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| Corner of Clarkson & Bedford: "courtesy" of BK to the Fullest |
One thousand, two thousand, three thousand new luxury units won't change that basic scenario.
Saturday, February 7, 2015
Here's the Real Problem
Once the smart money sniffs out your neighborhood, the writing's on the wall. Or on the blog, in the case of BK to the Fullest. This smarmy candidate for Aholes Anonymous (AA) likes to flip a lot of jargon around, and he makes good money feeding the feeding frenzy. I won't begrudge the guy making a buck as a consultant to the greedy landlord and the desperate-for-a-house homebuyer. But still, sometimes when you read the description like this it makes you get what's under the hood, and why there's so much distrust and anger out there right now. To some folks, these are clearly not "homes," and the fact that people have lived in buildings like this for decades means absolutely zilch. Not to mention, the buzzard-like language about the rent laws. Remarkable. Morally unhinged.
If you're late to the conversation, I would sum it up thusly. Buildings with rent stabilized apartments - of which there are literally thousands in the area - are no longer being priced as if the legal stabilized rent were the future income. The "market" should have nothing to do with it, according to the law. Very few of these buildings would reach the $2,500 cap in the next few years without help from greed. You must buy-out or remove tenants or do shoddy renovations, bumping up the rent each time, to get to the true market rate. At which point, this neighborhood becomes truly unaffordable to folks at current median income and below. THEN the buildings are worth the current prices they're commanding. It's all math.
One thousand, two thousand, three thousand new luxury units won't change that basic scenario.
One thousand, two thousand, three thousand new luxury units won't change that basic scenario.
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8 comments:
I can't stand that smarmy guy. He completely flouts the law, essentially acting as a broker without the qualifications or legal strictures (i.e., pocket listings are illegal, Fair Housing regulations, etc.). I know several people who've been taken in by his "Platinum Member" shtick and shelled out several thousand dollars for his "counsel" in property history, bidding strategies, etc. for nothing - a good, qualified real estate agent or broker gives you that for free, without the overlay of moral turpitude.
And I see an old friend (not) in the comments section. No surprises there, either.
It seems hatred for bad landlords, speculators, rich people, developers, "gentrifiers", or any home buyer that is looking to purchase a property with upside (sooo... every buyer), are all grouped into a one big evil cohort. What's up with this? BK to the Fullest very well could be a a**hole. But there is nothing wrong with real estate speculation. And there is nothing wrong with pushing all the other controversial stuff aside to simply evaluate the trends. Property values in Lefferts are skyrocketing. Yet STILL, not even close to the $/sqft of any other neighborhood bordering a park. So, how can you blame them for seeing green and doing what they can to better their personal positions. How can you expect them to ignore lucrative opportunities? Mistreating tenants to get them out is a crime. Wanting to buy low and sell high is not.
Also, here is something I am finally starting the "experts" talk about. NYC population growth rate is unlike anything the city has seen in the past 50 years. People are not leaving. And herds are coming. Furthermore, the largest generation to date (Gen Y/Millennials) are entering adulthood and buying up property like nuts. They also have a tendency to want city access but avoid city central. In other words, they prefer the outer boroughs rather than union square. This was not the case with previous generations. So, we have more people moving here, inventory is extremely low, and many prefer neighborhoods outside manhattan. Until these trends slowdown, we can only expect the sprawl of development to continue.
http://observer.com/2014/05/new-york-city-population-growth-continues-incredible-boom/
http://www.nytimes.com/2014/03/27/nyregion/population-growth-in-new-york-city-is-reversing-decades-old-trend-estimates-show.html
RENT STABILIZATION vs RENT SPECULATION. Nicely done, Jamesy. You articulated the problem.
There's nothing illegal about taking advantage of an "upside" scenario. But as my Midwestern mentor "the Coug" put it "callin' it your job ol' hoss, sure don't make it right. but if you want me to i'll say a prayer for your sole tonight."
I don't argue with your second comment, though I would caution that everytime we hear about "the new normal" there's typically something NOT normal taking place.
However, your first comment points to what happens when rent stabilization comes up against rent speculation. It's not at all surprising that real estate speculators would get smart and try to profit from porous rent regulations. A morally ambiguous individual might even convince themselves that they're helping things somehow. BUT if you're buying property with outsized rent increases built-in, how is that not gaming the system and thereby gaming the system meant to keep working people in their homes?
I make a HUGE distinction between an individual buying a home for themselves and their family and a speculator buying a property that already has rightful tenants. If you don't see the difference, then I would ask you to at least consider it, because that's where the heart of the argument lies.
As a culture, I would argue, we seem to have decided that if something is technically legal then it's okay. I think it should work the other way around. It's NOT okay to do something that's profoundly disruptive to the Constitutional guarantees of life, liberty and pursuit of happiness. In fact, we should organize to MAKE it illegal.
And, actually, it is NOT technically legal to do everything within your power to force/scare out decent, rent paying tenants who have done nothing wrong other than to be paying less money for their apartments than you might like to get. Rent stabilization IS the law and thus very technically legal so live with it and don't buy things thinking of how you'll get so rich after you get rid of all the poor people.
Q - completely understand the distinction. By no means was I implying the two are the same (individual home buyer vs a larger full building transaction). And nor was my comment about the big evil cohort implying you/your blog group everyone together. Im very clear on your position. It was more of an observation of all things new to a "developing" neighborhood (individuals, investors, new bars, coffee shops, etc) are branded the scarlet letter G. Honest question for you... remember from 'ol Poly Sci 101, where gentrification was actually called economic development? At what point does economic development turn into the ugly G word? As a state, city or community representative, a top agenda item for you is economic development. This holds true for every single representative across America. But at what point do you transform from ambitous growth oriented community leader to evil agent of "gentification"? This is an honest question. I cannot figure it out. Does it simply come down to tenant rights?
Of course babs is right re what is or isn't legal, which I'm sure will elicit a shrug of utter indifference from slumlords all over the city. They know there is virtually nothing they can do that will have any consequences beyond the city asking them nicely to "Please, stop."
Even Joel Israel, the total scuzz who hired thugs to literally smash to pieces the kitchens and bathrooms of his tenants; is he in jail? is he under indictment? has he been charged with ANYTHING? No, he's simply been barred from one of his buildings and an outside manager has been appointed to oversee repairs...
http://www.brownstoner.com/blog/2015/02/closing-bell-admin-takes-over-building-from-landlord-who-allegedly-destroyed-it/
Until we see a few of these slumlords perp-walked in handcuffs, expect more of the same.
It can happen, although I agree it should occur more often perhaps: http://www.nydailynews.com/new-york/brooklyn/city-worst-slumlords-tossed-slammer-article-1.1838226
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