Lessons from a Small Landlord

An open letter to the next mayor from a small NYC landlord

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Dear Mr. Mayor (whoever you turn out to be),

Congratulations on your victory!  Even though you’ll be getting rent-free subsidized housing for the next four years, you still face a housing problem.

NYC’s population has been growing rapidly over the last 30 years, but unlike the other big growth periods in NYC’s history, NYC isn’t really building much new housing this time around. NIMBYs, Jane Jacobs disciples, historically-oriented yuppies, and old rent-regulated tenants, restrictive zoning,  landmarking, and rent-regulations have combined to make it virtually impossible to put up meaningful amounts of housing anywhere near subways or where people actually want to live. 

In a nutshell, there's too much demand and not enough supply. Unfortunately, NYC’s policies tend to frustrate and drive the small landlords out of the market, exacerbating the housing shortage.  

If you want to keep small landlords (and the cost-effective housing that we provide) in the system, here are some suggestions:

  • Fix rent regulation right now. There are over 30 vacant apartments on my block that are unoccupied because NYC’s rent regulation laws don’t let the owners rent the apartments at fair prices. Many small landlords (myself included) make no return on our rent-regulated properties, and see no reason to invest in them so long as they remain under rent regulation.  When the tenants move, we try to combine multiple apartments into bigger units that are exempt, or renovate six-family buildings into one or two family buildings. So long as rent regulation exists, these apartments will never be available to tenants, which is why the population of Brooklyn and Manhattan, even after the housing boom, is lower than it was 50 years ago. 
  • End rent-stabilizaton giveaways for the wealthy.  Currently, rent stabilization even applies to apartments where the tenant’s income is over $250k and the rent is over $2,500/month.  I’ve never met a person making $250k per year who couldn’t afford market rent, and returning these apartments to the market will encourage the current occupants to buy new luxury condos and return these apartments to the market; NYC will also get higher property tax income.  Besides, these self-appointed "activists," some of whom are occupying their grandparents’ apartments at their grandparents’ rents, are the same people who will kill any sort of progressive housing agenda that goes against their self-interest. No property owner is going to buy into subsidized ‘affordable’ housing when he sees wealthy people taking advantage of the system at his expense.
  • Speed up housing court.  In NYC it is simply too dangerous to take a chance on an unproven tenant without significant assets, as the eviction process often takes a year. Speeding up housing court (and making the judges actually follow the laws) would allow small landlords like me to take chances on younger and unproven tenants without guarantors.  Fixing housing court would also end the tyranny of the "professional tenant" that we all fear.
  • Get rid of some of the totally obsolete requirements. For example, allow me to send notices electronically to tenants who choose to receive them that way--the annual lead paint notice, the window bars notice, etc. --this alone would save a forest worth of paper. 
  • End the requirement to have a "Certificate of Non-Harassment" before getting a permit to renovate an SRO.   This adds six-plus months and massive expenses to renvoations on these buildings; as a result a lot of them are decrepit hulks that no bank will finance.  This law hasn’t preserved low-income housing at all, and just leaves eyesores on blocks in Harlem, the Bronx, and Bed-Stuy. 
  • End the tyranny of ever-escalating property taxes, water bills, and "fees."  The costs of running two of my apartments have roughly doubled in the last five years. Across the city, about 1/3 of rents go to taxes and fees. In the case of two of my apartments, it is roughly 80 percent.

As I’ve said before, if you make it too difficult to be a part-time small landlord, you won’t have any, and if you make rent regulation stronger, you’ll wind up with fewer rent-regulated units.

As mayor, you have the opportunity to make NYC fairer, freer, and cheaper to live in--or to burden landlords (and by extension, their tenants) with so much bureaucracy that small landlords go out of business, leaving us with the choice of renting from a giant apartment corporation like AvalonBay, or buying a condo.

Sincerely, 
A small landlord


This is the final installment of Lessons from a Small Landlord ,a bi-weekly column penned by a real-life NYC landlord whose pseudonym is Craig Roche. 
 
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