The OP is talking about a rent-stabilized apartment, not a rent-controlled apartment. They’re not the same. They’re two very different things (in New York City – I have no idea what those terms mean in other cities).
As to rent stabilization being a “massive expropriation of landlord’s property,” nonsense.
Look, landlords buy buildings based on the rent rolls and the potential for profit. If the building is rent-stabilized, they’re not paying more for the building than would let them make a profit. And many rent-stabilized apartment buildings in New York are completely paid off (assuming the landlord hasn’t mortgaged them after the initial purchase). New construction buildings are not covered by rent stabilization.
Despite the propaganda, rent-stabilized buildings in NYC are profitable, and lots of owners are making lots of money. There are (regulated) rent increases allowed periodically. Increases in the cost of fuel (for heat and hot water) and other items are factored into the allowable rent increases. Landlords are allowed to recoup the cost of improvements to an apartment from the tenant.
And when the rent hits a certain level, the apartment is de-stabilized and the landlord can charge market rents.
I’m not 100% sure but I don’t think they tried to have them criminally charged - I think they just used the information to successfully sue for possession of the apartment - which they were then able to either sell* or rent at market value.
I remember giving them a hard time because their “tip-off” and the reason that they started the investigation was the fact that the “wife” was 35 years older than her new “husband”. I was busting their chops because I don’t think they would’ve caught it if the age difference had been in the other direction.
Unfortunately I’m in a snitty mood with these guys right now over apartment building politics or I’d ask them.
*Many of the rent controlled/stabilized apartments are in buildings that were converted to cooperative ownership ( coops ) during the rent-controlled/stabilized tenancy. The building managers I work with generally sell these apartments once they become vacant, mostly because it’s kind of a pain from a management POV when they are renting one or two apartments in a building that is otherwise owner occupied.
Maybe, maybe not. The kind of guy who can attract a trophy wife young enough to be his daughter probably doesn’t need to live in a rent-stabilized apartment.
NYC basically pulled off a giant bait and switch where they instituted what is, in an economic capacity, indisputably rent control. Then they named this program rent-stabilization, and also added an insignificant program formally termed rent control. Any economics textbook will give NYC as the seminal example of strong rent control. Their efforts to change the language used to discuss the issue may confuse a lot of people, but they don’t change the facts on the ground.
Just because apartment buildings are bought and sold on the open market doesn’t mean an expropriation hasn’t taken place. There’s still money to be made trading a good that is steadily declining in value. Imagine that every year, the government took one square foot of your property (assuming you own a house, if not, just imagine) and gave it to your neighbor. That’d still be an expropriation, but it wouldn’t destroy the value of your property overnight, nor would it make it impossible to sell your house.
Sure, landlords are making a lot of money right now, but they deserve to make the full market value of their investment. Rent control has a host of negative results, from creating an opportunity for crime (as we saw here), to discouraging maintenance and upgrades of existing housing, to locking people into situations that don’t very well fit their current lifestyles, to increasing the price of housing for those not lucky enough to get rent-controlled apartments. This isn’t even an issue of serious economic debate. Rent control is universally seen as bad policy across the political spectrum (Here’s noted liberal Paul Krugman, for instance). A rented apartment is not a home and it is not a place to live in until you die. If you want that, buy a house.
I’m not sure I agree with you that landlords (or anyone else) “deserve” to make the full market value of their investment. It happens all too often in NYC (can’t speak for other cities) that someone will buy a rent-stablized building, or group of buildings, and then begin to make every effort to either evict all the tenants or get the building de-stablized. Most of the time the means used are legal. Often, all too often, the means are very much not legal.
So they invest in a building, then seek to change the rules to make their investment pay windfall profits. I’m not sure that’s something an investor “deserves.”
And finally, I’ve spent my whole life in New York City. And over more than fifty years, whatever Paul Krugman may have said fifteen years ago in an article about housing in San Francisco, I’ve watched this city, and the quality of life in this city, being absolutely destroyed by housing costs. I really don’t care about what’s best for landlords, what lets them realize maximum profits on their investments. I care far more about the quality of life of the people of this city. And it’s disappearing fast. NYC really is turning into the Bloombergian dream of a luxury city for the ultra-wealthy, with an outer ring of desperately poor people. And the cost of housing has everything to do with that.
But the main point of the article you cite is the kind of legal scamming landlords engage in to get around the rent-stabilization laws.
Which is bad enough, but it’s the illegal stuff that’s really bad. Moving drug dealers into buildings, refusing to make repairs, that kind of thing. There was a story in the New York papers in the last couple of weeks (I saw it in the hard-copy edition – I’ll see if I can dig up an online citation) about a landlord who actually removed the bathrooms from rent-stabilized apartments, to force his tenants to move. That was in a neighborhood that had always been a poor neighborhood, but was beginning to be gentrified. The landlord saw an opportunity to get rid of the tenants paying stabilized rents (that he’d been happy to collect for years) and rent out his crappy apartments to hipsters who will pay ridiculous amounts of money to live in a newly-fashionable neighborhood.
I’ve spent my whole life in NYC , too and I couldn’t care less about what profit landlords make ( they should have taken rent control and stabilization into account when they decided how much to pay for the building ). But part of the reason housing costs so much in NY is because rent control* and rent stabilization gives people an incentive not to move, which lowers the supply of apartments while not lowering the demand for them. I’ve known people who continued living in a tiny three room apartment after having a kid although they could afford either a larger apartment or a house , who owned two weekend/vacation houses ( one in Florida and one in PA) that they could afford only because the rent on their apartment was so low rather than buying a house they could enjoy all week , who kept three bedroom apartments after the kids moved out rather than downsizing to a one bedroom - all because the rent was so low . Rent control and stabilization doesn’t help poor people- it helps the people who got there first. It’s not the same thing - lots of poor people live in unregulated apartments as buildings with fewer than six units aren’t regulated.
And yes, there are still rent-controlled apartments in NYC. I could be living in one - my husband’s parents moved into their apartment before 1971, so it was rent controlled. If I had moved in when we got married, we could have kept the apartment after his mother passed away in 1994 ( paying about $225/mo rent when the stabilized units in the building paid over $1000). If we stayed until my kids were adults, my husband and I could have moved out and one of my kids could have then been a successor tenant and *still *been under rent control. I’m not sure what the controlled rent for that apartment would be now, but it would be much less than the market rate for an apartment off 8th Avenue in the twenties. People thought I was crazy because I wasn’t willing to either move in immediately , or make it appear that my husband still lived there and move in after his mother passed away. I wasn’t willing to do it because I like an actual bathroom, rather than a tub in the kitchen and a toilet down the hallway outside the apartment to the front door . I’m just funny that way.
Huh? It sounds like your in-laws were essentially renting a dorm room with a shared bathroom. People in NYC will seriously pay over $1000/month for that?
$1,000 per month is rock-bottom dirt cheap in NYC. People will pay that for a single room with the bathroom down the hall (and shared). Yes, it’s true.
It wasn’t shared when I met my husband in the mid 80s- the other apartments with higher rent (over $1000 in 1994) had a tiny bathroom in the apartment. When the building was built ( or had plumbing installed- not sure which was first) , there was one shared toilet per floor. When the apartments were renovated to include a bathroom inside each apartment ( sometime in the 70s or 80s) the rent controlled apartments weren’t renovated and ended up with the formerly shared toilets. I don’t know what would have happened if there were two rent-controlled tenants on the same floor. But yeah, people in 1994 would pay $225 for a three-room apartment with the tub in the kitchen and the toilet down the hall and people will now pay $1000 or more for a single bedroom in a shared apartment ( which also means sharing a bathroom ).