This article on rent stabilization shows how a landlord or developer who is seeking to buy out tenants attempt to spend as little as possible. The landlord or developer keep the tenants in the dark about the true value of the property and how much much they are willing to spend. If the tenant has no clue about the real price of the property then they are likely to draw the short straw and get a less than desirable transaction. On the other end of the spectrum, the tenant may know that the buyer is desperate to get their hands on the property and pay over the market value. Either way, this variance relates to how the economy is filled with winners and losers. One side benefits from the other sides loss.
Kevin, I completely agrue with you on the fact that that economy is filled with winners and losers. In this case, the winners are the tenants who have been fortunate enough to find an apartment in which to dwell, particularly those individuals who otherwise would be easily pushed out of the incredibly expensive New York City housing market. Philadelphia does not have these strict rent controls (that is, rent ceilings on apartments below market price), and therefore, housing in the immediate Temple University area, for example, are quite high compared to other neighborhoods in Philadelphia, and so on. (Although the prices are certainly lower than several other Philadelphia neighborhoods (e.g. Rittenhouse Square, Chesnut Hill, Old City, and others.)The losers in a lack of rent control in this case are undoubtably the residents who have lived in this neighborhood prior to the increase in demand in housing near Temple in the 90s and 00s, as Temple has moved towards becoming a residential campus, not only a commuting campus, as it had been in the past. The winners, on the other hand, are students who are able and willing to pay, with roomates, in many cases, 2000 - 4000 dollars per month, just for a 4 to 5 bedroom apartment. This is a price that most other North Philadelphia residents would simply be unable to pay. Were a rent ceiling in place, the students would be the losers, as a shortage of off-campus housing would undoubtedly develop.
I found this article extremely intersting. I have certainly heard about renters being offered thousands of dollars to move, however the location was not New York City. The tenants are certainly lucky and in an excellent position of power. The longer they say "no" to an offer the more money the landlord is losing. It is only natural that the amount on the table will go up and up! Many tenants however are thrilled to get paid to move, and except the first offer. This article taught me to wait it out, whether for more money or because I truly love my home. I would certainly hate to be a landlord in this situation but at the end of the day, I will eventually make a profit with my new construction.
I think we may be losing sight of the initial subject being brought up by the article. The headline says it best, "The Lucky Break of Rent Stabilization". The recent article in The New York Times, is informing the average every day reader about rent stabilization. The idea here is that rather than pay market value for an apartment, the government has set up a law to stabilize what renters can charge tenants. And from what I understand, apartment buildings have a select number of properties that are stabilized for those who can not afford market value. This article makes it known that typically, if they do it correctly, the tenants will come out on top. If a developer has plans to buy a building and turn it into something desirable, such as a condominium complex, they know the true value and need the tenants to vacate the building to further advance in their development. For those paying at a stabilized rate, they luck out. Initial offers to tenants will be low, but if they wait it out and time it right they can cash out and make an enormous amount. In a sense, it can be viewed as a great investment to certain tenants. It's the same for businesses and hotels recently in Wildwood. For instance, if a business is looking to procure land that is already owned by (let's use) a dry cleaner. I am using this example because it has happened in my neighborhood. A Chevy dealership bought out multiple businesses that were in a lot. Problem was, the dry cleaner would not leave. But, in the recent months they were gone and the finished product was a full dealership. Guaranteed the dry cleaner made out.
As for the Temple example with the students being winners. I don't see how this is possible. I'm not looking, because I live at home. But people I know are and I have visited some of the properties with them. And they are extremely over priced, not just for the local residents but students as well. These 4-5 bedrooms are $500-600 a month per person without utilities and they are so not worth that. The bedrooms are small, a living room is non-existent, there is barely a kitchen and most of the houses, you don't even get the full house. Not to mention, it's North Philadelphia and judging by the TU Alert's I get every now and again it's not a desirable neighborhood. I have lived in Northeast Philadelphia my entire life and know how bad North Philadelphia is. That's why I don't see how those prices are great for students. Talking to my family, they agree. They say that unfortunately the landlords have the upper hand and know that students typically want to live on campus. Therefore, overcharge for something and make a killing.
I think that without rent controlled/rent stabilized apartments in NYC it'd be impossible for a middle class to live there. That being said, I really don't agree with the government regulation of rent in New York. The Market value for the rent should be paid so that it is profitable for landlords to own and renovate their buildings. Yet, the rule that landlords can raise the rent 20% annually after it has hit the 2,000 mark seems like extortion. Both the renters and the landlords seem like they are acting unethically and that the market has been so incredibly tampered with that it is unclear what a fair market price would be. Rent stabilization doesn't exactly rip off the landlords though, as they get beneficial tax breaks from leasing a rent stabilized apartment. It just seems to me that this whole system is a mess and is too complicated to fix easily.
I agree with Tyler because no one said life was fair. In this economy and this world it is survival of the fittest. In this case, the person that is most knowledgeable will have gained the most out of the situation. I look at this situation from the viewpoint of the developers who spend millions of dollars on these apartment buildings to make a profit. If an opportunity comes where tenants do not understand their assets then I would take that chance to gain more money on what I have already spent. It may not be ethical but it is legal and that is all that matters in this situation.
I don't live on campus so there's a lot I don't know about renting a home so I'm glad this was selected as a topic. It's certainly a worthy topic for any college student.
I agree with Abdullah. This article is a prime example of how the economy and the world in general is about the survival of the fittest. Ignorance is toxic, especially with this particular heated debate. Whether what the landlord does is ethical or not, it's considered legal so for right now there's still a lot of controversial things landlords are allowed to do. So it's only right that the fairness and effectiveness of these rent-stabilization laws are being considered for reexamination. It's going to be very interesting to see in June if the law will be extended, revamped or lapsed.
Before reading this article I had no idea about rent controls, and the information was very interesting. It seems odd to me that there is legislation on the amount of money one can charge for an apartment, even if the number of apartments is scarce. I see how it can be an inconvenience for those that own the buildings or those that are buying/selling but at the same time it is something that they go into the deal knowing about, its not like the apartments become rent controlled after they buy them. It also seems like a plus for those that are looking for a place to rent in the city. Also I am not sure about the actual facts and figures but I am assuming that since there is still extremely high demand for the buildings and apartments, and not everyone can get one, the supply and demand are probably below equilibrium. Perhaps if the prices were raised, it would be better for everyone, or at least most people.
Now I can see why people do serious investigating for rent-controlled apartments in New York. Not only do they get to pay rent at an affordable price that is not likely to increase greatly, they can refuse to move and rack up a nice sum from landlords wishing to develop their property. I don't think rent-controlled apartments are the answer for everyone. For example the artist in the story was paying a ridiculously low rent and then made out like a bandit when she finally decided to leave. I wonder if other scenarios include people who left for a low amount and then couldn't find another place they could afford to live. Perhaps some renters refuse to move not simply to make a profit but because they wouldn't be able to find another apartment in the area. If there were no rent-ceilings then people would know they are living in an apartment where they could afford to live and they would have more stable situations where they wouldn't have to rely on the buyout money to find another apartment.
I believe that Rent-Controlled apartments can be a great idea when implemented and controlled in the proper way. A rent-controlled property allows for an individual to live in a property that is affordable to rent. The problem arises when a landlord wants to buy-out the renters in order to build a high-class property where a middle-class property once existed. Landlords and tenants are able to exploit one another in this process all in the name of the mighty dollar. Renters can refuse to be bought out by their landlords until they receive a payments that dwarfs the value of their property. At the same time landlords can exploit their renters and pay them next to nothing in order to capitalize on the value of the land they will be developing on. Ultimately if Rent-Control is to remain, the laws enforcing it will need to be reformed and overhauled.
Another situation in which life memories can be bought and sold for, “The Price is Right”. What a business to get into just by being a tenant. Eventually, the landlord will be celebrating all the way to the bank if legislation allows rent stabilization policies to lapse. Terrie Hawkins MWF 9AM
Kevin Park AE MWF 9:00-9:50
ReplyDeleteThis article on rent stabilization shows how a landlord or developer who is seeking to buy out tenants attempt to spend as little as possible. The landlord or developer keep the tenants in the dark about the true value of the property and how much much they are willing to spend. If the tenant has no clue about the real price of the property then they are likely to draw the short straw and get a less than desirable transaction. On the other end of the spectrum, the tenant may know that the buyer is desperate to get their hands on the property and pay over the market value. Either way, this variance relates to how the economy is filled with winners and losers. One side benefits from the other sides loss.
Kevin, I completely agrue with you on the fact that that economy is filled with winners and losers. In this case, the winners are the tenants who have been fortunate enough to find an apartment in which to dwell, particularly those individuals who otherwise would be easily pushed out of the incredibly expensive New York City housing market. Philadelphia does not have these strict rent controls (that is, rent ceilings on apartments below market price), and therefore, housing in the immediate Temple University area, for example, are quite high compared to other neighborhoods in Philadelphia, and so on. (Although the prices are certainly lower than several other Philadelphia neighborhoods (e.g. Rittenhouse Square, Chesnut Hill, Old City, and others.)The losers in a lack of rent control in this case are undoubtably the residents who have lived in this neighborhood prior to the increase in demand in housing near Temple in the 90s and 00s, as Temple has moved towards becoming a residential campus, not only a commuting campus, as it had been in the past. The winners, on the other hand, are students who are able and willing to pay, with roomates, in many cases, 2000 - 4000 dollars per month, just for a 4 to 5 bedroom apartment. This is a price that most other North Philadelphia residents would simply be unable to pay. Were a rent ceiling in place, the students would be the losers, as a shortage of off-campus housing would undoubtedly develop.
ReplyDelete*I completely agree, not argue. Sorry.
ReplyDeleteSamantha Anderson
ReplyDeleteMWF 9-9:50
I found this article extremely intersting. I have certainly heard about renters being offered thousands of dollars to move, however the location was not New York City. The tenants are certainly lucky and in an excellent position of power. The longer they say "no" to an offer the more money the landlord is losing. It is only natural that the amount on the table will go up and up!
Many tenants however are thrilled to get paid to move, and except the first offer. This article taught me to wait it out, whether for more money or because I truly love my home. I would certainly hate to be a landlord in this situation but at the end of the day, I will eventually make a profit with my new construction.
Ryan McDonald
ReplyDeleteMWF 9-9:50 a.m.
I think we may be losing sight of the initial subject being brought up by the article. The headline says it best, "The Lucky Break of Rent Stabilization". The recent article in The New York Times, is informing the average every day reader about rent stabilization. The idea here is that rather than pay market value for an apartment, the government has set up a law to stabilize what renters can charge tenants. And from what I understand, apartment buildings have a select number of properties that are stabilized for those who can not afford market value. This article makes it known that typically, if they do it correctly, the tenants will come out on top. If a developer has plans to buy a building and turn it into something desirable, such as a condominium complex, they know the true value and need the tenants to vacate the building to further advance in their development. For those paying at a stabilized rate, they luck out. Initial offers to tenants will be low, but if they wait it out and time it right they can cash out and make an enormous amount. In a sense, it can be viewed as a great investment to certain tenants. It's the same for businesses and hotels recently in Wildwood. For instance, if a business is looking to procure land that is already owned by (let's use) a dry cleaner. I am using this example because it has happened in my neighborhood. A Chevy dealership bought out multiple businesses that were in a lot. Problem was, the dry cleaner would not leave. But, in the recent months they were gone and the finished product was a full dealership. Guaranteed the dry cleaner made out.
As for the Temple example with the students being winners. I don't see how this is possible. I'm not looking, because I live at home. But people I know are and I have visited some of the properties with them. And they are extremely over priced, not just for the local residents but students as well. These 4-5 bedrooms are $500-600 a month per person without utilities and they are so not worth that. The bedrooms are small, a living room is non-existent, there is barely a kitchen and most of the houses, you don't even get the full house. Not to mention, it's North Philadelphia and judging by the TU Alert's I get every now and again it's not a desirable neighborhood. I have lived in Northeast Philadelphia my entire life and know how bad North Philadelphia is. That's why I don't see how those prices are great for students. Talking to my family, they agree. They say that unfortunately the landlords have the upper hand and know that students typically want to live on campus. Therefore, overcharge for something and make a killing.
MWF 9-9:50
ReplyDeleteC Mac
I think that without rent controlled/rent stabilized apartments in NYC it'd be impossible for a middle class to live there. That being said, I really don't agree with the government regulation of rent in New York. The Market value for the rent should be paid so that it is profitable for landlords to own and renovate their buildings. Yet, the rule that landlords can raise the rent 20% annually after it has hit the 2,000 mark seems like extortion. Both the renters and the landlords seem like they are acting unethically and that the market has been so incredibly tampered with that it is unclear what a fair market price would be. Rent stabilization doesn't exactly rip off the landlords though, as they get beneficial tax breaks from leasing a rent stabilized apartment. It just seems to me that this whole system is a mess and is too complicated to fix easily.
Abdullah Allen
ReplyDeleteMFW 9 - 950
I agree with Tyler because no one said life was fair. In this economy and this world it is survival of the fittest. In this case, the person that is most knowledgeable will have gained the most out of the situation. I look at this situation from the viewpoint of the developers who spend millions of dollars on these apartment buildings to make a profit. If an opportunity comes where tenants do not understand their assets then I would take that chance to gain more money on what I have already spent. It may not be ethical but it is legal and that is all that matters in this situation.
Josh Willgruber
ReplyDeleteMWF 10-1050
I don't live on campus so there's a lot I don't know about renting a home so I'm glad this was selected as a topic. It's certainly a worthy topic for any college student.
I agree with Abdullah. This article is a prime example of how the economy and the world in general is about the survival of the fittest.
Ignorance is toxic, especially with this particular heated debate. Whether what the landlord does is ethical or not, it's considered legal so for right now there's still a lot of controversial things landlords are allowed to do.
So it's only right that the fairness and effectiveness of these rent-stabilization laws are being considered for reexamination. It's going to be very interesting to see in June if the law will be extended, revamped or lapsed.
Nicholas Poiron
ReplyDeleteMWF 10-10:50
Before reading this article I had no idea about rent controls, and the information was very interesting. It seems odd to me that there is legislation on the amount of money one can charge for an apartment, even if the number of apartments is scarce. I see how it can be an inconvenience for those that own the buildings or those that are buying/selling but at the same time it is something that they go into the deal knowing about, its not like the apartments become rent controlled after they buy them. It also seems like a plus for those that are looking for a place to rent in the city. Also I am not sure about the actual facts and figures but I am assuming that since there is still extremely high demand for the buildings and apartments, and not everyone can get one, the supply and demand are probably below equilibrium. Perhaps if the prices were raised, it would be better for everyone, or at least most people.
Michelle Zei
ReplyDeleteMWF 10-10:50 am
Now I can see why people do serious investigating for rent-controlled apartments in New York. Not only do they get to pay rent at an affordable price that is not likely to increase greatly, they can refuse to move and rack up a nice sum from landlords wishing to develop their property. I don't think rent-controlled apartments are the answer for everyone. For example the artist in the story was paying a ridiculously low rent and then made out like a bandit when she finally decided to leave. I wonder if other scenarios include people who left for a low amount and then couldn't find another place they could afford to live. Perhaps some renters refuse to move not simply to make a profit but because they wouldn't be able to find another apartment in the area. If there were no rent-ceilings then people would know they are living in an apartment where they could afford to live and they would have more stable situations where they wouldn't have to rely on the buyout money to find another apartment.
Nicholas Camaioni
ReplyDeleteMWF 9 - 10 AM
I believe that Rent-Controlled apartments can be a great idea when implemented and controlled in the proper way. A rent-controlled property allows for an individual to live in a property that is affordable to rent. The problem arises when a landlord wants to buy-out the renters in order to build a high-class property where a middle-class property once existed. Landlords and tenants are able to exploit one another in this process all in the name of the mighty dollar. Renters can refuse to be bought out by their landlords until they receive a payments that dwarfs the value of their property. At the same time landlords can exploit their renters and pay them next to nothing in order to capitalize on the value of the land they will be developing on. Ultimately if Rent-Control is to remain, the laws enforcing it will need to be reformed and overhauled.
Interesting
ReplyDeleteAnother situation in which life memories can be bought and sold for, “The Price is Right”. What a business to get into just by being a tenant. Eventually, the landlord will be celebrating all the way to the bank if legislation allows rent stabilization policies to lapse.
Terrie Hawkins
MWF 9AM