ever-changing, ever-reinventing, ever-awakening, ever pulsing with political and intellectual and immigrantial vitality. It's why I always wanted to live here, why I love it so, and why I want to stay. But yeah, it’s infuriating too. So we keep agonizing, looking, praying, bargaining, begging parents and friends for downpayments, looking for an angle, seeking neighborhoods "on the cusp." And yet, that TOO is part of NYC. The gentrification question always leaves out the fact that the gentrifier too was often "priced out" and may be again. I've been priced out half a dozen times, and while it never felt good, it was the price of admission to living in a desirable City. And yet, once we find a home, a neighborhood we want to live in, we want some assurance that we can stay. That's what rent control cum rent stabilization was all about, but in my opinion it didn't go far enough and the rules were never enforced properly. Now the state is pulling it apart piece by piece, and a lot of folks are running scared. First Section 8 gets eviscerated, then Advantage, and Stabilization...it’s really scary. Maybe “owner” is right and we’d all be better without state regulations. But rather than taking away rent stabilization from the lucky few, what about expanding it? What if EVERY apartment in the City under, say, $3,000 a month, could have rents raised no more than slightly more than inflation plus costs, so that landlords still had a modest incentive to keep up the property? Don’t tell me the landlords wouldn’t make money – they’d make exactly the same more every year that their tenants paid, plus a little “bonus” for doing the right thing. Is that socialism? Hell yeah. But only as far as rent is concerned, and that means our very homes, that most basic of human needs. What’s the big deal? Would developers stop developing? No. Because they’ll always build luxury buildings for the big bucks. As to tearing down old buildings…why encourage it so? If a developer wants to do that, they SHOULD have to buy out every rent-stabilized tenant. That’s just common decency. I can’t take your pants. I can’t take your life. Why should I be able to take your home? That’s crazy talk. If landlords were so darn poor and needy, then sell the building already to someone who can make do. Or sell it to the residents…isn’t that what coops are all about? If you can’t come up with enough money to buy people out and coax them to leave, maybe you don’t have any business building your 30-story building in the first place! I vote more, smarter, with less loopholes, not less or none. And if you don't like it, there's always the Sun Belt to move to. Good luck trying to get a good bagel or beef patty though...oh, and enjoy your touring version of Cats, the Chattanooga Philharmonic, the Atlanta Ballet and the Nashville Museum of Modern Art while you're at it.
clarkson flatbed,
You wrote:
But rather than taking away rent stabilization from the lucky few, what about expanding it? What if EVERY apartment in the City under, say, $3,000 a month, could have rents raised no more than slightly more than inflation plus costs...?
Seems you haven't been around the NY City rent stabilization game long enough to understand what happens when you restrict supply for something in high demand.
Key money and illegal sublets. You know anything about that? A black market in real estate develops. Stuyvesant Town was overrun with illegal sublets. Every landlord battles rent stabilized tenants who arbitrage their leases.
Even John Tierney of the NY Times wrote a scathing article about rent stabilization. Written probably in 1997.
In a city under rent stabilization, would development stop? You bet it would. Isn't our chronic insufficient supply of available apartments enough evidence?
If a million rent stabilized units have led to the shortage we have in NY City today, then you it's painfully obvious that expanding the program would result in a greater shortage.
Other cities that don't have rent stabilization don't have shortages of apartments. Your idea is an example of the logical error known as the Fallacy of Composition.
Anyway, you suggested that low income people live in rent stabilized apartments. Some do. But most don't. Many low-income tenants receive Section 8 subsidies. Same outcome, different tactic.
As for subsidized housing in the area -- Ebbets Field Houses. Not a project. But it is subsidized.
The average rent for studios and one-, two- and three-bedroom units ranges from $700 to $1,300. The complex was once part of the state’s Mitchell-Lama housing program...
As for a group you describe as the Lucky Few, well there are One Million Rent Stabilized units in NY City. The biggest price disparities between stabilized rents and market rents are in Manhattan, where, as I mentioned, a friend mine pays $1,175 for a unit that rents for $4,500 on the open market.
Then you've got Mia Farrow who pays something like $2,000 to live in one of the name buildings on the West Side. The Apthorp, the Dakota, not sure which. But the free market rent would be perhaps $20,000.
Believe what you want, but rent stabilization is a roadblock to the construction of more apartments at a faster rate.
Clarkson flatbed, you wrote:
As to tearing down old buildings…why encourage it so? If a developer wants to do that, they SHOULD have to buy out every rent-stabilized tenant.
Which is how it goes, except for the fact that you can't force out a tenant.
So if the tenant refuses a buyout, then the old building will remain and the supply of apartments will continue lag behind demand, which means landlords can ask high rents for the few apartments that become available.
As for where to look for cheaper apartments -- lower rents are found along Coney Island Avenue up to about Avenue H.
However, the area is charmless, but crime is very low.
babs wrote:
The meanness of people implying that those living in housing projects (of which there are none in PLG) or rent stabilized apartments are somehow ripping off the rest of us is appalling and depressing...
babs, you lack of basic financial knowledge is significant.
If one tenant pays a reduced rent, then the discount is offset by charging other tenants a higher rent.
One reason many projects are not underway is this very fact.
To get approval for many projects, there must be a set-aside of units that will be rented at low rates. Even Trump has made these deals with his buildings on the far West Side. As many as 20% of the units are rented at reduced rates.
But with construction costs where they are, and due to the fact that there are limits to what people will pay to rent an apartment, it's not possible to offer discounted apartments AND recapture the discount through higher rents on the free-market units.
Without offering the cheap units, no building permits will be issued. So, a lot of projects are cancelled.
12:02, I misread it. Apologies. But I don't see fascism in Owner's posts either so my post still stands.
Babs: Maybe. Maybe. But the rent stabilization laws haven't been rewritten, only slight modifications, since they were passed decades ago. I've heard the anecdotes about Mia Farrow, and others, before. Seems like reverse-anecdotes I used to hear about welfare queens, meant to shock, and not without some truth, but not particularly relevant to the bigger picture. It would seem that as long as NYC charges us property and income taxes, and therefore has all the financial info it needs on us all, it wouldn't be that hard to means test rent stabilization. Rather than focusing on the "building," it could be apt by apt by leaseholder - across the board and in every building in town. I'm not saying I know anything about how these things are done, but it CAN be done if there's political will.
And who says there aren't enough apartments? There's new construction going up all over town, all the time, 24-7. But most of it is unaffordable. There are tons of tax incentives and financing options for people to build affordable housing on the books, but they aren't doing it now. Why should we expect they would when we drop rent laws? Seems like an awfully risky gamble to me. And I find it very hard to believe that a few reluctant-to-sell grammas out there are holding back development in such large numbers. Everyone has their price (even Goldstein apparently). I'm just saying you gotta pay to play, so make gramma rich and you can build your hideous building already.
I like your arguments though, both you and "owner." But there are plenty of knowledgeable folks who disagree with your conclusions. Just like with health care, I'm not sure the market should be trusted with such a basic human necessity.
Housing costs and laws: another difficult issue not going to be resolved via internet chat.
But one thing is certain - Mr. Q is right that most of the Sun Belt is cheap because it's the pits. We pay a premium to be here because NYC is a great place to be.
I grew up in Dallas-Ft. Worth, and I too would rather poop in my shoes than move back.
-Paul G.
I am certainly not moving to Houston (or any other Sunbelt city) any time soon but I brought it up because despite what we think the numbers show that there is much greater demand to live in Houston than in NYC. The population of Houston and other sunbelt cities are exploding. My numbers may be off but I think the Houston population doubled since 2000, yet housing price increases have not outstripped inflation. The housing in the sunbelt cities are affordable because the cost of building is much less (some for geographic reasons) but much of it because of the limited regulations. Also, those cities do not have the maze of zoning and landmarking regs that we have in NYC.
Not everyone will like the solution but one solution is to allow a huge increase in development.
That is a much more workable solution than taking private property rights as Q suggests and limiting how much people could charge for millions of apartments. It seems that you are willing to protect a property right of a rent stabilized renter (which is a limited right) but you are not willing to protect the right of the property owner who took the risk and put out the capital to develop or buy a property.
I doubt the Houston model is right for NYC but I also doubt a massive expansion of a failing system is the right answer either.
Interesting to choose Houston. Their population grew by ~300k in the last 10 years, about the same as NYC grew. Now if you want to count "Houston" as a metro region, well then you're including sprawling exurban communities as far away as New Haven is from NYC - not an accurate comparison.
So yes, there is greater demand to live in the burbs surrounding sunbelt cities than the burbs surrounding NYC. But this discussion is not about living in the burbs, so any sunbelt comparisons are useless.
And Houston has NO zoning code - it's a bizzaro libertarian paradise where in theory you can build a strip club right next to a church or a factory in the middle of a residential neighborhood. [I actually kind of loved this looniness when I lived in Houston.]
-Paul G.
From today's Houston Chronicle:
The applications started pouring in at 8 a.m. on Monday, straining the server at the Houston Housing Authority and translating into tangible terms what so many already know: Thousands of Houstonians are in dire need of affordable housing.
By 3:30 p.m., more than 33,000 online applications had flooded in, each representing a family hoping for a spot on a waiting list for the Housing Choice Voucher Program. On average, the vouchers pay about $650 monthly toward the tenant's rent.
Housing authority officials expect to receive more than 125,000 applications - six times the number of slots available - by the time the application period ends at 11:59 p.m. Sunday.
Even if an applicant is lucky enough to secure one of the 20,000 berths on the waiting list, it may take up to five years before there is a chance to apply for a voucher.
But even those slim odds are worth it for people desperate for better housing. Six years have elapsed since the housing authority opened the waiting list.
"It's not unexpected to see very large numbers of people in line to apply for subsidized housing," said John Henneberger, co-director of the Austin-based Texas Low-Income Housing Information Service. "It's the single most important change they can make for their family, a chance for their kids to grow up in a safe neighborhood and go to decent schools."
Poverty increasing
The flood of applicants also reflects the increasing number of Houstonians living in poverty, said Henneberger.
A 2011 Brookings Institution study found that the number of Houston-area residents living in extremely poor neighborhoods nearly doubled over the past decade.
"There's no doubt that with the downturn in the economy, the lower-income and working poor have been disproportionately impacted," said Henneberger. "Rents have not gone down while a lot more people don't have full-time work or are out of work completely."
In fact, rents have been rising recently in the Houston market as demand increases.
According to the 2010 U.S. Census, about 220,000 Houstonians qualify for the voucher program, which provides rental assistance for low-income families. Under current guidelines, an individual applicant cannot earn more than $23,450; the income ceiling for a family of four is $33,450.
'A desperate shortage'
Houston's leaders often tout its relatively low housing costs for middle-class home-buyers, but this provides little benefit to families living in poverty.
"There's a desperate shortage of affordable housing in Houston," said Houston Housing Authority spokesman Mark Thiele. "We know a lot of our fellow Houstonians are going through difficult times."
The housing authority allocates 17,000 vouchers annually, which help about 48,000 people. More than half of those served under the voucher program are children, said Thiele.
Fewer than one in eight Texas households eligible for housing vouchers will ever get assistance, said Henneberger.
"The line for Section 8 housing," he said, "is today's equivalent of the soup lines of the Depression."
if you live in a rent stabilized building you can ask the NYS HCR agency to tell you what the legal rent is supposed to be. sometime the rent was legally raised beyond annual allowed increases because the owner made capital improvments to the bldg or the unit before you moved in, but check. it costs you nothing and you may end up with a reduced rent.
The things about "property rights" is this: yes, I can't have my property taken from me forcibly (except under eminent domain, used rarely). However, we regulate property ALL the time. You can have a store, but you can't undercut the market in pricing. You can have a corporation, but you can't engage in anti-trust. You can own a car, but you can't drive it without a valid license and insurance.
Any time your property enters into the public sphere or affects other people - when you are renting to fellow citizens, for instance - there are certain standards of behavior that one would consider fair and decent. Like not raising the rents to the point of forcing people out. And keeping up repairs and cleanliness. Reacting quickly to emergencies. Enforcing policies that make the place safe. And in the event that a major bit of upkeep is needed, passing that cost on in a fair and transparent manner. To those landlords who are actively living out their end of that social contract as well as the business contract (lease), my hat is off. But let's get real here...has that been the majority of our experiences living in rentals in NYC?
While conservative talk points claim that "the market" will fix things, it actually led us into near-depression. We're living in a gilded age of extreme opulence for a few, while the vast majority suffer their vanity. And somehow, even Democrats end up parroting the b.s. status quo arguments to do nothing, stay the course, or give even more control to all the all holy markets.
Fine, I say. Let the markets work their magic. But not to the extent that they take away people's lifetime homes or keep them from seeing a doctor or keep them from getting a decent education. And if you do take my place, through no breaking of the lease on my part, you must pay me. Because the assumption was, I believe, that if I pay my rent on time and play by the rules, I will be able to stay here.
Any landlords out there may disagree. But because they're dealing in the very stuff of life, shelter, they need to have carrots and sticks to treat other human beings with dignity. If that's not the line of work they want to be in, they can always go work for Trump and build those things.
I think we're talking about the very definition of inalienable rights, to which I believe shelter should belong along with health, private property, and clean water. It's at the intersection of a right to a home and the right to protection of property - that's where this argument lies. Basically, it's YOUR right vs. MY right, and that's why I think there should be rules set as guiding principles - better ones than we currently have, obviously. God help us if we all have to live off the good will and decency of landlords. In a City where two-thirds of households rent, it's no tiny question either.
The chief reason NY City remains plagued by Rent Stabilization is crystal clear:
There are One Million rent stabilized apartments, which means there are probably One Million Voters living in them.
On the other hand, the number of voting landlords is much, much, much smaller. Soooo, it's pretty clear who the politicians are most willing to appease, no matter how much unfairness and corruption surrounds rent stabilization.
Just think, Charlie Rangel is not only a tax cheat, he illegally acquired control of FOUR rent stabilized units in a major building on 125th st.
NYC doesn't have rent stabilization laws; look it up. Hint: check NYS, which has lots and lots of folks living in non-stabilized housing.
Hee-hee...so true. I always forget the laws apply to Utica too...though something tells me their "cap" is a lot less than $2,500.
clarkson flatbed, your understanding of the legal issues needs some adjustment.
However, we regulate property ALL the time. You can have a store, but you can't undercut the market in pricing. You can have a corporation, but you can't engage in anti-trust. You can own a car, but you can't drive it without a valid license and insurance.
You can operate a store and sell your goods and services for any price you like, but your pricing decisions have no direct connection to real estate laws.
The Dept of Justice enforces Anti-Trust laws, but it granted Major League Baseball an exemption. The point of anti-trust is this: it is to stop an entity from enjoying Monopoly Pricing Power.
But you, with your plan to regulate every apartment according to a plan of your design want to do exactly that. Microsoft was accused by the Justice Department of having Monopoly power. Why? Because prices for its software were so low that Microsoft was able to drive out competitors.
That's what rent stabilization does -- in a most perverse way. You can get all the copies of Windows you want -- at a low price. Included with your purchase of a Dell.
But you can't get those low-cost apartments because supply of available units is close to ZERO.
Who leaves a cheap rent-stabilized apartment? Almost no one. And many of those who depart turn the units over to friends or family or make a cash deal with someone who will pay up-front "key money" to get the cheap lease. Or the legal tenant sublets the place for a big premium to another party.
And NO, the Market did NOT lead the economy to a near disaster.
That was Congress, the group of nitwits who permitted the issuance of mortgages underwritten with NO DOWNPAYMENTS.
Democrats like Barney Frank led the charge to have Fannie Mae and Freddie Mac acquire mortgages of lower and lower quality, thus giving a government guarantee to mortgages extended to people who were a combination of being deadbeats and being happy to gamble with 100% borrowed money.
When you buy a house with a 0%-downpayment loan, you are, by definition, speculating in real estate.
In that case, the borrower has put nothing at risk. All is borrowed, so if the value of the real estate declines, he can walk away pretty much unscathed, while the lender gets hammered.
Owner: Many companies, Walmart for instance, have been sued for "predatory pricing." But actually none of my examples were intended to relate directly to real estate. Guess you missed the point, that regulation happens at every level of society and the marketplace, so there's no reason rents should be excepted.
In fact, you make the case for MORE regulation with your comment about how the financial crises happened.
But given the fact that we're engaged in a boring Fox News tit-for-tat, I would say only that everything you've mentioned is problematic about the laws is actually easily addressed by amending the law as it stands. That's what I'm talking about - a wholesale redesign, one that makes the Rangel and Farrow scenarios impossible, even unnecessary, because everyone already owns a rent-stabilized apartment and doesn't have to beg, borrow and steal (and offer key money) to get one. Only luxury apartments over the threshold are exempted. And they too would re-enter the system if, during a massive revaluation in the marketplace, became affordable again.
Don't think Cuomo and Silver aren't reading every word of this conversation. I'm told that Owner, Babs, JDB and Paul G. and I have been asked to write the new legislation.
Clarkson flatbed,
Something tells me you'd have a tough time presenting an example of Walmart fighting a lawsuit over "predatory pricing."
Pretty much everything in Walmart, except some food items, is sold for less than you'd pay elsewhere.
One of the great tragedies of NY City is the City Council ban keeping Walmart out.
That's just great because we all want to pay more when it's possible to pay less.
Just so you know, Walmart's buying power allows it to negotiate low prices with suppliers, deals that are better than arrangements made by smaller operations.
Meanwhile, Walmart's not in the business of losing money on product lines. If it can't negotiate a low enough price with a vendor to leave room for a profit for both the vendor and Walmart, there's not much chance you'll see Walmart selling the product at a loss.
Yeah. More regulation. That's the ticket.
How about this. Demand that ALL homebuyers cough up a 15%-20% downpayment?
If that had been the guiding rule for mortgage lending, the crisis would have been averted. But lawmakers know that idea is bad news with voters, so they were pleased as punch to go along with the alternatives suggested by the lending industry, which included insuring securitized mortgage pools with credit derivatives.
All was working until too many borrowers began to default. Then, monkey-see, monkey-do, there was a flood of defaults that overwhelmed the capacity of the derivatives to insure the mortgages.
You can't protect against a tsunami. But you can do a lot to keep the waters calm and thereby stop the tsunami from forming. But politicians don't want to take actions and pass laws that required voters to save some money before they buy a home.
Anyway, there won't be a wholesale redesign of the financial system or the real estate system in NY because way too many politicians would have to agree to way too many changes all at once. That never happens here.
i live on Flatbush and rutland 2br apt 1385 moved in almost 3 years ago.
almost 1000sqf, building decently maintained
clarkson flatbed:
With respect to your comments about Walmart, there is a response in today's Wall Street Journal from Michele Obama.
This is an excerpt from her commentary about food:
Take the example of Wal-Mart. In just the past two years, the company reports that it has cut the costs to its consumers of fruits and vegetables by $2.3 billion and reduced the amount of sugar in its products by 10%.
Wal-Mart has also opened 86 new stores in underserved communities and launched a labeling program that helps customers spot healthy items on the shelf.
And today, the company is not only seeing increased sales of fresh produce, but also building better relationships with its customers and stronger connections to the communities it serves.
But based on your comments, the City Council has done the right thing by barring Walmart from NY City. Good government? Right?
michelle obama has been deftly coercing walmart for the better part of three years, w/the notion that it alone could change the behavior of millions of people. It's incredibly shrewd. Trust me...the cult from Bentonville was not going to strike this fight against obesity tone all on its own. Michelle was brilliantly savvy to start that initiative with them. Good government? Hell yes. M.O., gotta love your m.o.!
Look it up. Walmart's been engaging in predatory pricing for decades, putting mom and pops out of business. And they've been sued up the ying yang for doing so. Their labor practices are appalling and have dragged the country back into the dark ages. We have plenty of options in NYC. In fact, our very own GEM on Flatbush can beat them silly, pricewise, on any number of items.
And the brilliance of Walmart's low prices strategy? It's all about pressuring suppliers all down the line to cut corners and screw their employees, going all the way back to China or wherever near-slave-labor can be obtained.
It's not like other big retailers are above the fray. Walmart basically invented the game, though, and for that, and the fact that New Yorkers have other options, Sam's Clan will have to settle for the other 99.9% of the world market.
Okay, I've overstayed my welcome here and had a nice time dueling with you, Owner. You're an able debater, but I've got organic hush puppies in the toaster oven singing my name. Feel free to keep digging...I'm Audi 5000.
Paul G said:
Interesting to choose Houston. Their population grew by ~300k in the last 10 years, about the same as NYC grew.
My point was not that the raw numbers were equal but that if you look at the percentage of demand for housing it is much greater in Houston than in NYC. 300K new residents for NYC is not a huge number.
Clarkson flatbed, you wrote:
Walmart's been engaging in predatory pricing for decades, putting mom and pops out of business. And they've been sued up the ying yang for doing so.
For decades Walmart has delivered goods at attractive prices. How do we know? Shoppers fill the aisles.
You can buy a large tube of Pepsodent toothpaste for 88 cents.
You can get your prescriptions filled for $4.
Yes, Walmart is named as the defendant in lawsuits -- but, if you check the records, almost all those suits have failed. No one loses a lawsuit because they sell products for too little.
Walmart, unlike China, doesn't sell stuff for less than cost to build market share. China and Japan have tried that game because they've both been willing to subsidize the industries that have pushed stuff like steel into the US market for less than its production cost.
Walmart negotiates prices with suppliers who absolutely make a decent profit on the goods they provide to Walmart. Walmart doesn't want suppliers going out of business.
The Department of Justice failed to win its suit against Microsoft and failed to win its suit against IBM.
It succeeded with its suit against ATT, which was subsequently broken up into the Regional Bell Operating Companies. You might take note that after the Bell break-up, long distance rates crumbled and the cell phone business began to emerge.
The Old Bell Monopoly had no need to give customers cheap rates and cell phones because it had the whole telephone business locked up.
Walmart doesn't even dream of having Monopoly pricing power.
Anyway, based on your arguments, you seem to favor paying more and getting less. You should be happy that gasoline is getting more expensive. And for the same reason, you should appreciate rent increases.
Heck, if the Walmart management ran real estate in NY City, you'd pay less rent, which means some small landlord would be unable to extract a painful sum from you. But, as a foe of competition on a level playing field, your sympathies would go the the landlord.
As to the Houston Chronicle article it seems like Houston is taking a very market based approach that does not limit what owner's can build or charge. I don't contend that unfettered markets are perfect or that they will simply resolve all housing issues. No problem is that simple.
Hoston's approach appears reasonable for them in that the market seems to be providing an adequate level of middle and high income housing but also intervening where there is a lack of ability to gain housing by lower income residents.
As far as property rights there is certainly a balancing that is done. The question is at what point do the restrictions become so onerous that you have limited the value of that property to such a degree that the government has committed a "takings" under the Constitution.
Just as an aside, business can undercut pricing of others as much as they want. That is the heart of competition, the problem arises only if that business is in a dominant or monopoly position such that instead of promoting competition the business uses its dominate position in the market to run others out of business.
I do disagree with the statement that there is an assumption that if you pay your rent you can stay in an apartment as long as you want. One of the trade offs with renting is that you may pay less than owning for a time but you are not guaranteed any particular rent outside of the period of your lease and a landlord may raise the rent enough that it forces you out. That's the bargain.
Q - Where does one obtain organic hush puppies?
clarkson flatbed,
On the issue of pricing and your general opposition to low prices -- how do you feel about the Park Slope Food Co-op?
It pays its workers $0.00 per hour and sells its goods to its members at prices below Walmart's wildest dreams.
The Co-op claims to have about 16,000 members -- far more than enough shoppers to support a local supermarket that pays wages to workers.
JDB -- if you live in a rent stabilized apartment and you pay your rent, it's almost impossible to be forced out.
So if you want to examine the practice of "predatory pricing" the Co-op is the place to look.
The reason the Park Slope Co-op pays most of its "workers" nothing is because they are members of the co-op and only work 2 3/4 hours every four weeks. There is a small paid staff, who are all paid more than in a traditional grocery store and receive benefits. A far cry from underpaid Wal-Mart employees, over half of whom do not receive health care benefits and qualify for Medicaid. I am very glad that Wal-Mart isn't coming to NYC any time soon!
And if you are a rent-stabilized tenant and not in default of your lease your landlord is required to offer you your choice of a one or two year renewal lease for as long as you care to stay, so owner is correct on that point. The only way to not renew a rent stabilized lease is if you need the apartment for a family member (and I've seen instances of landlords moving a family member into an apartment for a year just to get it off stabilization and then renting it out at market rents) or if the property is seized via eminent domain, which is what Ratner did with his own rent-stabilized buildings at Atlantic Yards.
babs,
That's an interesting rationalization you put to work when you compare and contrast the Park Slope Food Coop with Walmart.
Yes, I know all about the free-labor requirement for members. However, in the bigger picture of Brooklyn's economy, a business that has 16,000 customers/members who pay ultra low prices is a business that stifles would-be competitors from gaining traction.
The guy who doesn't get a paid job in a supermarket is no better off for knowing there's a "good" reason his employment opportunity doesn't exist.
You seem to think the PS Food coop is on some higher moral ground, when, in fact, its existence has kept at least one more supermarket from opeing.
The Coop is truly a job killer. But it's a small-scale job killer. Imagine if Brooklyn were dotted with copy-cat operations, perhaps even consolidating under one tax-sheltered umbrella?
As you should know, the Coop, due to its "non-profit" status, dodges taxes, which means other venues are stuck paying what the Coop doesn't pay.
Meanwhile, from your comments, I see you don't know much about Walmart. Anyway, it pays billions in taxes, wages and benefits. It also offers goods online, so if you look, you'll see Walmart.com boxes on the street on garbage pick-up days.
So, Walmart's here, but due to the genius of the city council, the store pays no property taxes and offers no paychecks to anyone in the borough.
Here's something that shouldn't be news -- more jobs are better than less jobs. When there's more jobs, there's more competition for decent workers. When there's competition for good workers, wage rise.
But the city council and most liberal law-makers prefer to kill jobs, either by attacking major employers or by stifling various industries, thereby ensuring an excess supply of workers who scramble for the few jobs available, at whatever pay is offered.
babs,
Ratner paid Goldstein $3 MILLION for a place he purchased for less than $600,000.
Imagine getting 5 times your purchase price after owning a place for only a few years. Imagine getting that deal in a dismal real estate market.
Goldstein should hang a picture of Ratner on a wall in his new Park Slope house -- a house that he bought for $800,000 -- and kiss the picture every day.
Actually, owner, as a PSFC member I know a lot about its organization, and it is NOT a non-profit corporation. NYS law is very specific - non-profit co-ops do exist, but the law is very restrictive when it comes to operating a retail business, so food co-ops are for-profit corporations for the most part. The PSFC pays taxes on its profits (which are minimal, just like those of most major corporations, including Wal-Mart, AT&T, and most banks).
Of course I would never order goods online from Wal-Mart (or Urban Outfitters or American Apparel for that matter).
And is a poorly-paid job that obliges you to go on public assistance for health insurance in any event really better than no job at all? Until the minimum wage is increased in this country I'd say probably not - that's the real reason people remain on welfare - why work when you'll be taking home less money than you would on public assistance?
And the settlement amount Dan Goldstein received was $3 million, bu he didn't get all of that money, as it was split with his counsel, and I really don't think that the trade-off of losing your home and ruining an entire neighborhood (which is what this was all about, not the money) is worth it at all.
And guess what? The Lefferts Community Food Co-op has just been incorporated (as a for-profit co-op corporation under NYS law), so we'll soon be bringing some of those low prices here (for working members only).
I don't even get any credit for pointing out that you are correct in saying that it is well-nigh impossible to get rid of a paying rent stabilized tenant (not that I have ANY sympathy for owners who complain about this, as you all knew full well what the deal was when you bought the place)? Sheesh.
And BTW there are many, many competitors in Park Slope for groceries, and they do just fine - look at Union Market, with its multiple outlets; Divine Taste; Back to the Land; Ace Market (which just underwent a massive renovation); as well as fancier places like Blue Apron and more pedestrian venues such as the multiple Associated and Key Food outlets in the neighborhood.
You seriously can't imply that the Park Slope grocery store market is restrained at all because of all those PSFC hippies - there are more than enough people in the neighborhood to support all of those other places (and I, and many other members, even shop n some of them occasionally as well).
What's your problem with the co-op? Did you get suspended for missing your shift too often? Or is it just too "socialist" for you?
babs,
The Park Slope Food Coop defines itself as a Not-for-Profit organization. From the Coop's website:
The Board of Directors -- By John Sandercock -- Attorney for the Park Slope Food Coop
The Coop is a non-stock membership cooperative governed by the Cooperative Corporation Law and the Not-for-Profit Corporation Law ("NPCL").
The procedures which it must follow are set out in its bylaws and the NPCL...
There's more, but you get the point. So, perhaps you know less about the Coop than you seem to believe.
Meanwhile, a business with a reported $35 million in annual revenue and 16,000 members/customers clearly and obviously commands a measurable portion of the food business in Brooklyn.
If the Coop didn't exist, that $35 million would find its way into the cash registers of other For-Profit enterprises that pay workers the prevailing supermarket wages.
So, it's an incontestable fact that the Coop has reduced the number of supermarket jobs by at least the number it takes to staff an average Brooklyn supermarket.
As for Walmart, you really know very little about the company. Your take on its pay and benefits is straight from militant anti-Walmart brigade, a group that's short on financial knowledge and how things work in the real world.
Meanwhile, on the other side of the coin there's the ultimate Monopoly in NY City -- the Taxi Industry.
There's about 13,000 medallion cabs in NY City. That figure is only slightly higher than the number of medallions issued in 1938 -- for $10 each.
These days, a medallion can sell for as much as $1 million. Somewhat like Rent Stabilization. Except owners of medallions are free to sell them to anyone. But virtually no new medallions are issued, even though Bloomberg has tried to get the Taxi & Limousine Commission to issue 1,000 more.
Regarding Daniel Goldstein -- oh, so it matters that he had to pay his attorney to negotiate a $3 million pay-off?
Wow. What do you think lawyers are for? So let's say Goldstein got $2.5 million after paying his attorney. Are you feeling his pain?
I suppose you can claim he "lost" his home, but the people who were whacked by Sandy would love to have lost their homes in the same manner.
And as far as ruining the neighborhood goes, well, there's a whole lotta people hitting Barclays who are loving the place. The same goes for businesses in the surrounding neighborhood.
In fact, every media venue in the city seems to have given up finding fault with it. About the only remaining crybaby is that crackpot Norman Oder.
For at least 60 years that area was one big open pit. Walter O'Malley wanted to build a new stadium for the Dodgers there, but Robert Moses said no. So the blight stayed around till Ratner made the place into something a lot of people now enjoy and one that employs a lot of people while stimulating more economic activity nearby.
By the way, everything sold by Apple and Dell is made in Asian factories where wages are low and benefits non-existent -- but in compliance with local laws.
Owner, you need to get your own blog. Whatever your real point is, you have seriously overextended yourself in trying to make it on this one.
The PSFC's NYS incorporation status is one thing; that only means that making a profit is not its goal. It is not a 501(c)3 corporation for IRS purposes and it is required to file annual tax returns.
How you equate a single member-owned cooperative that members patronize specifically because they support the cooperative movement and seek to avoid products that depend on the exploitation of others with the predatory practices of a behemoth like Walmart, whose prices derive specifically from that exploitation, is laughable and illogical.
Every media outlet in NYC, especially the NYTimes (Ratner built their new headquarters also by abusing eminent domain), has been in the Rat's pocket since the get-go, so there's no surprise in their continuing puff pieces on the dump. I only hope I live long enough to see it demolished. The Orlando arena only lasted 22 years so I may just make it.
As for your rant on taxi medallions and comparing that system to rent stabilization, all I can do is agree with Anon 5:23.
I am looking at the audited financial statements for the PSFC for FY 2009 (the most recent I have - they were shared with me when we were writing the initial business plan for the Lefferts Community Food Co-op, or LCFC).
For the year ended 2/28/09, the PSFC accrued $142K in federal and $89K in state and city income taxes, for a total of $231K in income tax expense, of which $82K was deferred, so they actually paid $149K that year.
That was on pre-tax income of $448K, for a net effective tax rate of 33.25%.
babs, you wrote:
PSFC...a single member-owned cooperative that members patronize specifically because they support the cooperative movement and seek to avoid products that depend on the exploitation of others with the predatory practices...
First, the PSFC is not "owned" by the members. Ownership confers the right to SELL or BUY the asset in question, and the price is not controlled.
Ownership also confers obligations and responsibilities, none of which are part of being a PSFC member. The only value conferred is one that is pffered as a privilege, not a right. The privilege of shopping in a venue offering low prices.
The membership is equivalent to a membership at Costco, a membership that requires each member to identify himself, which thereby cuts way down on shoplifting.
Anyway, there's that phrase about avoiding exploitation of others with predatory practices. Remarkably, that phrase seems to have no meaning when it comes to reducing the number of paid supermarket jobs in Brooklyn. In other words, exploiting people by stifling job growth among those who need the opportunity most, leaving them to seek public assistance instead.
You want the minimum wage increased, but you want to keep wages at ZERO where you shop, and you're taking the No-Wage policy further by creating another No-Wage venue in Lefferts.
If we were to extrapolate your ideas on labor and pay to the entire country, as you suggest as the goal of the cooperative movement, then no one stocking shelves at food stores would receive a dime.
How many millions of people would find themselves jobless if your idea were to catch on? How many unemployed people would need public assistance that would have to come from the pockets of profit-makers?
Meanwhile, I'd love to see the PSFC income statement, balance sheet and cash flow statement. Revenue is about $35 million. So pre-tax income of $450K works out to be about the same percentage one would find at a conventional taxable supermarket enterprise, such as Safeway, except Safeway coughs up labor costs that amount to about 25% of its revenue of $43 billion.
By the way, was the old open pit below the Barclays Center ever a scenic site? Did people ever stroll around it to enjoy its special character? I've been around Brooklyn for 30 years and had never seen people heading to the area unless they were heading to the subway, the railroad, hitting the W-burg bank building, the two malls or otherwise passing through. But now they go in droves, and even the people who live nearby are seemingly miffed because they've got nothing to complain about. Okay, teenage girls chasing Justin Bieber.
There are already thousands of cooperative grocery stores across the country but I don't think the grocery industry has anything to worry about - there are more than enough people who don't agree with cooperatives to keep them in business.
What's different in the PSFC income statement is that they have a much lower COGS, enabling them to provide a living wage and decent benefits ti their paid staff and better prices for it member-owners. How much of regular supermarket wages and benefits are actually paid to low-level employees vs. executives?
Membership in the coop is ownership - each member is required to make an investment in the coop upon joining, which is refundable if the member chooses to leave the coop. That's how ownership works in cooperative corporations, and buying and selling has nothing to do with it. Costco is an annual membership "club" not at all the same legal structure.
And if you're so curious about how the coop operates, why don't you call them and ask to meet to discuss it? Perhaps they'll even let you look at their financial statements for themselves.
babs,
Now I see you're not familiar with the legal meaning of ownership. No, ownership is not defined as paying an initiation fee and regular dues,as is often the case at health clubs, and other clubs that restrict access to members.
As I said, if you own something, you can sell -- transfer -- that status to another person or entity. At a mutually agreed upon price. As you can with a Taxi medallion -- these days, for a million bucks. But you can't create new medallions.
Not so with membership at the PSFC. It simply isn't transferable, so it isn't ownership.
Moreover, nothing suggests that if the PSFC were liquidated that members would receive a pro-rata share of the proceeds. Inasmuch as the property owned by the PSFC is worth a lot more than it was purchased for, you can be sure of members had true ownership rights, they'd take steps to cash in on that appreciated property. But, because they're not really owners, they can't.
That aside, I love these rationalizations about why it's good that the PSFC pays no wages.
You're mistaken about Cost of Goods Sold. That line entry on the Income Statement does not include labor, which is found on the Sales, General and Administrative line.
Even though you're mistaken about the accounting entry, you're arguing that having fewer paid people on the payroll is why benefits are provided to the lucky few.
So by that reasoning, which you extend with your comment about how the coop business doesn't really threaten profit-making food stores, you're hammering home the point it's better to pay as few people as possible and obtain free labor wherever and whenever possible, thereby reducing the number of no-skill, low-skill, entry-level jobs.
For decades teenager boys and young men pumped gas after school -- for minimum wage. Where did those jobs go? They disappeared when technology enabling customers to pay at the pump became cheaper than hiring a gas pumper.
Millions of jobs disappeared in a hurry. Now it's happening in supermarkets with self-checkout lanes. Self checkout probably isn't in the cards for PSFC. Why spend money on a system when there's no labor cost to offset, unless there's a big problem with the cash registers.
Moreover, McDonalds is experimenting with robot hamburger makers. So, your wish for decreasing the number of paid employees at every business is likely to be realized as the human component is reduced by technical innovations.
Babs,
Thanks for debunking this owner character. There are plenty of workers at the PSFC that get paid a living wage.
Owner's extremely narrow concept of "ownership" is getting pretty tiresome. I'm not a member of PSFC, but it seems to me that its members "own" it in the same sense that all US citizens "own"our National Parks or all NYC residents "own" Prospect Park. we can't sell those things, but so what? YThere are many things that can't be measured in dollars, even if they're of no interest to "owner" and his ilk.
Cooperative ownership does not imply the right to sell. Even in the case of cooperative apartments the board has to approve potential purchasers before they are allows to buy another's shares - and there are lots of board turndowns for various reasons. So not all forms of ownership guarantee a right to sell. End of story.
I sometimes get the feeling that overlong discussion of the Park Slope Food Coop is a variant of Godwin's Law in neighborhood blogs.
babs writes:
Cooperative ownership does not imply the right to sell.
Which is why the situation you've described isn't ownership.
Under the conditions you've identified, the so-called "owners" aren't liable for events tied to the property or asset.
They are not compensated for losses nor exposed to the usual and customary risks of ownership -- because they're not owners.
Just like depositors in mutual savings banks. Though it's said they "own" the bank, they bear no risk if management defrauds depositors and borrowers, and they receive no pro-rata share if the bank is sold.
With co-op apartments, though there is an approval process for each buyer, the buyer and seller complete their transaction at a mutually agreeable price, a key element in the definition of ownership.
Actually,co-op boards often turn down prospective buyers because they don't agree on the proposed price - this was especially true several years ago, when some owners wanted to sell for less than the members of the board thought should be accepted, so even though the buyer and the seller may agree on a price, the board still can prevent the transaction.
Loving the Godwin's Law comparison, but carrying on for the fun of it.
From the PSFC's website: "As a member of the Coop you share ownership of the Coop with 16,000+ fellow Coop members. You have a voice in the decision-making process and can participate in planning and discussions of the organization's future."
From the PSFC's audited financial statements: "The Coop is a general non-stock cooperative corporation organized under Section 3 of Cooperative Law of New York State."
As a non-stock corporation, instead of owners' equity, the Coop's balance sheet shows members' equity, consisting of members' refundable investments (refundable upon leaving the Coop), capital contributions (members' investments that have been contributed on a permanent basis to the Coop), and additional paid-in capital (member investment amounts in excess of the $100 investment that have also been permanently contributed to the Coop), and the usual retained earnings and other accumulated income (loss).
So sorry you can't seem to wrap your mind around a different concept of ownership, which is not all about the potential for monetary gain. Perhaps you'll come out to help us in our preparation of the new Lefferts Community Food Coop space on March 16 and learn more about how community cooperation can make life better for all!
babs, you wrote:
Actually,co-op boards often turn down prospective buyers because they don't agree on the proposed price - this was especially true several years ago, when some owners wanted to sell for less than the members of the board thought should be accepted...
More accurately, road-blocks arise when the sale price is low enough that it triggers problems relative to the underlying Master Mortgage, much like when sellers of houses want to sell them for less than the outstanding mortgage. Or to prevent owners from giving sweetheart deals to friends and relatives, and thereby impair the imputed value of the entire co-op.
These are conditions to which buyers have agreed when they purchased their units.
Of course, you can sell your house for less than the remaining mortgage balance if you're willing to cough up the shortfall to the lender. Otherwise, recent practice had been to block the sales, which the law allows the lender to do.
But that's now changing, and banks are allowing "short sales" to get the inventory off the books.
Meanwhile, the Department of Justice blocks sales/mergers of companies that might lead to excess concentration of pricing power.
So there many sales transactions must conform to various standards. But, when it comes to the PSFC, no member can sell a pro-rata share of the PSFC because he doesn't own a share. He only sort of rents it.
You wrote:
As a non-stock corporation, instead of owners' equity, the Coop's balance sheet shows members' equity...
Another way of saying that membership in the PSFC confers nothing financial and insulates members from risk.
If the PSFC went down in a tragic cataclysm, say, it sold a boatload of food that caused the poisoning deaths of a 100 people, the members would bear no liability -- cuz -- as the text says, they're not owners. They're only members.
Ownership confers rights and responsibilities. Membership confers almost nothing except the privilege to walk in the door and shop.
So the LCFC will get itself together and siphon off some business from other supermarkets where people are paid to work.
Tell me how the plan doesn't discriminate against people who might lose their jobs because business declines at an existing neighborhood supermarket after the LCFC opens.
Are you arguing that it will take too little business to affect nearby food venues? That nobody will notice? Is that the game? Just a little skimming? Or does this involve something about being on the moral high ground?
No, I'm not talking about banks not allowing a co-op short sale (and there are virtually none of those in any case, as most co-ops impose far more stringent financial conditions than banks ever did, which is one reason NYC weathered the recent real estate crisis so well vs other parts of the country), I am talking about co-op boards turning down prospective buyers because the agreed-upon price would ruin the comps for their apartments - this has also been true in buildings with no underlying mortgage.
And considering the paucity of grocery options in this neighborhood, I doubt many of the people interested in the LCFC spend much money here in any event. I'm looking more at the people I see every day getting off the subway with their Trader Joe's, Whole Foods, and PCFC bags - and none of the above will be hurting for business nor do they have any plans to open up here.
On the other hand, what we will provide is the opportunity for individuals of all backgrounds and from all walks in life to come together on equal footing as we work together towards a common goal - something that doesn't happen in a conventional grocery store.
babs,
There are a couple of reasons for the healthier real estate market in NY City. When it comes to co-ops, there are hurdles that must be crossed due to the existence of the underlying master mortgage. Those account for the "stringent financial conditions" you mentioned.
The other key factor is the requirement for lawyers to represent buyers and sellers. That cuts way down on bad deal-making by over-anxious buyers.
As you might note, when it comes to home equity loans, the lawyer requirement is dropped, and in NY City, it's home equity loans that caused many of the problems that have arisen.
I recently concluded the sale of a condo in a western state, and the only people involved were the buyers, the real estate agent and me.
In the past I've approached co-op sponsors in Brooklyn with offers to buy when the market was down. Guess what? They don't want to sell empty units at those times, because, as you mentioned, they don't want to impinge on the future pricing of these units. They'll endure the carrying costs because they know eventually the market will recover and the units will sell for more than the base cost at which the sponsor acquired the property.
Anyway, it looks like you're going for the combined argument of attracting customers to the LCFC -- the argument based on the high moral ground and the too-few-to-be-missed customer total.
Hugo Chavez would have approved. He too would demonize Walmart, which delivers good quality products at the best possible prices on top of paying workers while luring in the believers with some Chavismo mumbo-jumbo about linking arms and working together toward some common goal.
And yes, the owners, managers, employees and customers of conventional grocery stores do share common goals -- mainly, trying to maintain a business that serves as many people as possible by giving them the goods and services they want -- without the nutty politics and militancy.
It was a moment in head-shaking, when I read the PSFC declared, after a vote by the membership, to stop carrying Sonny & Joe's hummus, a brand I happen to like a lot.
Fortunately, such lunacy doesn't affect the marketing decisions at the store that sells me Sonny & Joe's hummus.
babs,
Something tells me that in the process of forming the LCFC, the organizers are going to want assurances they're not personally liable for any mishaps, catastrophes, injuries or bad judgment.
In other words, none of the involved parties will "own" anything, because ownership would require them to bear many responsibilities.
"Something tells me that in the process of forming the LCFC, the organizers are going to want assurances they're not personally liable for any mishaps, catastrophes, injuries or bad judgment".
And they'll very likely purchase insurance to cover those contingencies. How does that relate to the question of members being "owners"?
BTW, Owner and Babs have been talking around each other with different concepts of ownership. At the risk of over-simplifying, Owner is using a Common Law legal version of ownership and Babs is writing about ownership in the sense of members having a stake in a cooperative enterprise. They're BOTH right, but it's an apples and oranges argument which, IMO, is irrelevant to the question of "What SHOULD Your Apartment Cost?"
Thank you so much Bob - as usual, you're totally right on both counts, and I'm sorry for hijacking this thread to have some fun at owner's expense.
And owner, have you never heard of D&O liability insurance? If so I guess you don't have much experience in the corporate world either, because every corporation has it.
Oh and pray tell why the most exclusive co-ops in NYC, in buildings with NO underlying mortgage and that require 100% cash purchases will still turn down low ball offers? Nothing to do with banks and everything to do with preserving their property values. And I'm not talking about sponsor-owned units (because the underlying bank would LOVE non-sponsor-owned units but the sponsors know that in a down market they can make more by renting out the units than by selling. If they told you otherwise they were being nice. Are you talking about 80 Winthrop BTW?). Clearly your real estate experience and knowledge isn't all that either.
VERY happy to hear that you think Hugo Chavez would have approved of my points - thanks very much.
And with that I will return this thread to its regularly scheduled programming with the mention that I have a three bedroom in good condition for rent on Midwood between Nostrand and Rogers available for $1400/mo. Must make 40x one month's rent in gross income (one tax return only) and have good credit. Guarantors considered with 80x one month's rent in income. No pets. Broker's fee of 15% of a year's rent due at lease signing, along with first month's rent in advance and one month's security deposit.
There are some things to have in mind when you want to calculate the real value of the flat you are staying in. The area where it is located, the size (in squarefeet), the amount of rooms, the age and last but not least, the luminocity. When I travelled to Argentina, I was given an apartment in buenos aires that wwas perfect and cheap at the same time. Two things that never go together. I did some research and found out that the place was actually expensive for locals but the exchange rate made it cheaper for me, since I paid with dollars!
So sorry to be coming into this so late, but does anyone have any feedback on the 80 Winthrop Street building?
Considering purchasing, but can't seem to get much info.
send me a note offline and I'll hook you up. my email is in my profile. great building, great people.
I know 80 Winthrop very well also, and have sold and rented several apartments there. brogers@wbmay.com
This is one of the most important blogs that I have seen, keep it up!Anchor your Assets
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