IN the often desperate hunt for an affordable place to live in Manhattan, the rent-stabilized apartment retains a strong hold on the imagination. It is so hard to find one that newcomers may think they have gone the way of subway tokens and Automats.
But even in Manhattan, nearly half of all rental apartments are rent-stabilized. And last year, lawmakers in Albany strengthened protections for tenants, raising the rent ceiling to $2,500 a month from $2,000 before an apartment can be deregulated, and the annual income limit to $200,000 from $175,000. In Manhattan, the new rules affect nearly 250,000 apartments.
Those rules mean that rent-stabilized apartments may be even more difficult to come by as people stay in them longer. What with the overall rental vacancy rate of about 1 percent in Manhattan, when one does come up for lease, prospective tenants are likely to discover themselves facing nearly the same level of scrutiny as condo or co-op buyers, agents say.
The appeal of a rent-stabilized unit is obvious. Landlords of stabilized units are allowed to raise the rent by only a few percentage points, as determined by the city’s Rent Guidelines Board. Tenants do not have to move out until their income tops the state limit.
And in Manhattan, the price gap between a rent-stabilized and a market-rate unit has never been greater, according to a study released this spring by the Furman Center for Real Estate and Urban Policy at New York University.
Even before the spike in market-rate rents over the past year, rent-stabilized rates were, on average, $1,245 a month cheaper.
“The competition for a $4,000 one-bedroom is now fierce,” said Yuval Greenblatt, a vice president of Prudential Douglas Elliman. “So you can imagine how strong competition is for something below market value.”
The study also found that, despite the widespread impression that stabilized apartments are meant to provide affordable housing (and they certainly keep housing prices stable for hundreds of thousands of people), many of those fortunate enough to land one in recent years have been relatively well off.
Whereas the median income of all renters of stabilized apartments in the Manhattan core — defined as below 96th Street — is $57,780, the median income of those moving in in recent years is closer to the average Manhattan income of about $100,000, said Vicki L. Been, the director of the Furman Center.
“Some people who enjoy the benefits of rent stabilization are not low-income households,” the report revealed.
In New York City outside of core Manhattan, the difference is less pronounced, the study found. There, the average stabilized rent is $250 cheaper than the market rate. And the median income of stabilized tenants is $8,000 below that of market-rate ones; south of 96th Street, the income difference is much greater.
Finding a stabilized apartment remains a challenge. The city’s Department of Housing Preservation and Development has a list of all the buildings that have at least some stabilized apartments, but it provides no data on how many of the apartments in the building are regulated and how many are market-rate. It is also not a listing service.
And as for the city’s major brokerages, few if any keep track of stabilized units.
“I have people all the time who come to me and ask me to find them a rent-stabilized apartment,” said Alexis Fleming, a broker at Citi Habitats. “I tell them good luck. It is a needle in a haystack.”
In seven years, she said, she has rented just seven stabilized apartments.
For those fortunate enough to come upon one, that may be just the beginning of the struggle. Potential renters are likely to face stiffer competition than ever as landlords sort through well-qualified bidders.
Jack Freund, the executive vice president of the Rent Stabilization Association, which represents 25,000 landlords and property owners, says it is in the interest of landlords to be even more selective than market-rate landlords.
“In the free market, you get a tenant in, and if it turns out bad, you simply do not renew that lease,” he said. “As a rent-regulated landlord, the owner does not have that option.”
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