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I live near the planned new Amazon headquarters in Queens, in a rent-stabilized apartment. I've heard that housing prices are already going up because of the announcement. What does that mean for my prospects of a buyout?
"Landlords buy out rent-stabilized tenants where there is room to squeeze more profit out of an apartment, typically by renovating the empty unit and then increasing the rent above the threshold that makes it deregulated," says Steve Wagner, a real estate lawyer and buyout expert with the law firm of Wagner Berkow.
"To the extent that Astoria has a decent selection of prewar, multi-family apartment buildings where rents are still lower than much of Manhattan and the tonier precincts of Brooklyn, it still has a sizable number of rent-stabilized apartments. Long Island City's new glassy towers and old factory buildings mean there is less rent-stabilized stock, but some does exist."
That could be about to change in a big way.
"When you have an extraordinary circumstance of a company like Amazon creating 25,000 jobs in a relatively small area, the demand for housing in and around that area, and along train lines serving that area, will likely increase," says Wagner. "And as the demand for housing increases, it would put upward pressure on rents, which would encourage landlords to be more interested in buyouts."
When negotiating a buyout, Wagner analyzes renters' financial needs and landlords' points of leverage to try to obtain the most money for their clients. (Renters pay no upfront fee, only a percentage of the buyout once it goes through.)
"We typically find leverage points that are not obvious to renters, which is why working with an experienced buyout attorney is important," says Wagner. "For example, a big institutional landlord refinancing a mortgage likely has the resources to put towards buyouts, and is feeling added urgency to make the rent rolls look good--that is, by listing higher rents--so a renter in such a building would be in prime time for having a lawyer make an approach about a buyout."
"Similarly, if your building's zoning allows for something bigger to be built there, the plan may be to empty out the building and tear it down," says Wagner. "The fewer tenants are left standing in front of the wrecking ball, the more leverage those that remain have.
Wagner emphasizes that the impacts of the Amazon expansion will not be localized to Western Queens.
"There are going to be a number of new jobs, and in turn a number of new people and their families looking for housing," he says. "I don't limit that to Astoria or Long Island City. It's going to spill over to anywhere where there is a reasonable degree of transportation."
That could mean noticeable effects in Midtown, the Upper East Side, and eastern Queens along the E, M, and 7, as well as Greenpoint, Williamsburg, and Bedford-Stuyvesant. Big picture, Wagner reiterates, "Amazon coming here is going to increase the number of renters and the number of buyers. That will presumably create upward pressure on rents and presumably increase land owners' interest in buying out tenants."
New York City real estate attorney Steven Wagner is a founding partner of Wagner | Berkow with more than 30 years of experience representing numerous co-ops, condos, and individual owners and shareholders. To submit a question for this column, click here. To ask about a legal consultation, send an email or call 646-791-2083.