Zohran Mamdani is attempting this synthesis — one with some basis in our city's housing policy history — but I doubt it's one he'll be able to implement.
I'm struck by the contortions required of landlords to fit themselves into the city's byzantine rent control ordinance and the other legislation that flows from that. It strikes me as highly distortionary - much like tariffs. I wonder now, that the Mamdani administration has made clear that rent control really is a "taking" under the Constitution, might SCOTUS decide to end the enter rent control regime, nationwide? LA and NY's recent actions seem to be have crossed the line of what is allowable under our laws.
If SCOTUS struck down New York's rent control scheme, I don't think it would have much impact on California or Minnesota. The reality is that NYC is the worst form of rent control ever devised and no where else in the world is it this bad... outside of maybe Cuba and Venezuela. In California, the regulations are bad, but they aren't a physical taking and proving a regulatory taking is basically impossible.
Yeah California has a law that specifically outlaws vacancy control and the imposition of rent control on single family homes. It's nowhere near as onerous as New York's.
Depends. Let's look at the Pinnacle bankruptcy. It's $440 million for the 90+ buildings and 5,125 units. But the land value for these properties is closer to $900 million. So, if you spend $440 million, minimize costs so you only lose $5 million a year, you are making a calculated risk that you could demolish and redevelop or sell the land over time. Ultimately it could be a big return on your investment.
I would equate it to the Big Short... A bet that requires small losses for a time being but could end up with a huge payoff at the end of it.
I read that lawyers actually argued in court a rent stabilized property was essentially worthless as justification to seize the property and honestly thought if this some 4th dimensional chess thing going on and actually they're hoping SCOTUS declares at least that eliminating the "vacancy bonus" is unconstitutional and therefore do the politically unpleasant work for them of reforming this unworkable post 2019 rent stabilization regime.
Unlikely that SCOTUS is going to be that specific with a ruling. They might rule that all value has been eliminated from some apartments and the owners deserve "just compensation". That would force the state to change the laws so that there was a pathway to adequate compensation. That could be a vacancy bonus or a revised IAI. This is what the Institute for Justice lawsuit focuses on.
A more likely legal case will be when the building owners apply to demolish the buildings because the land value is significantly higher without a building on it. The state Division of Housing and Community Renewal will deny buildings and they will sue in federal court for the right to demolish. Likely that case will win at SCOTUS.
There are several property owners of 100% stabilized buildings in NYC that have already applied to the government for Article XI agreements (a tax break in exchange for turning your building into a nonprofit). They were denied, so now they are going to file for demolition.
Of all the costly unintended consequences of Local Law 11, the very worst is the fact that the regulation can require a building to erect a scaffold that extends onto a neighboring property, but does not require the neighbor to accept a scaffold to be erected.
It’s all pretty exhausting. I watched ‘ Drop Dead City’ on Amazon over the holidays. The level of mismanagement, etc, is almost apocalyptic. I get these are different times, still, politicians are promising things and have no way of paying for them? My sister, just moved her family to Greenwich Village, from Columbus Ohio, They purchased a townhome for 20 million dollars. I assume they can afford to pay higher taxes, but are there enough to cover all the newly promised programs?
I'm struck by the contortions required of landlords to fit themselves into the city's byzantine rent control ordinance and the other legislation that flows from that. It strikes me as highly distortionary - much like tariffs. I wonder now, that the Mamdani administration has made clear that rent control really is a "taking" under the Constitution, might SCOTUS decide to end the enter rent control regime, nationwide? LA and NY's recent actions seem to be have crossed the line of what is allowable under our laws.
If SCOTUS struck down New York's rent control scheme, I don't think it would have much impact on California or Minnesota. The reality is that NYC is the worst form of rent control ever devised and no where else in the world is it this bad... outside of maybe Cuba and Venezuela. In California, the regulations are bad, but they aren't a physical taking and proving a regulatory taking is basically impossible.
Yeah California has a law that specifically outlaws vacancy control and the imposition of rent control on single family homes. It's nowhere near as onerous as New York's.
It seems like buying property in New York City is asking to be a victim.
Depends. Let's look at the Pinnacle bankruptcy. It's $440 million for the 90+ buildings and 5,125 units. But the land value for these properties is closer to $900 million. So, if you spend $440 million, minimize costs so you only lose $5 million a year, you are making a calculated risk that you could demolish and redevelop or sell the land over time. Ultimately it could be a big return on your investment.
I would equate it to the Big Short... A bet that requires small losses for a time being but could end up with a huge payoff at the end of it.
Pretty much at this point
I read that lawyers actually argued in court a rent stabilized property was essentially worthless as justification to seize the property and honestly thought if this some 4th dimensional chess thing going on and actually they're hoping SCOTUS declares at least that eliminating the "vacancy bonus" is unconstitutional and therefore do the politically unpleasant work for them of reforming this unworkable post 2019 rent stabilization regime.
Unlikely that SCOTUS is going to be that specific with a ruling. They might rule that all value has been eliminated from some apartments and the owners deserve "just compensation". That would force the state to change the laws so that there was a pathway to adequate compensation. That could be a vacancy bonus or a revised IAI. This is what the Institute for Justice lawsuit focuses on.
A more likely legal case will be when the building owners apply to demolish the buildings because the land value is significantly higher without a building on it. The state Division of Housing and Community Renewal will deny buildings and they will sue in federal court for the right to demolish. Likely that case will win at SCOTUS.
There are several property owners of 100% stabilized buildings in NYC that have already applied to the government for Article XI agreements (a tax break in exchange for turning your building into a nonprofit). They were denied, so now they are going to file for demolition.
Of all the costly unintended consequences of Local Law 11, the very worst is the fact that the regulation can require a building to erect a scaffold that extends onto a neighboring property, but does not require the neighbor to accept a scaffold to be erected.
It’s all pretty exhausting. I watched ‘ Drop Dead City’ on Amazon over the holidays. The level of mismanagement, etc, is almost apocalyptic. I get these are different times, still, politicians are promising things and have no way of paying for them? My sister, just moved her family to Greenwich Village, from Columbus Ohio, They purchased a townhome for 20 million dollars. I assume they can afford to pay higher taxes, but are there enough to cover all the newly promised programs?