UESModerate

The Odyssey is actually about a man’s 7 year journey to get people to understand New York’s broken rent stabilization system.

Comptroller Mark Levine blasts NY rent-stablized policies for housing crisis: 'It's outrageous' trib.al/Ohbf7ex

I mean you can keep saying 12% because Zohran said it during his campaign but it was not true then and it’s not true now. 1. 12% was NOI spread year over year and included free market units. Mortgage payments (debt service), income taxes, depreciation, and capital expenditures (major repairs) are not included in NOI. 2. return on investment averages 2-5% in profitable regulated buildings. In 90% rent stabilized buildings the floor is 0 to negative. That’s why they are selling! 3-approved rent increases over the last ten years have lagged cost increases by 20%. If buildings are not distressed then why are the DSA and tenant groups pushing for billions to buy them at low cost? They can’t both be double digit cash machines and dropping in value and purchase cost at the same time.

@arpitrage Which models do you recommend to use?

I think we're already at the point where academics should default to using open source models for research Good enough for many tasks, cheaper, and we get replicability (instead of relying on models that will get deprecated)

Most housing code violations are tenant caused. ¯\_(ツ)_/¯

@ArisStagira @EinhornGabe 100% wrong, you have no idea what you are talking about and don't understand how the RGB data reporting works. Try AI for dummies and throw the rgb reports in and see what the analysis says.

@EinhornGabe The 1% of landlords who own almost all rent stabilized units have continually increased operating income above expenses for years. 6% last year, 12% the year before, and 10% the year before. Mom-and-pop landlords don't own rent stabilized units. The big corps that do are fine.

Everyone blames landlords when a rent-stabilized building falls apart. Nobody talks about what happened in 2019. New York passed the HSTPA, which eliminated vacancy decontrol. Before that law, when a stabilized apartment's rent crossed roughly $2,800/month and the tenant moved out, the landlord could bring it to market rate. That was the light at the end of the tunnel. The one mechanism that let owners reinvest. Now that unit is stabilized forever. The rent stays capped no matter what. The Rent Guidelines Board approves increases of 2-3% per year on one-year leases. Meanwhile insurance premiums on some of these buildings doubled in three years. So you've got owners collecting $1,400/month on apartments that cost $1,600/month to maintain. And we're surprised the hallway lights are out. The law was supposed to protect tenants. It's destroying the buildings they live in.

@EinhornGabe Clearly you have no idea how accounting works. Everything you wrote above is wrong.

@danielgolliher Jim Nantz fan are we?

Hello, friends

@erik_engquist The article was excellent

I'm getting positive and negative feedback on this column. I tried to address the mayor's rhetoric on landlords with an analogy that would resonate with him. therealdeal.com/new-york/2026/…

If you oppose this it’s because you believe there’s a chance whatever faction of the Democratic Party you support could be diluted in a low turnout primary election by independents, blanks, and Rs. There are more independents in NY than registered republicans btw. 18 other states do this and it’s very much about getting less ideologically insane candidates through the primary in hundreds of votes margins to win virtually assured elections with a massive dem registration edge. So naturally DSA opposes that because it’s not about making government work better or giving people a voice or blah blah blah. It’s about power. Baseline party dems should realize that in a hurry and get their act together.

@jaymart222 The vacancy rate is bull shit. It's much higher, just take the 60,000 vacant stabilized units and the vacancy rate is over 2%.

I keep seeing posts blaming June’s record rents on the rent freeze. Wrong claim, right instinct. Let’s get the mechanics straight. The freeze does not take effect until October 1. June’s Manhattan record of $5,295 and Brooklyn’s $4,350 were set by leases signed months before it applies to a single unit. And rents were breaking records well before the June 25 vote. Manhattan hit $5,000 in February and $5,125 in May. This is a supply crisis. Manhattan vacancy is 1.49% and listings are down 16% year over year. So no, the freeze didn’t cause June’s numbers. Here’s what it will do. Markets price the future. Owners of market-rate units now know that 40% of the city’s rental stock is frozen for two years while insurance, taxes, fuel, and labor keep climbing. Some of June’s heat is already anticipatory. The real distortion arrives as the freeze bakes in. The mechanism is simple. Over 500,000 units of housing sit in buildings that are majority mix regulated. Same roof, same boiler, same insurance bill, same tax lot. When the regulated units are frozen, every cost increase in that building has one place to go: the unregulated units next door. Market rents will climb at unprecedented rates, and the freeze will be a direct input. I would never advocate for freezing rents. But if a city insists on doing it, the only version that doesn’t wreck the pricing market is freezing every unit at once. Freezing 40% of the market doesn’t stop the squeeze. It concentrates it on everyone outside the freeze. It’s every person for themselves, and the warmth of collectivism will leave millions out in the cold.

@DanBiancoNYC @jaymart222 @MarkLevineNYC Realistically 100-130 AMI makes sense as the baseline reset level with adjustments downward by market forces and upward by needs in 65% or more stabilized buildings. These units coming online need to be accretive to building financial reserves as well as covering all costs.

@DanBiancoNYC @jaymart222 @MarkLevineNYC It's not just recoupment costs, 80% AMI is most likely way too low to cover both recoupment (inclusive of debt on the unit level reno) and building cap ex needs on 50% or more stabilized buildings which have huge economic drags in 30-40 year occupancy units.

Rents in NYC have just hit an all-time high. Median market rate in June… Manhattan: $5,295/mo (+8.2% year-over-year) Brooklyn: $4,350 (+8.1%) NYC’s housing affordability crisis is at DefCon 1. We need to push harder on every front to address our housing shortage. Update zoning, invest more City $ in affordable units, lower the time & cost City bureaucracy imposes on construction, get 1000s of vacant regulated units back on the market. We need bold action. This is a crisis.

@DanBiancoNYC @jaymart222 @MarkLevineNYC The big costs needed to be covered in addition to marginal costs are cap ex building wide, Facade, Roof, Plumbing Risers, electrical risers and mains, boiler/burner upgrade. The vacant units rent needs to cover the unit level upgrade plus apportion up to building needs.

@jaymart222 @MarkLevineNYC The building’s operating costs don’t really change if that unit is occupied. The rent received even at current rates exceeds the marginal increase in operating costs. You have to look at marginal cost to operate, not average cost.

This is why a vacancy reset would measurably lower rents in neighborhoods. Imagine a few hundred to a thousand units priced below these bench marks in a neighborhood coming online in months.

There is a VERY obvious solution that wouldn’t cost the city a single penny and would add more supply, lower market rents and improve the quality of housing. That is getting rid of rent control. They know it too but their ideology takes precedence over the people

@jkitsallgood @danielgolliher How many units were deregulated during the 97-2019 time frame? If it was abused, what percent of units were deregulated?

@danielgolliher we had vacancy reset until landlords abused it yet renters are the problem lmfao

When I talk about the rent freeze in NYC, or someone asks me about it, my internal process often goes like this: >> bracket the question of whether or not rental price controls are good or bad, which distracts people from realizing they don’t know how NYC’s system actually works, and that it is a bad system that wiser proponents of rental price controls do not endorse. >> ask “is” questions we can readily get decent answers to: “What is the rent regulation system? What are the laws that allow it, and under which conditions? Who is in rent stabilized housing, with what family compositions, incomes, etc? What kinds of buildings are stabilized, and in which ways? Who owns them? Do we have access to any balance sheets?” >> address the inevitable pedantic point about “rent stabilization” versus “rent control,” and what the definition of “market rate” means exactly. >> remind interlocutors that we are not discussing “rent controls” generally, but those laws specifically in the context of NYC/S, which has a unique regime. >> internally observe that: NYC’s system of using rent price controls is not what anyone thinks it is; it is a bad system, even if you want price controls on rents; it is hard for anyone to understand the system; the system as it exists is essentially a historically accreted accident, and not a deliberately engineered choice as a whole. Finally: my points of strongest contention are not with people who are for or against price controls on rents (even though I am generally not for them). My largest contention is with people who: (1) speak about rent control generally without reference to the actual specifics of NYC’s system, (2) defend the system we have, which is kind of the worst of all worlds. It is the system you’d hope your city doesn’t have (no means testing, inheritability, no vacancy reset, applied across buildings of wildly different financial positions, etc). I could easily make my peace with a system that operates more sensibly, and has more reasonable trade-offs. That is not this one.

@Samburnsda12831 @danielgolliher Way too Core Manhattan/High rent Brooklyn specific, missing about 650K RS Pre 74 buildings. DCS, did you live in 421a (new con stabilized) or old stock?

@danielgolliher All fair, but I'm looking at it through a simpler lens: 2 million New Yorkers just received some temporary and MILD economic relief at the expense of the profit margins of private equity. Is it perfect? No. Does it help everyone? No. Is it better than doing nothing? Absolutely.