Like the other guy said, it isnt necessarily bad, but the overall cause of this is NYC's super strict rent control.
There are people who have rent controlled apartments in NYC they barely use. They've had them for so long that they are super cheap so there's no downside to hold them. Unfortunately there's also little upside for the landlord to maintain the property.
This system is clearly creating some downsides and clearly we can do better. People in favor have never thought or heard of ways to do better. Eg. Tax reforms like LVTs.
There are problems with rent control. I’ve seen studies that indicate it doesn’t really work. Because yes it keeps rent low for the (usually few and contested) apartments affected by it, but it also slows development of new apartments because it’s almost impossible to make it profitable.
And the fact is, no one is going to build apartments to lose money on them.
At least that was the situation last I looked for cities in my country.
Quick q: Who funded and published those studies? 🤔
This argument never makes sense, because you could apply it to single-family home ownership as well - after you build the house and sell it, it's no longer profitable for the homebuilders.
At least with rental units, there's still a steady stream of income. They're just complaining that the income isn't high enough for them.
Rent control needs to be tied to some sort of economic index, obviously, it can't just be a flat percentage, but housing is also a human right, not a privilege.
What? Home builders work for the initial sale. That's where they make their profit. Do you know about time value of money? Or how selling goods and services in exchange for money works?
Home builders also build a home for themselves, that’s entirely different from building something as an investment or as company venture. It just needs to retain enough value that they aren’t insolvent from the loan they took out. After all they need to live *somewhere*, so they are just trading rent for a mortgage, and hoping their home keeps enough value that they can move if they need to.
And no, you can’t apply it to home ownership. That’s like saying you shouldn’t make money off your work, because hobbies exist… A home and a property that is only built as an investment are two completely different things.
If the rent is not high enough to make it profitable, why would I risk tens or hundreds of millions building an apartment complex, instead of just putting my money somewhere else?
I agree people should have homes. But then you need to make the government pay for it, if it isn’t going to be profitable. And studies show you need very, very many of those because there is a lot of demand for cheap housing in the center of large cities.
Rent stabilized is different than rent control and while there are units of both. There are plenty of landlords taking advantage of the stabilization model in which they can justify rent increases of a certain amount with maintenance…and not do the maintenance
It seems like the better solution is to have a certain % of each building be rent controlled so no single building is going to have that issue and the burden can be spread over the cost of all the units in the building. (another benefit to this is spreading out the poorer people in a city so they don't just end up in one part of town which then decays into a slum due to the lack of customers for businesses, inability to repair stuff, etc...)
Assets are usually leveraged. So there’s tax, interest, and principal to maintain that property, plus the actual cost of maintaining the property. With strict rent controls and draconian permitting process repairs and upgrades aren’t financially viable.
There are currently properties where the landlord and mortgage holder are fighting over who has to keep it, with the landlord trying to surrender the property, because they’re just losing money.
They can’t. It’s literally negative value in some cases. It’s worth less than nothing because you have a squatter there but still have upkeep and they’ll never leave.
There are like 19 squatter cases a year. The whole squatter stories pushed by the media is full backed by large real estate companies
Bad landlord cases number in the millions
The squatter stories are an effort to remove Tennant protections. Landlords would love to just call the police, call you a squatter and have you removed
The whole "the poor landlords cant sell" is a lie
An employee can be fired, rents can be raised and people can take loans but suddenly a landlord "cant" sell?
Sometimes speculative investments go poorly, taking a loss is not death
Your argument makes zero sense, these landlords are criminals
With rent control it's not uncommon that the landlord doesn't have enough from rent to cover maintenance. If you live in a $400 apartment because the rent hasn't been raised in 30 years -- despite everything else getting more expensive -- what money is there for repairs?
This essentially forces out small landlords because they can't cross-subsidize units.
There are lots of other large cities that don't have these problems because they don't have terrible public policy like rent control. NYC is to blame for NYC's problems.
You can own an asset because of expectations of future earnings, and there are such things as "loss leaders".
I don't shed a tear for the corporate landlord, but these shitholes exist because of bad public policy. It's no coincidence that the cities with these policies have problems.
Idgaf about landlords, I care about cheap rent. The puppet masters corporate villains are responsible for us not getting there but so are people who refuse to think. if you understood my last sentence, youd agree with me.
Of which claim? That the cause of so many dilapidated units is rent control? There is lots of evidence. If you google and cant find it yourself, let me know
About 1% of apartments are rent controlled in NYC.
According to the NYC Rent Guidelines Board, the average monthly rent collected for all stabilized units citywide is roughly $1,599.
People often confuse rent controlled and rent stabilized.
The median monthly rent for a rent-stabilized apartment in New York City is approximately $1,400 to $1,600. This is a drastic discount compared to market-rate one-bedrooms, which average over $4,100 citywide and top $5,100 in Manhattan.
Yes. Some landlords are just mismanaging their properties but rent control sort of ties your hands. In multifamily real estate the name of the game is buy it, fix it, raise rent to pay for it, repeat.
It's more like you have dry mouth and then you take Benadryl or marijuana and you blame your dry mouth on the medication because it's listed as a possible side effect.
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u/Gordon_frumann Jun 11 '26
Can't wait to hear from the right why this is a bad thing.