Shenanigans_forever t1_je6ogi9 wrote
So you need to separate two parts of the law. One is the inability to evict somebody without reason and a long legal fight. The other is price controls on rent.
I am not an economist, but it is pretty easy to see how price controls lower the incentive to create more rental units and could lead to making it uneconomic for landlords to maintain their property. Long term, this is terrible for both new renters and existing renters.
In the short term, it is boon to existing tenants and terrible for new tenants. Because the landlord is entering into a perpetual lease and it is harder to evict people, the bar to clear to get a place and the cost will go up. This is basic risk pricing. The risk of a perpetual lease is higher than a 1 to 2 year lease and that risk will be priced by the market.
Existing tenants should love it in the short term. You just got a perpetual lease renewal right and a price cap for free.
IronyAndWhine t1_je6proh wrote
I agree that price controls on rent need to be coupled with state-backed building construction projects and other policies directed at increasing gross unit supply. These are also major interests of the tenants rights groups pushing for this legislation, and it is also of course opposed by landlord lobbies — and therefore tricky to get political pressure behind, like Good Cause.
While it may be true that "the risk of a perpetual lease is higher than a 1 to 2 year lease," universal regulations like this will not materialize the kind of long-term harms to tenants that you're imagining. Landlords will continue to rent out the units they own given the choice between "perpetual leases" (I do not like this term) and no tenant at all. Because all landlords universally would face this minor increase in risk, competition in the market should maintain prices at there current levels.
Shenanigans_forever t1_je6vl68 wrote
From the landlord perspective it is perpetual. The tenant has an unbound by time option to renew at a cost controlled by the state and the landlord has to accept.
KaiDaiz t1_je6wx99 wrote
Its also the legal term. OP might not like it but it is what it is. Also OP gloss over that the LL will continue to rent or else have no tenant at all while ignoring the LL will now price future rents with a perpetual tenant risk hence higher prices and scrutiny for the next renter who don't have any price cap increase protection until the renew. OR the very real possibility, the units now taken off market
IronyAndWhine t1_je6wrrt wrote
Yes exactly, I don't like the term for two reasons, but the main one is that it is only perpetual for the landlord.
It is also technically not perpetual for even the landlord though because if, for example, a small landlord wanted to start living in the unit they are renting, or wants to house their parent/sibling/child in the unit, the tenant does not have occupancy rights over those granted by the landlord.
Shenanigans_forever t1_je6zu8x wrote
I mean that is a subset of the housing stock in NYC but not really relevant on average. This is a perpetual contract, just only one side really has power to break it.
In practice, this law is giving one side of a contract, the rentor, perpetual rights over somebody else's property and setting price controls to boot, and the other side of a contract, the landlord, no consideration at all. This does not end well at all.
And this isn't really an academic point. It's not hard to see the difference in quality of rent stabilized places vs market rate places on average. A decade plus in NYC makes that one abundantly clear. Now add in less incentive to be a landlord and build additional rental stock, less tax benefits to go along with rent controlled prices, and much more risk. This is an absolute disaster in the making
IronyAndWhine t1_je70obv wrote
> This does not end well at all.
It ends well for working class people who rent.
> rent stabilized places vs market rate places
Are you sure you live here? Everyone of my friends and colleagues have applied for rent stabilized units, often weekly, trying to be one of the lucky few selected by competitive lottery who gets to live in rent-stable housing.
There are obvious problems with the management and funding of rent-stable units, but those problems are solvable vis-a-vis broader policy in the works from tenants rights organization and others. I don't know anyone who would turn down the chance to live in one.
Shenanigans_forever t1_je72nvd wrote
I've lived in NYC since 2005 and have lived in multiple stabilized units and unstabilized units. There was no lottery, it was like finding a normal unit but you signed a stabilized lease. Not sure what the hell you are talking about. I can tell you with 100 percent certainty that the stabilized units were shit holes compared to the other units and that buildings with stabilized tenants were run far worse. Things were not fixed, you had to fight about heat, et cetera. The current proposed law would turn the entire housing stock into this.
As I mentioned above, it is great for existing tenants in the short term, bad in the long term, and a disaster for new tenants and landlords.
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