Struggling Landlords Leaving Repairs Undone

[Liberal_in_LA]

Source: New York Times

As property owners run into trouble paying their mortgages, neighborhoods around New York City have been witnessing a disturbing consequence: Small and large apartment buildings are being abandoned in a state of disrepair, leaving tenants in limbo without basic services or even landlords.

In the Bronx, anybody can walk into a four-story building on East 178th Street near the Cross-Bronx Expressway. Someone took the front door off the hinges and sold it for scrap metal. Drugs have been sold out of vacant apartments.

“A nightmare,” said Cesar Guzman, 29, who lives in the building. “I can’t describe it as anything else.”

In Brooklyn, a woman at 76 Newport Street said the landlord disappeared this year and stopped collecting rent, so she stopped paying it. A 19-year-old man in Apartment 1F has become the unofficial superintendent, sealing holes in ceilings with cardboard and duct tape.

==================

Many of these overleveraged buildings — the agency does not have precise numbers — are made up of low-income tenants in rent-regulated or subsidized apartments. International developers and private equity firms have borrowed hundreds of millions of dollars to buy buildings with rent-regulated units in the belief that they could profit by replacing existing residents with higher-paying ones, a trend tenant advocates call predatory equity.



Read more: http://www.nytimes.com/2009/07/15/nyregion/15buildings.html?ref=nyregion

[babylonsister]

1. Makes me wonder about the landlords. nt

[Rex]

2. Great, just what we needed.

The economy is rebounding! Series!

[Alamuti Lotus]

3. "Really Really Free" Free Market Capitalism at its best

[KT2000]

6. Good Point

when everyone puts there own interests first, everything works out for the best.

[customerserviceguy]

9. Not to defend the slumlords in any way

but rent control is not free market capitalism. It produces distortions in what a true free market would do. Sometimes this is the result.

[lindisfarne]

12. And your explanation for when landlords in the free market do this? n/t

[WriteDown]

15. Having lived in NYC, this is nothing new....

Rent control tends to have 1 of 2 effects. Either the landlord stops making repairs because the rent coming in is well below the market value, or the landlord gets money under the table to "supplement" the rent being paid. Sometimes both.

[customerserviceguy]

18. In that case, they're just being really lousy businesspeople

I used to do taxes for people who owned rental property, and they knew that if they let their places deteriorate, they would only attract tenants who would be spotty about paying rent. To keep quality tenants, you have to keep the place up.

Maybe really big businesses can treat their customers like shit over and over and get away with it, but small businesses usually figure out that if they won't take care of the customer, somebody else will.

[AlecBGreen]

19. "To keep quality tenants, you have to keep the place up."

:nod: There are two types of landlords. Ones who just collect the money every month and say to hell with any maintenance, and ones who keep the property in good condition and try to attract higher-rent-paying tenants. All things being equal, the 2nd should do better b/c the higher-rent-paying tenants tend to stick around longer and dont try ditching out after getting 3 months behind.

[sarcasmo]

21. More evidence that we are not #1 at much of anything except starting War.

And buying cheap crap.

[Libertas1776]

4. Scumlords all over the city

weren't doing nothing when the economy was booming either...Now, they have an "excuse." :sarcasm:

[sofa king]

5. As opposed to "Well-to-do Landlords Leave Repairs Undone."

Which was the headline for the fifty years before this one.

[Journeyman]

7. "Predatory equity." A fitting epithet for a failed system. . .

[Name removed]

8. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Speciesamused]

10. EXactly...I feel ya.

There has been no change in slum lord tactics through
the ages. If it touches their bottom line they will drop it
like the plague. There have never been any renters rights.
Sad state of affairs this country is in.
The haves and have nots. No change.
Enjoy the show folks.

[Odin2005]

11. WTF? Un-fucking-real.

[TrogL]

13. Looks like my ex-wife's place

...except for the hole in the ceiling.

[WriteDown]

14. Rent control is an economic nightmare....

Much like price controls.

[Zorra]

16. Might not need need rent control if it weren't for nightmare inducing Real Estate speculators.

When people are priced out of being able to afford a place to live because the cost of housing is artificially inflated through speculation, they still need to live somewhere. Our economic system could not run with a homeless labor force.

Real estate speculation raises prices, concerns
6/20/2005 3:17 PM
WASHINGTON (AP)
snip---
In congressional testimony, Greenspan said it appears unlikely that a national housing bubble will develop and pop, sending prices tumbling. At the same time, he said, "There do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels."

House prices nationwide rose 12.5% over the 12 months ending March 31, according to figures compiled by the Office of Federal Housing Enterprise Oversight.

During that period, Nevada posted the biggest increase, 31.2%. California ranked second with a gain of 25.4%, followed by Hawaii, with a 24.4% increase, the District of Columbia, with a 22.2% rise, and Florida, with 21.4%.

"Speculative activity may have had a greater role in generating the recent price increases than it has customarily had in the past," Greenspan said. He said a big part of the quickening pace of home turnover may reflect the purchase of second homes — either for investment or vacation.

http://www.usatoday.com/money/perfi/housing/2005-06-20-high-real-estate_x.htm

This paragraph is so ludicrous I had to post it twice:

In congressional testimony, Greenspan said it appears unlikely that a national housing bubble will develop and pop, sending prices tumbling. At the same time, he said, "There do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels."

[WriteDown]

17. As you probably know...

NYC has always had incredibly expensive real estate. The speculation trend is new thouhg. Price controls are Nixonian.

[high density]

20. "the landlord disappeared this year and stopped collecting rent"

That is a probably a good sign that it is time to find a different building to live in.

I love Chuck Schumer's non-logic that this is somehow Fannie Mae's fault. Ocelot set it in motion with their bad speculation. Deutsche Bank Berkshire Mortgage continued it when it sold Fannie Mae non-conforming loans. Is he going to blame Visa if somebody buys a gun on a credit card and shoots somebody with it?