[CraigRo]

So many people here do not know the details of NYC rent regulation, and are posting generalizations and falsehoods.

Basically, you cannot raise rents aside from annual increases that are below inflation, and you are limited to a relatively small amount of renovations, and cannot increase the rents much if you do.

So you either commit to a potentially multi lifetime below market tenancy that will bankrupt you eventually, or you keep it vacant and hope to demolish it or combine units or pray that the law will change.

Or sell it to a guy who will run air bnbs until the city puts him out of business at which point it will go in the tax lien sale. In any event, nobody is investing in bringing these units back online in this legislative environment.

[Renaud]

But isn’t this only true if you want to profit from the property?

What about you buy the property for you and your family to live in rather than as an investment that needs high return?

The property value will still increase with time. That should offer some form of protection for the initial capital investment if you need to sell later in life.

[djbebs]

Buying it for you and your family to live in *is* an investment.

The only thing you're doing when prioritizing that type of investment over others is you're picking winners and losers for political reasons... at great cost to everyone else.

[refurb]

If they are multi-tenancy buildings, then you need to buy the entire building, do a TOC or make a co-op.

They aren’t individually purchasable units.

[cm2187]

What other purpose than investment would a rental apartment have to the owner?

[Gigachad]

Likely the people renting these apartments couldn’t afford to buy at almost any price.

A much more logical system would be for the government to raise minimum wage and welfare to the point that people can afford rentals at the market rate rather than rent control which is a head in sand solution.

[zajio1am]

> But isn’t this only true if you want to profit from the property?

You have implicit profit living in your property through imputed rent.

[y7]

> below market tenancy that will bankrupt you eventually

Why would pricing the rent lower than the insane market prices cause bankruptcy for the owner?

[anonymoushn]

The owner rents the property from the government at prices that are not capped below inflation. This is called property tax.

[bamboozled]

So it’s the governments fault for protecting people from predatory rent hikes?

[Eisenstein]

The current implementation seems to be causing an issue where it is not in the landlord's interest to offer the units to the market. It is the regulation's fault for creating disincentives for the landlord, so it depends on how you allocate blame for making a judgement based on that.

That doesn't mean we shouldn't try, or that we need to stick to a counterproductive plan because some people think arguing about regulations on free markets is more important than fixing a pressing problem.

[Gigachad]

Rent control is about as useful as solving climate change by drawing a lower number on the screen of the thermometer.

Rents are a product of market conditions. You have to solve those conditions rather than try to stop the output from changing. Fixing the rent results in supply dropping off so the supply/demand equation is still met.

[Ekaros]

They are not predatory. They are entirely market based. Why shouldn't companies be allowed to charge whatever is the market price? Or maybe in general we should start applying price controls to absolutely everything. Let's say only ever allow 5% net profit on any good or service.

[pjscott]

Unintended consequences may not be obvious when you first hear what a law is meant to do, but sometimes they really, really matter.

[cm2187]

Any time you apply artificial price controls you create scarcity. Ask Venezuelans. The same bad policies are applied over and over with the same effects.

[cuteboy19]

Is it the government's fault that people raised their own cobras to claim the cobra-killing bounty?

[throwawaysleep]

Yes. As the rent hikes are so low that it is better not to rent at all.

[sofixa]

Why would it bankrupt you? "Rent stabilization" is in place in the big French metropolises (a landlord can only increase rents at a specific rate at specific intervals) and there's no shortage od landlords due to compensating policies encouraging building.