Most sites I found were either explaining the concept of rent control and why it sucked or didn’t suck. What I want to know is, how do you go about getting a rent-controlled apartment?
I’ve heard about inheriting them, but how does that work if the person you are inheriting it from just rents the place?
How else can you get a rent-controlled apartment? Sub-letting, I suppose?
In NYC, at least, you can’t really inherit a rent-controlled apartment. What can happen is that person A has a rent-controlled apartment. Person B ends up living with person A. Person A dies or moves away. Person B can now remain in the apartment under rent-control if certain conditions are met- I know there’s some minimum amount of time that both people have to be living in the apartment.
There are people (other than the tenants) who think rent control doesn’t suck?
In New York, there are two types of rent regulation, Rent Stabilization (RS) and Rent Control (RC). As a general matter, Rent Control is a better deal, but to be in RC the tenant (or his/her predecessor) had to be in possession since 1978. Once the RC tenant moves out, the apartment (again as a general matter) reverts to Rent Stabilization. It is nearly impossible to succeed to RC apartment unless you are a close family member living with the tenant of record.
Most apartments in the City either are or were Rent Stabilized because the buildings are either old enough to qualify or the owners accepted certain tax benefits which required them to apply RS. An apartment may fall out of RS for several reasons, most of which resulted from some strange legislative compromises. First, if a building goes coop or condo, in most instances a rent regulated tenant may remain in the building under regulation, but when that tenant vacates, the apartment becomes unregulated. Second, if the legal regulated rent of an apartment exceeds $2,000 per month, it will become unregulated when the existing tenant vacates. Third, if the regulated rent of an apartment exceeds $2,000 per month and the tenants have a household income in excess of $175,000 per year, the landlord can apply to deregulate the apartment. Needless to say, there are lots of twists, turns and quirks to all of this.
That being said, if an apartment is Rent Stabilized, anyone who rents it is entitled to the benefits of RS. Although it is becoming less common to find RS apartments in the lower half of Manhattan because of the $2,000 vacancy decontrol provisions, they are widely available in upper Manhattan and the outer boroughs. Under RS, your rent will only increase by a percentage set by the Rent Guidelines Board each year, though there are some factors that can augment the increase. One significant restriction of RS is that the apartment must be your primary residence. Also there significant limitations on subletting, including that you can sublet a RS apartment for a maximum of two years.
The succession rules under RS are arcane, but generally one has to have been a close family member (or living in a family-like relationship) with the tenant of record for at least two years before the tenant of record vacates. In that case, you can succeed to the apartment under the existing RS lease, but be prepared for a legal fight to prove that you actually qualify for succession unless your case is particularly clear-cut.
So, the easiest way to get a RS apartment is just find one and rent it. It will be difficult to do in Manhattan, and you may have to pay a broker to get one, but it should be fairly easy to do in the outer boroughs, unless you are looking in one of the hot areas. The thing is that in the outer boroughs, the RS apartments are often at about the same rent level as the unregulated apartments, so it doesn’t benefit you all that much, unless your area gets hot, in which case it can help keep rent increases in check.
Is there a difference between a coop and a condo in NYC?
Sure. Most apartments in NYC are co-ops. When you buy a co-op apartment, you don’t actually buy the apartment, you buy shares in the building, and the number of shares corresponds with the square footage of the apartment. Unless you’re buying from the person who owned the building when it was converted to a co-op from renting (or the builder, if it’s a co-op from the outset), you need to apply to, and be accepted by, a committee elected by the members of the co-op, who will screen your financial statements, interview you, and get references. The more ‘exclusive’ a building, the harder this process tends to be. (The building-owner ones are referred to as ‘sponsor apartments’ and don’t require an application process; they tend to be more expensive as a result.) Aside from paying the purchase price for the apartment, you will also need to pay a maintenance fee that will include the property taxes on your apartment and your share of the building’s mortgage payment, if the building has a mortgage, as well as fees for upkeep, staff, etc. You will need to get significant construction/changes in your apartment approved by a committee.
New buildings in NYC are frequently condos. In a condo, you buy the actual apartment, and don’t need to apply. You’ll still have to pay maintenance fees (for building upkeep, staffing, etc.), but you pay your own property taxes dirfeectly to the city, and I don’t think that condos can get mortgages as a building, as it’s not a single entity. There are still boards, which will make building-wide decisions like staffing (is the janitor doing a good job?) and handles maintenance issues.
What Billdo referred to, ‘going coop or condo,’ means that the owner of a rental building has decided to sell the apartments. Everyone who lives in the building is given the right to buy their apartment at a preset price, and if they don’t want to buy, they can stay on as renters, keeping whatever rent regulation they had before until they die or move out. (Dying is more common.) Those apartments are the sponsor apartments that I mentioned above, and when those are vacated, the sponsor (ie previous owner of all of the apartments) can then sell them for whatever the market will bear, without co-op approval. Until the sponsor doesn’t own any apartments, they can still vote in co-op elections using as many shares as they own, which can be a sizeable percentage of the total. It can take decades before all the sponsor apartments were sold; our building went coop in the mid-eighties, and I’d guess that about 10-15% of the apartments are still sponsor-owned.
Thanks. I was a bit disingenuous, as I figured there was a difference. It’s just that as far as I know we don’t have coops around here – at least I’ve never run across one while house hunting.
Where is “the Burg”? 
Every city differs on it’s rent control laws, so your question- without specifying location- is like asking “How high is up?”.
For example, here in San Jose, you generally can’t “inherit”. But if you were a co-tenant and the other tenant died, you’d keep the RC rent.
Oh we don’t have RC here in my neck of the woods (which is St. Petersburg BTW). I had just heard of “inheriting” RC apartments (the term was actually used in an article I read about RC) and I was confused, since these are rental apartments. The co-tenant thing makes sense, it was just the term inherit that threw me off.