Friday, May 09, 2008

The Predatory Landlords Of New York

There is a certain stigma about New York landlords and it isn't too good. Things often are not fixed in a decent amount of time or not at all. Pests can be a problem too. The worst is the way they demand to raise the rent every year on top of their sluggishness to keep the units up to par. None of this however, compares to the new breed of landlord in the five boroughs. That vulture is called a private equity firm and there are a few of them now that exist to destroy what remains of New York's affordable housing. As we've seen so far, they'll go to extraordinary lengths to kick their tenants with "affordable" rents.

From The NY Times:

Private investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns.

As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York.

Some residents and tenant advocates say that they began seeing what they consider a pattern of harassment of low-income tenants this year and suspect that it is a result of the new owners’ business models. Tenants have been sued repeatedly for unpaid rent that has already been received by the landlords; they have been sent false notices of rent bills, lease terminations and nonrenewals; and they have been accused of illegal sublets.

The companies dispute the charges of harassment and say they are protecting their rights.

Nevertheless, tenants must answer the notices in court, but many have responded by moving out, court documents indicate. When they vacate the apartments, the owners can increase the rents substantially.

Basically the deal is move into the building, intimidate the residents that don't pay you with their souls (or half their salary) and drive them out by taking them to court over and over again. It is a sick, sad and disgusting process that no one has done much of anything to stop it. It sounds a lot like those corporate crooks in the banking industry that have screwed over so many homeowners. These heartless forms of Odysseus in search of the highest profit margin are what they are. The problem is that our government does not rein them in, that is what needs to be done here. Getting the private equity and real estate money out of the city's election process would be a good start.