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Friday, December 2, 2011

Power to the 99% or to the 1%: The Partnership Between the TA and Brookfield



Once again, the ST/PCV Tenants Association is trying to place a bid on acquiring Stuyvesant Town/Peter Cooper Village. This time, the TA has a partner: Brookfield Asset Management.

At the public press conference on Wednesday, November 30th, Councilman Dan Garodnick struck all the right notes: much was mentioned, and stressed, about a "non-eviction" plan and "the middle class" and "affordability." But is a deal that will require of tenants a six-figure number in mortgage loans, with maintenance fees that could equal or surpass their current rent, really affordable and a secure base for whatever middle class remains in Stuyvesant Town and Peter Cooper Village?

Let's admit from the outset that self-interest plays the most important role for everyone concerned--tenants, buyers, non-buyers, and asset management companies. While the arguments can be buttressed by lofty ideals about the middle class and apartment affordability, the bottom line is that everyone will be looking after their own interests when it comes to the sale of ST/PCV. If you are a ST/PCV resident with money to burn and believe that acquiring an apartment here at a low insider rate is good for you as an investment or for your family's future, you will be for the deal; if you are a tenant who cannot afford to pay for, or get a mortgage for, whatever the final asking price will be, or if you don't see any value in paying so much money when you are in a rent stabilized situation, then you will be against the deal. As for asset management companies...sorry, but I don't believe in the tooth fairy or beneficent benefactors. These companies want to make money, and the complex that's Stuy Town/Peter Cooper Village, stretching from 14 st to 23 st and 1st Ave to the FDR Drive, is, despite all the troubles and turmoil here, a huge prize that many are after, and NOT because they want to maintain rent stabilization and the middle class in Manhattan. At the Wednesday press conference, Barry Blattman, the senior managing partner of Brookfield, stated that ST/PCV is "the kind of real estate that our company covets." Thanks for warning us.


Brookfield's Barry Blattman

(I have to mention that I have no hardcore distrust of Brookfield, aside from my tempered cynicism regarding any real estate/asset management company being on the side of tenants. Barry Blattman seems like a nice guy and Garodnick believes that Brookfield's intentions toward tenants are "benevolent." I did a check of Brookfield's donations to NYC candidates for the past decade, and the company appears fairly reputable in who they give their money to. Note: They donated considerable money to Thompson in the last mayoral election and completely stiffed Bloomberg, though such a face-slap could be based on some personal/business clashes in the past.)

All this said, it would be petulant to dismiss outright whatever plan is still brewing amongst the key players here. According to the Town & Village, the TA and Brookfield share these goals: "a conversion plan that would allow tenants to remain on as stabilized renters if they choose and give those who wish to buy an attractive insider's price." Other goals: "maintain affordability and stability of the community with tenants free of harassment, keeping the open spaces open and improving maintenance and upkeep of the property." T&V adds, "To maintain stability, the plan includes keeping some of the apartments permanently affordable through funding from government sources." Remarkably, this latter point contradicts all the politico and TA speeches about the "middle class" and "affordability" and proves that the complex will NOT be affordable should the plan go through. Another source mentions a figure of 10% for the number of apartments being kept in affordable range. If that pathetically low percentage is true, and tenants accept the deal, then the death of the middle class and "affordability" will come to this complex much sooner than was ever anticipated.


Garodnick, Stringer, Quinn, Duane

A significant part of the plan involves Brookfield, a company that owns over 20 million square feet of property in Manhattan. According to T&V, Brookfield would be the sponsor of the plan, "putting together the money for the purchase, offering the units for sale, and then remaining the landlord and manager of the unsold apartments." At first and even second glance this arrangement means that Brookfield would be in charge, much like Tishman Speyer was in charge, but with the TA's blessings and some (?) input from a co-op/condo board should tenants win the right of apartment ownership.

For tenants wishing to make money, the TA and Garodnick are pushing for some type of cap on tenant owners flipping an apartment for considerable profit. While seemingly good for "affordability," such a stipulation will, no doubt, dampen the enthusiasm of some tenants who are already envisioning making a killing on the deal.

But right now, there is no detailed plan, just a vague template with several constructs ready to be argued over, filled in, amplified.


Center: TA's president, Al Doyle, talking with Brookfield's Barry Blattman

What concerns me most is that I see no way as to how "middle class" and "affordability" can be mentioned in the same breath with Stuyvesant Town and Peter Cooper Village if this still-brewing plan goes through. Whoever pays off 3 billion plus to the original senior lenders that CWCapital represents will be stuck with making up that 3 billion somehow, and I get the feeling that tenants and prospective tenants will be the ones ultimately footing the bill, while at the same time paying high maintenance costs on a property and buildings that are not deluxe or luxury living.

We also have to ask ourselves this question: Do we see, in the distant future, Stuyvesant Town and Peter Cooper Village as it is now? Do we see the same buildings standing here, the ones without central air-conditioning or heating, no doormen, fabricated ugly project-style after the Second World War? Or do we see something else: almost a mini-city of sleekly designed high-rises with doormen and the most contemporary modern conveniences? If the latter picture IS going to be the reality, then is it much better to start now and approach it in a straight line? Or are we going to approach this reality (if such it will be) in a zigzag line with continual squabbles, buy-ins, buy-outs, this management/that management, tempers flaring, blood pressures rising, and continual lack of certainty with tenants separated by rental status and potentially fighting each over a variety of monetary and maintenance issues? Ultimately, will everything that's here get replaced by eminent domain, either the genuine kind (upon which ST/PCV was built) or the more devious kind where the property or chunks of it will be bought out by monied interests who will, after offering tenants a sizable buyout, start knocking down the buildings one by one to erect a city of the future. (If we don't want to see this vision a reality, then the TA's efforts to have ST/PCV landmarked may not be such a mad Quixotic idea, after all.)

There is this thing called "progress" and Stuyvesant Town/Peter Cooper Village, in the judgement of some, may be standing in the way. But that other thing, "self-interest" is going be continually in the game, whether people want to admit it as the most vital component or not.

-----------------

Read into these photos what you will:





(Thanks to NoSpinZone for the photos.)

DON'T FORGET THAT TOMORROW, SATURDAY, DEC. 3rd, the TA will hold an important meeting at Mason Hall, Baruch College, 23rd St. & Lexington Ave. at 1pm. Politicos and a Brookfield representative will be present! For more details visit www.stpcvta.org

68 comments:

Anonymous said...

First: kudos on an incredibly comprehensive, and I believe, accurate analysis of the situation as we now know it.

Second: I feel that the transfer of this onerous debt burden from the most recent foolish investors to the tenants--regardless of the form it takes--will probably not work out well financially for any of us.

Unless some sort of subsidy from somewhere magically appears, I don't see how the net cost of owning can't materially exceed the current cost of renting--for most of us, that is.

The devil will be in the financial details...

Anonymous said...

This would be my plan for navigating the offer to "buy" our homes:

1. Hold out as a RS tenant to the bitter end.

2. When and if the RS laws part you from your home (may never happen), buy someone else's apartment on the open market. There will likely be literally thousands of them for sale by then.

The place will be so horribly over budget and in the hole, all of the would-be flippers will be ready to take anything to get the heck out.

If you lived here in the early 90's, you know that many people that bought into failed Co-op conversions were left with nothing at all but their proprietary lease and a barrel around their midriff. Don't think that can't happen here, too. It already happened to some of the "smartest people" in NYC real estate!

GETCARPETSTENANTS said...

Does anyone know if they're in talks already and if CW EVEN wants to sell us?

Stuy Town Reporter said...

As far as I know, not in talks and no response yet from CWCapital. The press conference was just the first salvo, more of a wake-up call to action, I think, than anything else.

Anonymous said...

Im betting they're not going to show any interest. Th3 3 billion will be too low for them to even discuss it.

Anonymous said...

Everything is for sale at the right price. We may not want to pay that price, however.

Anonymous said...

I won't even give this 'plan' another thought or worry. CW Capital will refuse it. Thanks but errrrr, no thanks!

I'm betting on it.

Anonymous said...

Manhattan is expensive. The lucky few with below-market stabilized units can live here. It isn't clear why they have that privilege and others of similar incomes don't. There's a real fairness problem with that... I'd welcome a new model that creates an affordable housing pool with our community that is a bit more fair than the current one, which basically has a "finders keepers" approach, regardless of income, ability to pay, etc.

That said, I'm not convinced that anybody "owes" me my below-market RS unit, even if most of my RS neighbors feel they're owed that deal for life. The level of entitlement is epic, and I think that's a big barrier to moving forward in any direction. Which ultimately is how this place ends up in a very bad situation.

Imagine this deal doesn't happen. CW settles the lawsuit. The value of the community continues to shrink based upon an even lower base of rents, and CW can't keep doing this indefinitely, so it chops things up and tries a fire sale. Buildings in groups of 3 or 4 get sold to a variety of landlords. Whatever economies of scale one gets from operating this place are trashed, and costs keep going up with rents held stable. One by one, the buyers again go under. Before long, the city steps in and puts the community into a program like section 8 to help stem the side. At that point, affordable is locked in, but we're a Project. There's no future upside, and no chance to make things better. Congrats, your below-market RS unit is going to have neighbors who make you long for the days of the NYU OMG girls.

There's gotta be a better option out there.

Anonymous said...

These people will use any diversion to get ours minds off the illegally zoned ice skating rink...and Holiday Tree yard.

Anonymous said...

Now Guterman is trying to get in on the act. The sharks are in the water because they smell blood and guess who will be their dinner? Us! I have no interest in buying my apartment. I will stay rent stabilized for as long as RS in in force and I wouldn't touch anything the TA, Garodnick, Brookfield or Guterman comes up with. Not even with a 10 foot pole!

Anonymous said...

2:07 pm. It's not that the rent stabilized rents are too low, it's that the market rate rents are too high.

Anonymous said...

@Anonymous December 2, 2011 2:07 PM

What the heck are you smoking ?

Anonymous said...

2:07,

The more CW suffers financially, the better off we will be in the long run--particularly if the goal is to become "owner-operators." Bringing the sale price down is a "good thing" as one famous person once said.

There's a limit to how much suffering they can inflict on us and I sense that we are at that point already. As an aside, did anyone notice that the new porter contract spreads one worker over 4 buildings instead of "just" 3?

Anonymous said...

For those that are wondering about RS apartments. First it's the law and was recently renewed for the next 5 years. This is also not the only community with RS. There are over a million apartments in the State covered by these laws. We need more not less affordable housing.

Anonymous said...

Well, the J51 program will only exist for another 4-5 years for most buildings. Can you imagine how fast they'll renew that deal?

Fed Up Tenant said...

From Crain's New York: Old Stuy Town suitor pops back in - Partnership of legendary apartment converter Gerald Guterman and Westwood Capital sends tenants a letter in hope of reviving a plan first broached last year.

Read more: http://www.crainsnewyork.com/article/20111202/REAL_ESTATE/111209965#ixzz1fQ9ve2nK

Anonymous said...

And now we're back in the Guter...

Anonymous said...

One porter spread over 4 buildings you say? All the more reason to chuck EVERYTHING non combustible and not glass down the garbage chute. Save these guys some work at least!

Anonymous said...

Actually, the J51 law expires the end of this month.

Anonymous said...

The Guterman-Westwood proposal seems great.

Where was our Tenants Association when it was received?

Probably focused on shutting down that evil Greenmarket.

Anonymous said...

I am paying $937.48 a month for my 2 bedroom 2 bath Peter Cooper apartment - why would I want anything else?

Crazy Eddie said...

Ya gotta love the “Winter Wonderland” banner background for the press conference. “For residents and their guests”. I don't think so, Homey don't play that game

Anonymous said...

Dear 10:34PM,

Turns out, you're the 1% in our little community. Inequity like that is why we're never going to get a deal, because tenants interests are so misaligned with each other, much less with any of the bidder. You probably just want to keep your boondoggle, even if your apartment is a festering hole. Others of us want a nicer place to live, and are paying more. Some of us are paying top dollar and won't be satisfied with anything CW can provide. And it's all one trough we're dining at. Recipe for disaster, I tell you.

Anonymous said...

I can't wait to see Carolyn Maloney blathering on stage today.

I'm sure she will tell us again - like she does every Tenants Association meeting - that her daughter is still on the waitlist for an apartment.

Anonymous said...

But, Eddie...it's for the childrens!

Anonymous said...

How come no one is reporting the robbery in 21 Stuyvesant Oval yesterday around 3 pm?
Man walks in to his apartment being robber by a man and a woman.
The perps were walking out of his apartment with his computer. The apartment renter was bitten by the women. Both the man and women peps were arrested by police. The male perp was (get this) the fedex delivery man.

Anonymous said...

FedEx hires lots of temporary staff for the holidays. I wonder if they get dental impressions of the seasonal people?

Anonymous said...

They are not reporting the 21 Oval robbery it because it really happened in Gramercy Park. You are just imagining that it is Stuyvesant Town. :)

Note that 21 Oval is right by the well guarded skating rink.

Stuy Town Reporter said...

Something to remember from an analysis done over a year ago, when Ackman was interested in the property:

From the NYTimes:

http://dealbook.nytimes.com/2010/08/13/ackman-lays-out-his-plan-for-stuyvesant-town/

If a large number of apartments are returned back to rent stabilization, Mr. Ackman would need the majority of Stuyvesant Town residents to buy their units for more than $300 a square foot. But while some tenants might see this as a good investment, others might not have the cash for a down payment, especially given the downturn in the economy — or their rents may be cheap enough that buying does not make sense.

With the average size of an apartment at Stuyvesant town’s being 911 square feet, according to Mr. Ackman, that would mean that if it sells at about $600 a square foot, which is well below market price, it would cost about $546,600. The buyer would need to put up nearly $110,000 cash for a 20 percent down payment. The monthly payment, with a 30-year fixed-rate mortgage at 6 percent, plus assuming $1,500 a month for maintenance and taxes, would total about $4,100 a month.

A 5 percent mortgage would bring that total monthly payment down to about $3,850, but that is still higher than market rents of about $3,000 a month for similar amount of space. (The rent-stabilized tenants pay probably half that amount.)

Based on those numbers, it looks as if tenants will be paying considerably more than their current rent to own at Stuyvesant Town, even factoring in tax savings. Many will probably choose to continue paying below-market rates (as in many cases, it would be below the maintenance costs), which will eat away at any profits made from the sale of free-market units.

Stuy Town Reporter said...

BTW, I'm assuming some readers did go to the meeting. The prospect for me to attend was too depressing, as I've been at these before and guessed what the spin would be. Any surprises?

Anonymous said...

APARTMENT INFORMATION
ST Apartments

Apts SF TTL SF
1BR 4,482 699 3,132,918
2BR 3,651 872 3,183,672
3BR 446 1,003 447,338
4/5BR 38 1,134 43,092
Total 8,617 6,807,020


PCV Apartments

Apts SF TTL SF
1BR 1,179 772 910,188
2BR 1,224 1,034 1,265,616
3BR 21 1,189 24,969
- - -
Total 2,424 2,200,773

Total 11,041 9,007,793

Operating expenses are about $150mm or $1.40 per square foot/month. OpEx includes maintenance & taxes.

Average cost per square foot for dorman condos in Manhattan runs $1.40 - $1.60. We, of course, have no doormen so you'd have to level out the comparison. I guess we pay more for porters to clean up dog poop and remove sun tan lotion on Ovel grass used by nonresidents.

Apartment count & Opex numbers come from 2009 audited statement. Discrepency in apartment count from official count probably due to TS mothballing apts at that time.

I disagree with a $700 psf valuation of apartments. I think $600 psf is a better market rate suggestion. Insider price would have to be no more than $4xx.00 for even the market rate renters to find appealing.

As an example, I live in a 1BR ST apartment. Square feet of my apartment is 699. Multiply it by $1.40 sf/month OpEx (comm, Hoa, call it what you like) and my charge is $978 monthly. Let's call my current rent $2,500 (close to actual). To 'break even' on a monthly expense my mortgage cannot exceed $300,000 (assuming 4.5% on a 30yr loan). I've not included value of mtge deduction or effect of annual RGB escalation. Nor have I included the opportunity cost of my money or probable additional expense of annual capital improvement. So $443 psf is about my breakeven.

Some people may argue that I gain upside potential of apartment value. But I'm planning on living here until I die so only math that works for me is monthly spend.

These are the numbers. How they're spun are matters left to the 'financial engineers'.

Anonymous said...

I went to the meeting. I believe that the fix is in. The pols fell all over themselves congratulating tenants with saving the middle class and affordability (did not define either). I think CW will accept the bid and the whole property will be converted. Out concilmember keeps trying to reassure those who will not buy that it is a non-evict conversion (which it will be ). Actually Brookfield will be owning those apts who are not bought and acknowledged in the only interesting question, that they will have the right to sell those apts to whoever they want. The RS tenant can stay but someone else can own the apt. Questions were collected on cards and obviously screened (none of my nine questions were addressed). You can kiss what's left of the middle class good-bye.

Anonymous said...

Listen to recording at stuy pcv apartment recently....


http://www.youtube.com/watch?v=umYsWyRmniU

Stuy Town Reporter said...

"The RS tenant can stay but someone else can own the apt."

Incredible.

As for questions being screened, I had the same impression when I went to the last meeting at Baruch. My question asked about the political donations our politicos receive from real estate concerns. Of course this question ignored.

Stuy Town Reporter said...

"Listen to recording at stuy pcv apartment recently...."

Yeah, I hear that crap too at times.

Anonymous said...

RE; youtube link=====

so, um, just a thought here..... why aren't there carpets installed? W.T.H?

Anonymous said...

Who says CW is suffering ? If they were suffering, wouldn't they lower rents on so many 'vacant' apartments?

Anonymous said...

Listen to recording at stuy pcv apartment recently...."

Yeah, I hear that crap too at times.

I hear that crap ALL THE TIME and mostly between 2 am and 6 am when the downstairs and upstairs dormies come home a-woo-hooing!

Anonymous said...

Yes, it's true that in a non-eviction conversion someone can buy a RS apartment that is already occupied by a tenant that does not want to buy. Then that person becomes the landlord of that tenant. That is quite common in converted buildings where older tenants cannot or do not want to buy the apartment. This whole deal is going to be a nightmare for those who do not wish to buy. You just have to hope you don't get someone who is abusive buy the apartment you live in. I deeply resent the TA and Sneaky Dan going behind our backs and cutting this deal with Brookfield (and Guterman would be just as bad). This is supposed to be affordable RENTAL housing. They have sold us out and I hope it comes back to bite them in the ass. None of the politicians involved will ever get my vote and the TA should disband and call itself the Owners Association. A lot of chicanery and self-serving going with this deal.

Anonymous said...

I would not worry nor get ourselves all in a tizzy. You actually think that they'll sell the property to us?

rofl.

Our new landlord will be even better than the last one. That will be the real nightmare.

We'll be wishing for tishman days again before too long.

Anonymous said...

I think there is going to be limited investor interest in buying RS apartments with low rents inhabited by reasonably young, healthy tenants (define that metric on your own, please). In this environment, few people are going to want to pay to service a $4k/month obligation while collecting half that or even less in rent.

If your tenant lives even ten years before moving or dying, you're in the hole at least a quarter mil. Then you have to re-renovate the apartment before you can resell it. And the you are competing with 11,000 other comparable properties.

Maybe that formula works for the most desirable units (again, please use your own imagination as to what constitutes desirable) but probably not for all of them. You're going to have a hard time flipping units along Ave C & on far East 14th. Location, location, location...

Anonymous said...

Do you guys like anything? EVERY post is a complaint.

Stuy Town Reporter said...

I like seeing little children laughing in the ice rink.

Anonymous said...

"Do you guys like anything? EVERY post is a complaint."

Do we really need a public forum to praise a management company hell-bent on destroying our community?

No.

That's why you hear so many complaints here.

Now go back out there and use your season pass to skate on the ice puddle...

Lux Living said...

"every post is a complaint"

For a while I balanced the content on Stuy Town Living and you know what? The content considered positive was all but ignored. So why should I, or STR, spend our time creating it? Quality of life issues, the potential sale of the property, recent crime, to name a few, these are the topics people are interested in. It's news.

Anonymous said...

Certainly a forum could be created where ST/PCV residents would participate on a strictly positive note, talk about their ice skating party or their brunch get together at Oval Lounge, but THESE forums were created out of the sense of outrage and frustration that many residents developed after the sale of the property to Tishman-Speyer.

You see, where there was a wonderful, stable and affordable community, the greed of MetLife's executives and stockholders, along with Tishman-Speyer's comparable quest for even more billions of dollars in profit led the residents of ST/PCV into a situation where it appears that everything that they enjoyed since the end of World War II has come to an insurmountable end.

Even if the complex is converted to tenant ownership, it will be a huge task to return it to a standard of quality living that residents had previously enjoyed because unfortunately, the quest for riches has created a situation that will take many, many years to correct. The same rent stabilization laws that protect tenants will also protect those negative things (like pressure walls and dogs) that have changed the character of our community for the worse.

And be very careful of these offers to "help" the residents purchase their homes. So far, I've heard these "benevolent" real estate companies say that they want to keep the commercial space and garage profits for themselves, but I caution you that those profits have helped to offset operating income for all these years, and when that disappears, the cost of maintaining the property will then come directly from tenants pockets. I suggest that at a minimum, any deal struck should limit the management company to a percentage share, with the rest earmarked for the maintenance and operation of the property.

Anonymous said...

http://www.nydailynews.com/new-york/zuccotti-park-owners-brookfied-properties-owe-city-139g-back-taxes-article-1.986720

Anonymous said...

>>The same rent stabilization laws that protect tenants will also protect those negative things (like pressure walls and dogs)>>

Now that’s just "crazy talk".!

Wait until new individual condo owners are hit with ever escalating maintenance charges due to years and years of maintenance neglect, poor quality materials that were used, and lowest bid contractors.
The new condo owners (your friends and neighbors (hahaha)) will be yelling, screaming and demanding MCI’s so the “renters” can pay for the much needed and necessary maintenance. You thought that there were a lot of MCI’s under the previous regime, just wait!
The new individual condo owners will now take on the role of “Met Life, Tishman Speyer , CW, and Rose”, all rolled into one.
The new condo owners will now be the ones holding the feet of the remaining “renters” to the fire.
This has failure, in-fighting, neighbor against neighbor, endless litigation written all over this plan.
Good luck with this!

Anonymous said...

Funny how things work out!
Anyone else taking notice that the Food Trucks in the Oval, and the Ice Skating Rink are looking better and better?
Now that they may be a source of income for the new condo owners.
And so it begins.

Anonymous said...

Commenter at 12:23 pm: You raise some very, very good points, especially the last one about the profits from the commercial enterprises. Thank you.

Anonymous said...

As a rent stabilized tenant, I wish I had not been suckered into paying my annual dues to the so-called Tenants Association. They don't represent me anymore. They are destroying rent stabilization by teaming up with these sleazy pols and moneymongers to take this development out of the affordable housing stock. Thanks for nothing TA. Nothing more than a bunch of sleazeballs.

Anonymous said...

It's ironic that the TA's ugly, Leninist-looking logo (it just needs a hammer and sickle!) says "Unity." The TA is doing anything BUT bringing unity to the tenants. They are going to unequally divide and tear us apart.

Anonymous said...

is it just me or does the guy from Brookfield look totally bored and disinterested during these conferences?

Stuy Town Reporter said...

"Anyone else taking notice that the Food Trucks in the Oval, and the Ice Skating Rink are looking better and better?"

Not the food trucks, certainly. The ice skating rink I don't mind, as it's fairly noise free and "for the children."

Anonymous said...

STR, With all due respect I think you missed my point.
>>Anyone else taking notice that the Food Trucks in the Oval, and the Ice Skating Rink are looking better and better?<<
I ment, they are looking better to the tennants who want to buy their apartment. It will be one more source of income to offset the ever increasing maintenance charges. This place is held together with spit and glue.

Stuy Town Reporter said...

Got it! Thanks.

Anonymous said...

When the TA held elections for new board members, I went to the meet-and-greet they held at the senior citizens lounge. I asked candidates why they wanted to be on the board. Some didn't have a whole lot to say for themselves. Others were clear that they wanted to convert the place (in conversation and in their printed descriptions). I made a point of not voting for those individuals but they were elected anyway. Unfortunately, too many of us are content not to take action and complain after the fact. In a way, we've gotten the TA we deserve because most people didn't bother to participate when it could have made a difference, and individuals with strong opinions took action to get what they wanted.

maxschactman said...

The development can be bought by the residents or sold to yet another self serving big name landlord.
Those are the only two options.

Regardless where one stands on the middle class aspect of the community it is clearly better off in the hands of those who live here rather than another landlord who will do whatever he can to jack rents as quickly as possible.

Buyers will get their apts. for 10%down or roughly 30-45K - and total mortgage/maintenance fees combined between at roughly 1600 and 2200.

Like the Tudor City Co-op conversion regulated renters should benefit even if they don't buy.MCI increases will be included in the purchase and should come off rents once the community is bought providing a modest reduction in monthly rents.

The community will be well maintained [as is Tudor City and the Grand St. Co-ops] because resident owners want to keep the property values up.

As to the middle class aspect over time that is probably doomed.Regulated rents will continue to increase,every year,by law.As old tenants leave and the 10% new tenant increase is applied along with annual increases all apts. will soon rent for over 2K.That problem is simply built into the existing rent regulated law and is not going to be changed.

So,we either buy our community and create some stability or another landlord will push it towards upper middle class rents as fast as he can.With deregulated apts. renting for 3-4K per month we're already half way there.

It would be wonderful if the community could have remained low rent forever,but that option is simply not realistic,financially or legally.So - it's going to change.Better it be changed by the tenants rather than another greedy,self serving landlord.

Stuy Town Reporter said...

I have a plan. I will introduce it soon.

Anonymous said...

I hope your plan is better than the speculative and shallow analysis you did to start the string.

Anonymous said...

Max,

Wouldn't the tenants become the next greedy,self serving landlord? Wouldn't they want to raise rents as swiftly as possible in order to save themselves from carrying the rent stabilized people? This is the same argument you posted 5 years ago. It didnt make sense then and it doesnt make sense now.

Stuy Town Reporter said...

My plan is amazing. Trust me.

Stuy Town Reporter said...

Unfortunately, my plan will greatly disappoint speculators and those who wish RS status out the window--or who predict it--for the purpose of making the TA plan look promising.

Anonymous said...

Max is full of "schact."

STR, I'd be willing to sign up for your plan, sight unseen--even if you did formulate it in secret, out of sight of tenants and perhaps even in your own best interests. That puts you on no worse footing than the TA!

Anonymous said...

From a legal standpoint, does the TA have the "power" to make and sign deals for all the tennants?

Stuy Town Reporter said...

No. The TA has to pass their plan to tenants first.

Anonymous said...

Max: Some of your numbers are incorrect. The vacancy allowance is 20% and the new rent law says it can be applied only once a year. The new threshold for luxury decontrol is $2,500 (in combination with income).

One point that was made at Saturday's meeting is that the ultimate owner of an apartment occupied by an RS tenant may end up losing money due to MCI and other expenses (I didn't catch exactly why).

The TA is planning to have building meetings and solicit input from everybody, so be prepared.

Anonymous said...

You write: "if you are a tenant who cannot afford to pay for, or get a mortgage for, whatever the final asking price will be, or if you don't see any value in paying so much money when you are in a rent stabilized situation, then you will be against the deal." Why should a rent stabilized tenant be "against the deal." There is no downside to the conversion for rent stabilized tenants.