New York Rent Control - Is Cuomo Really This Dumb?

New York Rent Control - Is Cuomo Really This Dumb?

Rental Property Investor · Albany, NY · Member since 2019 · 33 posts · 33 votes

Not sure how many of you all have seen in the news, but New York is going full-on-socialist with expanding "tenant protections" across the entire state.

NYC has had rent control for a while, from my understanding. But now they're expanding these laws to include upstate (Albany, Buffalo, Rochester, etc.), as if upstate NY cities didn't already have enough economic issues.

From the NY Post:

"The current rules allowed landlords to increase rents by 6% a year to pay for major building-wide improvements or unit rehabs. The omnibus rent bill cuts that down to 2%."

… So disincentivize landlords from making improvements to their buildings. Can anyone explain to me how this makes any economic sense? It's like they want building-owners to be slumlords!! I can't believe it!

From the local paper here in Albany, the Times Union:

"The laws require landlords to give tenants several months notice before an eviction for non-payment, and enable judges to "stay" an eviction up to a year if it will cause "hardship," such as adversely affecting the tenant's childcare arrangements or health."

If someone can explain to me how this benefits anybody in the long-run, tenants or landlords, I'd love to hear it. 

Saw a great quote from a local Albany developer in the newspaper - something along the lines of "The real estate won't move, but my money can." That about sums it up!

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Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y

No surprise ..Sounds like your typical insane liberal policies that kill business 

See this reply in the discussion

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  • Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y

    Those are for RC & RS buildings. Not for free market buildings. 

    NYC is 65-70% renters. Renters are voters too. They don't give a crap about rich building owners. 

    I've lived and worked in this market. 

    There are two sides to every story. While this is absolutely stupid, landlords ****ed it up for themselves. Guys like Croman did every crooked, immoral, and horrendous **** you could think of to kick people out of RC/RS. Large companies billed incorrectly and overcharged for years.  ETC ETC. 

    It's not just tenants in the wrong here. Greedy scumbag landlords have been ****ing it up for the rest of us for a long long time. 

  • Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @William Coet:

    New York State has 6% property tax in many communities.  That's $500/month going to property tax on a home assessed at $100,000.  Add mortgage, insurance, maintenance, vacancy, and several months to handle an eviction, and single family home rentals can be nearly impossible.  Single family home purchases can too!

     
    NYC has one of the lowest property taxes on residential. NYC property tax has never been a real issue. 

    Also no big market has SFR's that make financial sense when you look at cash flow. But add in your appreciation and debt pay down numbers and it looks a whole lot better than almost any other place in America besides SF.

  • Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @Pat L.:

    & then you have these idiots....

    Los Angeles should penalize landlords who keep homes vacant as the city suffers a housing and homelessness crisis, several members of the Los Angeles City Council declared in a proposal unveiled Tuesday.

    City Councilmen Mike Bonin, Marqueece Harris-Dawson, Paul Koretz and David Ryuare asking city staffers to come back with options for an “empty homes penalty” or vacancy tax, which would likely have to go before voters for approval. They cited U.S. Census Bureau data estimating that as of two years ago, there were more than 100,000 vacant units across the city.

     There is already vacancy fines that can be placed on a property in many areas of the country. It's not somethinat that is super unreasonable. They are tradionally for properties that just sit vacant for long periods of time (not for a 2-3 month vacancy) and then become a blight on the neighboorhood and cause many more issues. 

    There are plenty of extremely wealthy dumb people that own very expensive real estate that have left them totally empty. I know more than a few buildings in NYC like that. Something should be done about properties that just sit for years.

  • Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Steve Vaughan:
    Originally posted by @Austin Welty:

    @Steve Vaughan interesting point...how do you avoid issues with turning away potential tenants? IE, discrimination claims, etc? I know this is a more "general landlord" question than anything in this thread, but curious to hear on your experience.

     I don't normally comment on specific criteria I have, but do ask questions that must be answered when someone responds to my for rent ad.  Notably how much do they smoke and how many animals do they have.  I also ask how soon they can/wouod like to move and 8f their commute will be long.

    No answer, no response from me. No ph#, no address.  Gather information and pre-screen as much as you can prior to meeting.

    Oregon just passed state wide rent control..  a hedge fund that owns 150 plus props in Portland about 75mil worth  just put them on the market I say 2 years to late.. in shopping this around to buyers I know that could take it down.. most have just came out up front with discount would have to be 30 to 40% off of todays market to take on that big of job with new rent control rules..  

     Same in NY, many of the big RC/RS buyers are not transacting right now. Theres just too much uncertainty. But it'll eventually come back to some version of the status quo. Too much money in the business for it not to. 

  • Lititz, PA · Member since 2013 · 595 posts · 272 votes
    7y
    Originally posted by @Syed H.:
    Originally posted by @William Coet:

    New York State has 6% property tax in many communities.  That's $500/month going to property tax on a home assessed at $100,000.  Add mortgage, insurance, maintenance, vacancy, and several months to handle an eviction, and single family home rentals can be nearly impossible.  Single family home purchases can too!

     
    NYC has one of the lowest property taxes on residential. NYC property tax has never been a real issue. 

    Also no big market has SFR's that make financial sense when you look at cash flow. But add in your appreciation and debt pay down numbers and it looks a whole lot better than almost any other place in America besides SF.

    My post was referring to NY State, not NYC

  • Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
    7y

    Since the vast majority of Voters don't have a high level knowledge of Economic concepts, they will be voting for politicians that are seeking their understanding of what they believe will be best for them.

    These voters believe that NY RC will benefit them, then Cuomo is just doing what a politician should do which is to do the things his constituents put him in office for, however good or bad that may be.

    If you have a problem with Cuomo for doing his job for the people that voted for him, then I think at best you are directing your grievance in a completely wrong direction.

    Getting rid of Cuomo won't solve the problem. Educating the populace would.

    The root of that problem is that the populace refused to put in the time to learn enough Economics, Law and other pertinent information to make any kind of informed decision.

    In fact, I don't even blame them. We as Americans work way too hard in general to have the time to put in to all the things we need to know to vote properly.

    The political system we have today isn't because of the politicians. It's because of the Voting public, or non-voting public that allows a smaller majority to choose their politicians.

    Blaming Cuomo is at best a smoke screen for any real problems you may have with the policies he is backing.

    Since I know this to be the case, I, as a Real Estate Investor, know that I would rather not take the risk of buying NYC Real Estate that will be subject to rent regulation because I cannot guarantee that the populace will not want to vote in those in office that back Rent Regulation.

    This is what I would call RISK MITIGATION. For the last 21 years, I have been building my portfolio of Brooklyn, NYC properties that ARE NOT and have a high chance of never being rent regulated.

    Not only that, should RC get strengthened, as it just did, my RE Portfolio will also get strengthened.

    The important concept here is to first understand the root of the problem and then plan to reduce the risk and strengthen your portfolio in spite of the changes.

  • Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
    7y

    @Wesley W.

    Exactly. These politicians aren’t stupid, they know exactly what they’re doing. They are simply buying votes. Give the demographic what it wants to here. Whether or not the policies actually help that demographic is none of their concern.

  • Member since 2018 · 1k+ posts · 1k+ votes
    7y

    "They are traditionally for properties that just sit vacant for long periods of time (not for a 2-3 month vacancy) and then become a blight on the neighborhood and cause many more issues. . . . Something should be done about properties that just sit for years."

    ------------------------------------------

    If it causes a blight, I agree, but then there's usually a building code violation and you can prosecute the owner for that. But taxing a well-maintained house simply because it is vacant? That's stupid. Landlords warehouse units because the numbers don't work.

  • Member since 2019 · 26 posts · 13 votes
    7y

    @Josh E. -- there are always states like Texas that are very pro-business and landlord friendly. Even though I don't live there... all of my investment properties are in Texas... mainly due to the regulatory/business climate. I struggle to understand that rationale of providing strong dis-incentive for investment... economic theory holds that those dis-incentives will eventually materialize and have strong negative effects on the local economies.

  • Joe SplitrockPro Member
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    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y

    Florida just called to say thank you to Cuomo for giving one more reason for people to leave the state and move south. 

    Is Cuomo dumb? I mean people voted for him, so you can't blame him fully. He is doing exactly what anyone would have predicted he would do, so really no shocker here. I do feel sorry for small town NY, because big city is just going to roll all over them every time. 

  • Real Estate Broker · Thousand Oaks, CA · Member since 2017 · 63 posts · 33 votes
    7y

    California tried to do something like that statewide too.  It failed the ballot because enough people got behind the "No" position.  Now there is an amended version that is up for vote by the state legislators.  The Realtor association opposed it and got it loosened up, but not enough in my view.  Now they (sadly) support it as it only impacts people with 4 or more properties.  Very unfortunate that they caved in the name of a "housing crisis" that.

    Rent controls will NOT alleviate the housing shortage, they may actually make it worse.  As has been said before, landlords will have to increase rents each year by the maximum (otherwise they'll fall too far behind), or take the house off the market entirely by selling it as a single family home.

  • Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Joe Splitrock:

    Florida just called to say thank you to Cuomo for giving one more reason for people to leave the state and move south. 

    Is Cuomo dumb? I mean people voted for him, so you can't blame him fully. 

    The people that voted for him are the lazy, entitled leeches that will endorse any hand out that is offered them.  Unfortunately, there are throngs of them in NY (with more showing up by the day) as the hard working middle class taxpayers flee the state, further entrenching that voting block.  I don't know anyone upstate that likes him one bit, apart from some of the aforementioned leeches in the inner cities of Albany, Syracuse, Rochester, or Buffalo.

  • San Antonio, TX · Member since 2019 · 930 posts · 836 votes
    7y

    Your average voter acts like a 5 year old.  A 5 year old wants ice cream for breakfast.  Cuomo is like a bad parent who gives it to them, despite it not being good for them.

  • Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    Sure Croman went to jail for being a jerk but rent control policies allowed a massive profit to be had by someone like Croman. Rent control is so dumb. That is one thing that every economist would agree. I heard that there are several lawsuits about to hit the courts to deal with that nonsense.

    Many folks have a short term memory but every time I hear someone talk about it I think of the movie Fort Apache and Howard Cosell saying on live TV that the Bronx is burning. Folks in that situation, the landlords were burning buildings for insurance which is totally illegal but it had gone that far. 

    They couldn't make money with the buildings. It wasn't profitable to make improvements to the buildings. Bronx is burning. Read about it. Its a direct reflection of the stupidity of rent control. And it still persists.  There will be someone that will take the place of Croman who will take that same chance. I read that he used jackhammers outside of folks apartment at all times of the night to get folks to leave their apartment. 

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