Anti-rent control guy

I’m tired of hearing the residents of Stuy Town complaining that their low rents need to be preserved because Stuy Town is a middle class oasis filled with hard working firemen and teachers.

This is nonsense.

There are people who have been living their for decades paying obscenely low rents. Good for them, but everyone else is subsidizing them with obscenely high market rents.

There is no law that everyone has to live in Manhattan. If they can’t afford a market rate rent, let them move across the river to Queens.

StuyTown resident replies

I’m sick of the wealthy real estate developers catering to the wealthiest citizens. I’m even more sickened by the complete lack of a community oriented, humanistic approach to urban development. Furthermore sickened am I by the lack of even half-way decent public schools to send your children to. Do you work for Bloomberg?

Anti-rent control guy

Hey StuyTown Resident-

If you can’t afford to live in Manhattan, or are too cheap to pay to live here, get out. Everyone else in the city is subsidizing deadbeats like you.

StuyTown resident

(BTW I’m not looking for a fight.)

A) I am not a deadbeat.
B) I can afford to live in Mahhattan, because I’m lucky enough to live in Stuyvesant town.
C) I don’t want to move, because this is my home. I’ve lived in Manhattan for 20 years. My wife was born and raised and publicly schooled here. Our children were born, are being raised and attend public school here.
D) Can you explain to me, clearly, how high market rental rates are directly subsidizing my rent stabilized lease?

Anti-rent control guy

When some people are paying artificially low rents, this creates housing shortages. Other renters not lucky enough to have a rent controlled or stabilized apartment wind up paying artificially bloated rents.

This is not some far out right wing theory. This is basic economics 101.

StuyTown resident

There is no housing shortage. There IS a shortage of AFFORDABLE housing. Occupied, existing apartments, don’t create housing shortages. Poor foresight and greedy development to cater to the wealthy do. Reagan tried supply side, trickle down economics. Look where that got us.

Anti-rent control guy

This has nothing to do with Reagan.

You have been living in Stuy Town for 12 years. You have not moved from your apt. for 12 years because you have an artificially low rent. In other words, since your apartment is essentially off the market it causes a housing shortage.

Trying to make housing more “affordable” by enacting price controls is a bit like putting out a fire by pouring gasoline on it. No other city in the US has rent control and no other city in the US has the endemic housing problems like NYC. The only reason why your apartment is kept artificially low is because of a bunch of pandering spineless politicians. It has little to do with good economics or creating a truly efficient and affordable housing market.

Apparently your version of liberalism does not extend beyond your apartment. As long as you have a cheap place to live to hell with everyone else who is paying a bloated rent subsidizing you.

Stop justifying your greed by attacking Reagan and a bunch of mysterious, faceless landlords. I’m sorry, but you lose this argument.

StuyTown resident

I haven’t moved from my apartment in 12 years because I like it there. It’s my home. I’m not a transient.

Many other cities in the United States have rent control including Washington, D.C. and Los Angeles, CA.

I never stated my version of liberalism, and your concise description thereof is based on assumption and inaccurate.

I made no justification of my greed by that statement. I am not greedy. I didn’t attack Reagan. I simply stated that his idea of supply side economics didn’t work, which is fact.

You are allowed to believe you won an argument.

I am allowed to believe you are wrong.

I wish you wealth, so that you never have to worry about the cost of living and can afford any place you may so desire to live.

Anti-rent control guy

You have been living in Stuy Town because it is cheap. If NYC would do the right thing and get rid of rent control your rent would rise to a more rational level (and everyone else’s rent would plunge).

If you had to pay a fairer, market-based rent for Stuy Town you would leave in a New York minute.

StuyTown resident

If I had to pay a “fairer market based rent” in Stuyvesant Town, I’d get a second job to be able to afford it. Just like my parents worked two jobs when we were kids to afford the mortgage on their house so we WOULDN’T HAVE TO MOVE OUT OF OUR HOME.

Maybe I should make assumptions about you as you do about others. I assume you are seated pretty comfortably and don’t understand that most of us work very hard for financial gains that aren’t very lucrative and have to struggle to make ends meet. If you understood that dynamic, you may be more sympathetic to those of a lesser standing than yours.

Anti-rent control guy

I work very hard for my money, thank you. The difference between me and you is that I don’t have a sense of entitlement. I don’t believe I have the right to live somewhere that I can’t afford.

As I said before, if living in Manhattan is too expensive for you, why don’t you move to Queens, Brooklyn or Staten Island? How dare you assume that society owes you a cheap Manhattan apartment with gardens and a river view simply because you want to live here.

Against rent control too

I’m not going to defend Anti-Rent Control Guy’s tone, but don’t be so quick to dismiss the substance of what he’s saying by merely calling him a crank.

What he’s saying is fact: rent control is a market distortion that creates winners and losers, and what’s more sacrifices efficiency in the process. Whether you’d leave Manhattan or work two jobs absent rent control is besides the point. You are a lucky winner in the current situation by not having to do either, but others pay the price and the whole system is suboptimal and unfair.

StuyTown resident

Anti-Rent Control Guy,

I don’t doubt you work very hard for your money. You’re welcome. But again you read into my words. I am saying that you may not understand the dynamic of the struggle to make ends meet.

I don’t want to move to those areas you name, because I’ve made my home in Manhattan.

I don’t have a sense of entitlement. I can afford Stuyvesant town.

Society owes me nothing and I don’t dare to make that assumption (the assumption I made was about your standing). Anything I have I’ve earned. No one owes me anything.

I would pay a higher rate if the laws were to change, in order to be able to keep my home.

To me, it’s beginning to sound like you are a little jealous of we Stuyvesant town residences with our park and river views. TS is still renting some apartments. Maybe you should consider moving here.

Anti-rent control guy

The only reason you’ve been able to make Manhattan your home is because people like me are subsidizing your lifestyle.

I remember a year or so ago the NY Times, hardly a bastion or right wing thinking, ran an editorial critical of Tishman’s antics in Stuy Town. However, in the same editorial it had harsh words for a system that was so dysfunctional that it allowed a lucky few to have cheap apartments in Stuy Town.

You’re damn right I’m jealous. I wish I had a cheap apt. with a garden and river views.

Pro rent-control

Anti-Rent Control Guy, could you please enlighten us as to how YOU specifically are subsidizing rent stabilized tenants?

Another issue for you to grapple with, aren’t tax paying renters subsidizing home owners who get tax breaks on their mortgage interest and property taxes?, plus a $500,000 tax free capital gain on the sale of their home every so many years?

What about the regressive FICA taxes paid by the poor and the middle class on their entire income while the wealthy stop paying it once they reach just over $100K

Warren Buffet, a multi-billionaire and the second richest person in the US, complained to Congress that the wealthy are not paying their fair share of taxes, telling them that his tax rate was 16% and his secretary’s is 25%.

If you are upset over what you consider to be societal inequities, you are better off starting with the wealthy who take governmental financial bailouts from the middle class taxes, then pay themselves insane compensation and bonuses.

Another person against rent control

The fact that there probably exists someone (many ones, in fact) in StuyTown Resident’s exact financial position who is unable to live in his same neighborhood in a comparable apartment for a comparable rent is proof positive that the system as it stands is unfair. He is LUCKY to live in a nice neighborhood, in a nice apartment, in the most desirable borough of the most desirable city in the US, if not the world. No use in comparing him to someone who makes more and can afford more. But plenty of people DON’T make more and CAN’T afford more and DO live in the outer boroughs in much worse neighborhoods in much worse apartments! Is it because they don’t work (as) hard? NOPE. Is it because they are worse people? NOPE. Just like the wealthy are paying high(er) rents to subsidize cheap(er) rents, the UNLUCKY middle and lower classes are paying to live in areas/apartments that are a far cry from where StuyTown Resident lives. Can they afford his rent? YEP. But they didn’t get lucky. Fair?

Yesterday, we posted about what’s happening in New York City’s Stuyvesant Town: The companies that bought the apartment complex for $5.4 billion three years ago have defaulted on loan payments and walked away from the property, turning it over to creditors. That’s the equivalent of a homeowner stopping mortgage payments and mailing his house keys to the bank (see today’s New York Times article for a report on that phenomenon), except that in this walkaway, 25,000 tenants have been left in limbo.

An interesting post last week on the Manhattan real estate blog UrbanDigs.com explains just how wrong-headed the economics of the deal were in the first place, and why, as one observer said to the Times, the transaction is the “poster child for the entire housing bubble.”

Stuy Town – Not The AOL/Time Warner of Real Estate – Worse!

“At the time, it looked like a sound investment.”

    -Clark McKinley, a spokesman for Calpers.

Some of us are still wondering whether mass hallucinations were at work during the bubble years, allowing so many to act so thoughtlessly on such a grand scale…

I keep being plagued by the idea, that after a period of reckless profligacy, lessons must be learned, prudence must be rediscovered and tough choices made and vigorously executed to heal the prior transgressions. Yet our society seems unable to actually tolerate even the most preliminary steps in this process, including fessing up to prior bonehead maneuvers.

Example number one being the statement made above by Calpers regarding its investment in the Stuyvesant Town/Peter Cooper Village buyout by Tishman Speyer. I hate to disagree with the world renowned stewards of capital at Calpers, but in my humble opinion this deal was patently absurd from the day it was first proposed. If I had a fedora I would pledge to eat it if Tishman Speyer was actually unaware of how ludicrous the deal was when they first proposed it. But alas despite the sponsor having precious little skin in the game, a fantastical deal price and an incredibly pompous assumption that the seller had no clue as to the upside still embedded in the property, a bunch of Stuy Town losers stepped up to fund this deal which will go down in history as one of the biggest and stupidest real estate deals of all time.

I know, I know, you can’t believe it. Why would Tishman Speyer, heretofore an organization of sterling reputation, knowingly invest its hard earned dollars in a deal that was more than likely to fail from day one?

According to news reports the complex of 11,232 apartments was purchased for $5.4B, or $480,000 per unit. As a rule of thumb, savvy (meaning long-term profitable and surviving) investors in New York City rent-regulated buildings like to pay under $100,000 per unit. Granted deals at those prices are very hard to find and this rule of thumb applies more to Brooklyn, Queens, the Bronx or Morningside Heights, than to prime Manhattan locales south of 95th St. On the Island of Manhattan many would probably consider $200,000 a unit to be workable long-term, though not a “value investment” as you would need to eventually turn over all the apartments and do a condo conversion to really make out big. But these kinds of deals have been done pretty frequently.

Now the Stuy Town/Peter Cooper complex includes 80 acres of downtown property, an asset with long-term value for sure. But how likely is it that a massive block of airspace largely dedicated to rent controlled buildings would be upzoned in our lifetime…even in a Bloomberg administration…..not much.

The post then goes into specific reasons the numbers never added up, and ends with this analysis, which to my eyes reads like calling the deal pretty much a scam in which the smaller investors — like the Califonia retirees’ fund, the government of Singapore, and the Church of England — were the ones left holding the bag.

For the record, Tishman Speyer was not the first or the only deal sponsor to look at the ridiculous financing parameters available in the market with no recourse to the borrower and say damn the pricing…let’s do the deal. If it works out….. great!, if it doesn’t we get most if not all of our money back and then some (through various fund management, property management and in some cases financing fees) and we just hand the keys back to the bank. The well publicized Riverton Apartments fiasco enjoyed many similar features of the Stuy Town deal.

So for all of those fiduciaries supposed to be investing money for teachers, firemen, the people of Singapore and God, shame on you. This was never a good deal for anyone but Tishman Speyer. The sponsor should have realized, however, that although the debt holders may have no monetary claim on them there is always recourse to your reputation in a deal as high profile as this one was.

Now, according to the Times, tenants are “in limbo,” and a rally was held Sunday to keep the housing complex “an affordable oasis,” in the words of the New York Daily News. Below is a video from the rally featuring dozens of long-time residents, found on the blog StuyTown’s Lux Living. “This is my home,” one tenant says, “and it should be treated better than a Monopoly game; we’re talking about people’s lives, not profits.”

For more on Stuyvesant Town, check out The Stuyvesant Town Report.