PIRATES COMING ON BOARD !
"The Lord led them along the right way
to reach a city they could dwell in." Psalm 107
New York is a city that people could dwell in, especially if they are well fixed financially! The gap between those who have much and those who have little is constantly widening. It shows up in the schools their children attend, the restaurants they frequent, and the apartments they live in. The city provides public housing for lower income families. Luxury condominiums house the affluent. Those in between find the housing pool for families of moderate income constantly shrinking. NY city and state Mitchell-Lama programs, created in 1955, offered housing at moderate costs made possible by below-market mortgages, real estate tax abatements, and segments of the old federal Urban Renewal programs. To attract developers into the M-L program, they were gauranteed that when the mortgage was satisfied their developments could go to market-rate rent levels and become their pots of gold at the end of the rainbow. In the last two decades, as mortgages became satisfied, these developments went to higher rent levels or were converted into condominiums. Affordable housing was being lost.
New York City has long tried to protect tenants of moderate income from crushing increases in rent, first by Rent Control in 1946 and then by Rent Stabilization in
1969. A nine member Rent Stabilization Board (on which I had the interesting experience of being a member from 1978 to 1982) employs research and statistical teams to analyze the amount of increased costs to the landlords for labor, heating oil, tools, paint, and the many sundries needed to keep an apartment house afloat. The Board would then establish the allowable percentage increases in rent for one and two year leases. It was hardly a mathematically exact process but the program has served the city well and kept moderate-income tenants and landlords in a tenuously peaceful balance.
Now enter the villains! When a rent stabilized apartment becomes vacant, the rent can be substantially increased. If the landlord makes major capital improvements (MCI), he will become entitled to additional increases. Individuals and private equity firms have been buying up rent stabilized apartments by the thousands. The NY Times last week reported that in this frenzy Vantage Properties in the last two years has spent $1 billion to buy 9200 rent regulated apartments. Such equity firms seek investors by indicating, in more subtle terms but basically,"Wow, will you hit it good when the regulated tenants move out!" The Times then goes on to describe various tactics used by these firms to force the tenants out.
Hats off to the NY Times for this investigative reporting! Hats off to our city for its Mitchell-Lama, Rent Control, and Rent Stabilization programs. Hats off to the neighborhood groups, including churches, and, hopefully, city officials who are trying to thwart the pirates!
to reach a city they could dwell in." Psalm 107
New York is a city that people could dwell in, especially if they are well fixed financially! The gap between those who have much and those who have little is constantly widening. It shows up in the schools their children attend, the restaurants they frequent, and the apartments they live in. The city provides public housing for lower income families. Luxury condominiums house the affluent. Those in between find the housing pool for families of moderate income constantly shrinking. NY city and state Mitchell-Lama programs, created in 1955, offered housing at moderate costs made possible by below-market mortgages, real estate tax abatements, and segments of the old federal Urban Renewal programs. To attract developers into the M-L program, they were gauranteed that when the mortgage was satisfied their developments could go to market-rate rent levels and become their pots of gold at the end of the rainbow. In the last two decades, as mortgages became satisfied, these developments went to higher rent levels or were converted into condominiums. Affordable housing was being lost.
New York City has long tried to protect tenants of moderate income from crushing increases in rent, first by Rent Control in 1946 and then by Rent Stabilization in
1969. A nine member Rent Stabilization Board (on which I had the interesting experience of being a member from 1978 to 1982) employs research and statistical teams to analyze the amount of increased costs to the landlords for labor, heating oil, tools, paint, and the many sundries needed to keep an apartment house afloat. The Board would then establish the allowable percentage increases in rent for one and two year leases. It was hardly a mathematically exact process but the program has served the city well and kept moderate-income tenants and landlords in a tenuously peaceful balance.
Now enter the villains! When a rent stabilized apartment becomes vacant, the rent can be substantially increased. If the landlord makes major capital improvements (MCI), he will become entitled to additional increases. Individuals and private equity firms have been buying up rent stabilized apartments by the thousands. The NY Times last week reported that in this frenzy Vantage Properties in the last two years has spent $1 billion to buy 9200 rent regulated apartments. Such equity firms seek investors by indicating, in more subtle terms but basically,"Wow, will you hit it good when the regulated tenants move out!" The Times then goes on to describe various tactics used by these firms to force the tenants out.
Hats off to the NY Times for this investigative reporting! Hats off to our city for its Mitchell-Lama, Rent Control, and Rent Stabilization programs. Hats off to the neighborhood groups, including churches, and, hopefully, city officials who are trying to thwart the pirates!
posted by Msgr. Harry J. Byrne | 2:47 PM
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