text:
The truth about a complex built for veterans and the middle class and how it has evolved through the years to become one of the more interesting and controversial of New York stories.
Comment Policy
Management has two priorities: 1) Making sure money is made, hence upgrading and filling up apartments is their goal. "Amenities" are important in selling the place, though few residents use them. 2) If someone needs medical attention, Public Safety will be there, if alerted.
Quality of life issues are not that important, however. Things like the carpet rule or outsider dogs. These "rules" tend to be ignored, on purpose it seems. So you will see a lot that isn't taken care of properly, and complaints will be met with a creative excuse and a smile.
"Peace and quiet" must be a cruel joke, though this property is sold that way. There can be no peace and quiet as ALL apartments must be upgraded, which includes the installation of an AC unit below the window. Aside from the continual construction about the neighborhood, there is a new and noisy subway extension being built along East 14 st and the shut down of the L line. "Choosing" to live in NYC, now the newest mantra, is a fabrication when the talk is of ST and PCV, which was traditionally quiet, with no construction noise.
Though money was always important, it is now more important than ever. Money rules many things, as you will find.
About those "club cars" we see going this way and that way, and outside of Stuy Town or Peter Cooper Village:
Friday, October 1, 2010
Condo or Co-op - The Fall of Stuyvesant Town/Peter Cooper Village as We Know It?
There have been so many things written and said about the future of Stuyvesant Town and Peter Cooper Village and the possibility of the complex being turned into tenant-owned condos or co-ops, that I thought it best to have a central clearing house post (that can be bumped up to top position when warranted) to explain and debate what is going on and what the future may hold. At the outset, I must underline that I have no background in real estate, so some of this is as confusing to me as it may be to you. But that's the purpose of this post--to seek and make clarity on an issue that affects most of the tenants here.
I say most, because there is a significant transitory student population here for whom the issue of conversion or no conversion has little or no interest. It should be stressed that this transient population benefits the owner who can easily use these student apartments for self-serving purposes, unless there exist some long-term contracts with the colleges and universities who rent out these units, which I doubt. That's why Tishman Speyer loved students and actively sought to get them into the complex. These students are a chunk of the population here that is in the "owner column," as far as what can be done with their apartments. And these students certainly have no interest in joining tenants battles against the owner. They are just here to use the grounds and the rooms and then, after a year, they are gone. Perfect for an owner who wishes to raise rents on apartments and not get into trouble with long-term tenants.
Anyway, I'll be adding pertinent material to this post in the coming week and even weeks on the fate of this complex.
To start off, let me state that I am seeing another "divide and conquer" issue arising very fast with the possibility of tenants owning their own apartments. The tenants who opt for conversion will join now the investors who will own the complex, and so for them, rent-stabilized tenants will become an annoyance and a burden. Simply put, the condo or co-op tenants will begin to start thinking of rent stabilized tenants as leeches who are, at the very least, not paying for maintenance while they are. And I believe maintenance fees for this place are going to getting higher and higher, considering how old it is and how much it has fallen into disrepair and ugliness in the last year or so. Any new improvements will also be a financial burden on the conversion tenants, who will now, along with the owner or owners of Stuy Town/PCV, be for capital improvement rent raises whereas before conversion, they would have been against. These conversion tenants will also have no interest in pro-tenant rent laws, as they would see that the best relief for them, from their own financial burden, would be to have everyone own an apartment here or pay higher market rates for one.
So, it seems very obvious to me that the conversion idea contains the seed of disunity--even hatred between the two classes established: conversion tenants (now owners of their apartments) and rent-stabilized tenants.
The fact that the ST/PCV Tenant Association is actively pursuing a condo or co-op conversion (at this point it is undecided which) means that if conversion succeeds, the Tenant Association will have difficulty in being "fair and balanced" and may not work toward keeping and strengthening tenant laws.
107 comments:
stuyvesant town is converting to co-op/condo?
- October 1, 2010 at 5:17 PM
- Stuy Town Reporter said...
Not yet. And maybe never. But that's been the push from a number of people, including the Tenants Association and Dan Garodnick. Obviously, they will affirm when they see the final paperwork, and then the tenants will have a say.
- October 1, 2010 at 6:27 PM
Those of us who are firmly opposed to converstion to Co-Op or Condo must firmly stand together and fight these threats to our homes. The TA and Garodnick are certainly NOT our friends!
- October 1, 2010 at 6:56 PM
Thank you for this wonderful blog, STR. I am a senior citizen living in a rent stabilized apartment in Stuyvesant Town and no way could I afford to buy my apartment. I will fight tooth and nail to keep my home at an affordable rent. I don't care if I am called a leech. parasite, freeloader, etc. Just don't call me too late for dinner!
God bless you STR and God damn those who would seek to gouge us and drive us out of our beloved homes. As for the Tenants Association, don't trust them an inch these days.
- October 1, 2010 at 9:52 PM
When you buy or sell a co-op or condo I think that the type of neighbors you have are taken into consideration. I love my apartment and have been in it for 30 very happy years. Until recently! The apartment (one bedroom) immediately under me and the one underneath that have been chopped up and rented to twenty-somethings or students. Every morning between 1 am and 4:40 am I hear "the girls" downstairs come home sounding like elephants in high-heeled boots, then in order to go to bed they have to hammer something into place! Don't know what it is, but it must be something to do with their sleeping arrangements! The dudes in the apartment underneath them also have to hammer or thump something into place before they go to bed, but the sound is a bit more muted as they are two floors down. I'd love to know what this bit of construction work is that is necessary before these people in the pressure wall apartments have to do. It's very annoying and I think it reduces the value of my apartment a great deal! By the way, Management (if you can call them that) are very unsympathetic. They say call security. What a joke! It only takes the elephant girls and the dudes a few minutes to thump into place whatever it is (what a mystery this thing is!), but by then I and probably several other long-suffering tenants are wide awake and pissed! There wouldn't be time to get security over to hear it. Oh my! I don't think I'll buy, thank you. Not if the neighbors come with the deal!
- October 3, 2010 at 11:05 AM
- Stuy Town Reporter said...
You know, I believe I've also heard this late night hammering some time ago. I think you are right in supposing it has to do with sleeping arrangements. But just what is the question.
- October 3, 2010 at 1:23 PM
Thank you STR. I never heard this kind of thumping/hammering before the pressure wall arrangements existed. It's not the type of hammering you will hear when someone is hanging pictures; no, it's a series of several loud, sleep-shattering thumps, then all goes quiet. What a mystery! Anybody out there have any ideas as to what it might be?
- October 3, 2010 at 2:15 PM
The TA is trying to rally tenants today and the emphasis seems to be on having the opportunity to buy the units. They certainly don't seem interested in those of us who want to rent. I see no reason to support this organization any more.
It certainly doesn't represent my interests as a tenant who simply wishes to rent and wants to see the RS laws renewed and strengthened.
- October 4, 2010 at 8:50 AM
The Tenants Association should change their name to the Buyers Association and get it over with so we can start to plan for their replacements!
- October 4, 2010 at 10:24 AM
By 2030, NYC will have 1.5 million new people and need affordable housing for many of them. TS's failure proves that PCVST is not "luxury living."
I've heard nothing but lip service from TA about affordable housing. I'm starting to agree with STR and others that this is about getting in on a land grab, pure and simple.
- October 4, 2010 at 3:46 PM
This whole thing will be one giant boondoggle with more potential inequities and catch-22's than anyone can predict.
You won't get dogs out of here for 15 - 20 years unless Stabilization is eliminated and everything left goes market rate (co-op, rental, condo or whatever).
The development will continue to be forced to keep market rate rental apartments which in simple terms means that the dorms will stay because they need the rent roll to support maintenance. That means the pressure to continue to let everyone do whatever they want (let the rest of the community be dammed) will continue.
I'm almost ready to eat my hat on this one if I'm wrong, but I think everyone is looking at the TA and Garodnick and praying for some sort of magical solution. I think they'd have better luck watching someone pull a rabbit out of a hat.
It's 3 BILLION dollars folks. It ain't magic.
- October 4, 2010 at 6:45 PM
Assume we do not convert. How can we compel the new owner to keep the complex "affordable" over time (permanently)? What would be done with the significant number of apartments which are already earning market rate rents?
Incidentally, what is considered "affordable"?
- October 4, 2010 at 6:47 PM
- Stuy Town Reporter said...
I know what affordable means to me, but that's based on what I make each year, and I'm sure a lot of people consider it that way, too. When we start talking about rents higher than 2K per month, then I think we start advancing toward unaffordable, unless you want to pack in some students into your apartment to help you pay the rent. I'd say for sure 3.5K and up would be unfordable for most rent stabilized tenants here.
The only way a new owner can be convinced to keep apartments "affordable" is through a legal squeeze. That's why the focus should be on maintaining and strengthening tenant protections and laws. Instead, some people are ready to throw in the towel and accept something which may be a poor substitute.
Unless we have a lot of millionaires living here, I don't yet see how getting a condo or co-op will NOT put a strain on most people's financial resources. 10% down on the "insider price," then a heavy mortgage on the rest (let's say over 500K), AND maintenance fees payable every month that will probably match if not exceed one's normal rent.
- October 4, 2010 at 7:04 PM
STR, you are the only one who speaks any sense! Thank you!
- October 4, 2010 at 9:09 PM
- Stuy Town Reporter said...
Certainly not the only!
- October 4, 2010 at 11:17 PM
I was interested in the posts about the strange hammering and thumping that seems to be a nightly ritual of the transients and students. We hear it almost every night since we've had frats upstairs and 20-somethings sharing downstairs. Maybe it's a bit of Ikea that has to be put together before they can sleep! Whatever it is, it's a bloody nuisance! We never heard that kind of nightly commotion when we had real tenants as neighbors. Very strange!
- October 5, 2010 at 8:35 AM
- Peter said...
In a co-op or condo conversion, I don't see how the debt won't be passed on to buyers, whether insiders or newcomers.
For example, The Lenox up in Harlem is a nice building with good apartments. While one can buy a nice $400K 2-bedroom with 10% down, the maintenance is over $2K a month because of 4 underlying mortgages. That is NOT my definition of affordable!
- October 5, 2010 at 2:08 PM
The apartment above me was turned into an illegal 4 bedroom (was a 2 bedroom). I notified Tishman Speyer and the TA in June 2009. To this day nothing has been done. I do not get the banging sound that others mentioned, instead I hear them sliding furniture all over the place (they don't have rugs). It is quite a racket each night and I have had enough and I have contacted the DOB and FDNY!
The Tenants Association is useless unless you are interested in buying your apartment. For all other purposes they are useless and should be REPLACED!!!!!!
- October 5, 2010 at 3:30 PM
There are a lot of false rumours abound about the possible co-op conversion.
It would be a NON-EVICTION CONVERSION,similar to the co-op conversion at Tudor City in 1990.All tenants who want to remain in rent regulated apartments will see no change to their status.
But based on the Gerald Guterman plan [the likely winner] those who choose to buy can do so for less than 300 per. sq. ft.
The problem with our reps is they are trying to force unrealistic "affordable housing" provisos into the plan that will only serve to dissuade buyers and sink the whole plan.
"Affordable housing" in ST/PCV is a myth.Regualted tenants are now paying 18-25K a year in rent.A family of four needs an income of near six figures to afford that.
Meanwhile regulated rents will continue to rise EVERY YEAR while market rates have actually been declining.Soon enough they will be equal and that will be the de facto end of rent regulation n ST/PCV.
The co-op conversion plan offers ST/PCV tenants a once in a lifetime opportunity to greatly improve their financial condition and FREEZE monthly costs for decades to come.
If Garodnick and the TA screw up this deal by plying affordable housing fantasies tenants will be burning mad about the lost opportunity.
- October 13, 2010 at 6:04 PM
- maxschactman said...
There are a LOT of false rumours going around about the possible co-op conversion.
LISTEN UP - It's a NON-EVICTION PLAN,like the one implemented so successfully at Tudor City in 1990.Anyone who wants to remain rent regulated will see NO CHANGE in their status.
But based on the Gerald Guterman plan[the likely winner] those who wish to buy will be allowed to do so for under 300 pr. sq. ft.
The problem with our reps is they are hell bent to jam fantasy "affordable housing" provisos into the Guterman plan that will only serve to dissuade buyers and wreck the whole plan.
Affordable housing in ST/PCV is a MYTH.Regulated renters are already paying 18-25K a year with nothing to look forward to but never ending annual increases.Meanwhile market rates have been declining.Soon enough the two levels will be equalized and that will mean the de facto end of rent regulation in ST/PCV.Even if the law is changed to increase the deregulation threshold it makes no difference.A family of four with 25K in rent needs a six figure income - goodbye middle class housing!
But the Guterman plan offers our residents aonce in a lifetime chance to greatly improve their financial circumstances and FREEZE monthly costs for decades to come.In other words,a co-op conversion is the ONLY WAY to keep ST/PCV affordable for thousands of our working families.Without a conversion we will soon see rising REGULATED rents become so unaffordable we'll start losing working family and senior residents,only to be replaced by higher income residents.
If Gardonick and the TA keep messing with the Guterman plan by peddling unrealistic affordable housing fantasies they wreck this opportunity and tenants will be a BURNING MAD.
- October 13, 2010 at 6:22 PM
- Stuy Town Reporter said...
The co-op conversion plan offers ST/PCV tenants a once in a lifetime opportunity to greatly improve their financial condition and FREEZE monthly costs for decades to come.
For decades to come??? And who pays for increasing maintenance costs? Who pays for increasing major capital improvements? For tearing down the buildings (which will happen) to build new high-rises?
- October 14, 2010 at 6:23 AM
Every apartment that is bought by a tenant is another apartment that is taken out of the rent stabilization stock in NY. If the buyers association (formerly known as the tenants association) and Garodnick, Maloney, Kavanaugh and Stringer's plan goes through it will be the end of rent stabilization in NY.
I find it ironic (but not funny) that 4 Democrats and an association that once led the fight to save rent stabilization are now the people responsible for it's demise. Soon, Manhattan will be the exclusive playground to the rich with pockets of poor sprinkled about in projects simply to assauge the guilt felt by Dan Garodnick, Carolyn Maloney, Brian Kavanaugh and Scott Stringer for displacing tens of thousands of middle class residents. I wonder how much each of these politicians took from the real estate lobby to make this happen. I am pretty sure Dan Garodnick and the board members of the buyers association are going to get pretty sweet deals for selling out the overwhelming majority who have zero interest in buying in PCV or ST. A new tenants association is needed to replace the buyers association and new politicians are needed to replace Dan Garodnick, Carolyn Maloney, Brian Kavanaugh and Scott Stringer. Call the buyers association at 866-290-9036 to register your disdain for this plan and remember to vote out those who would be responsible for throwing the middle class out of Manhattan. Watch the Town and Village newspaper for news about a "new and improved" tenants association that is coming together to stand up against the real estate lobby, the crooked politicians and apparently the new buyers association.
- October 14, 2010 at 1:47 PM
- Stuy Town Reporter said...
Every apartment that is bought by a tenant is another apartment that is taken out of the rent stabilization stock in NY. If the buyers association (formerly known as the tenants association) and Garodnick, Maloney, Kavanaugh and Stringer's plan goes through it will be the end of rent stabilization in NY.
That's exactly the point. Stringer, as I noted in the posting about the Empire State Building, gets loads of money from real estate concerns. Why?
- October 14, 2010 at 5:07 PM
Whats the plan in a no conversion scenario? A new owner waits out the J-51 rs tenants and makes their money by having a majority market rate rental property post 2017/2020? I guess thats a solution that will benefit both pre-roberts decision tenants and the right investor.
- October 14, 2010 at 5:41 PM
I am a long time ST tenant, not quite a senior citizen but getting there! There is no way in this world that I could ever buy my apartment. I just don't make that kind of money and can just about make the rent, groceries and a monthly MetroCard! I feel betrayed by the TA. I used to be a member, but not anymore. They don't represent rent stabilized renters anymore and don't seem concerned about the possible expiration of the rs laws. I am very disappointed and deeply depressed over this situation. Probably I am going to lose my home in the not too distant future because of the greed and corruption that has overtaken STPCV since the sale of the complex by an amoral landlord to another amoral landlord. MetLife wasn't always an amoral landlord; in fact, it frequently was awarded "Best Landlord in New York" honors. My God, how things have changed and definitely not for the better. Thank you Mr. Stuyvesant Town Reporter for allowing me the opportunity to voice my feelings. Won't change anything, but at least I can say what I think and feel on your site!
- October 15, 2010 at 8:54 PM
"For decades to come??? And who pays for increasing maintenance costs? Who pays for increasing major capital improvements?"
For decades to come.
First,the mortgage payments are fixed for up to 30 years.Second,maintenance fees are more stable than rent,and actually fluctuate DOWN sometimes.Furthermore,maintenance fees are largely tax deductable complementing the tax advantages associated with a mortgage.Some residents who buy will actually see a reduction in monthly costs.
Then there's the flip-tax.THAT's how you keep maintenance fees stable and fund special projects.Depending on the rate set by the board every apt sale will produce thousands to tens of thousands in flip tax revenues for the management.
Look at TUDOR CITY's co-op conversion if you want to know the facts.Buyers and regulated renters were delighted with how it worked out.Services actually improved and so did the greenspace.That's because tenant owners are the best managers of their own property.
"For tearing down the buildings (which will happen) to build new high-rises?"
Tearing down the buildings?!? Where did you get THAT idea?
Totally baseless assumption.
October 14, 2010 6:23 AM
Anonymous said...
"Every apartment that is bought by a tenant is another apartment that is taken out of the rent stabilization stock in NY."
Stabilzation in ST/PCV is sunsetting.It's over.Accept it.Regulated tenants are now paying 1500-2000 a month.The RGB will continue to raise rents EVERY YEAR.Seniors and working families are already on the verge of being priced out.And all while market rates are in decline.Regulated and market rents are getting close enough to render "regulation" meaningless.It's a good bet some of our lower income residents have ALREADY been priced out.And it's only going to get worse.
The ONLY way for modest income families to remain in the community is to BUY their apts and fix monthly costs near their current levels.That is precisely what Gerald Guterman is offering - a combined mortgage and maintenace cost roughly equal to current rents.Moreover,the banks typically offer much easier terms for borrowes in these type of conversions.Lower downpayments,lower fees,lower rates.Guterman will make it much easier to buy these apts than other apts normally sold at market rate.
That's how he makes these plans work.
But even more important -
We're talking about a ONCE IN A LIFETIME opportunity to revolutionize the financial security of THOUSANDS OF WORKING FAMILIES.Think about what six figures of equity means to their lives.Money to pay for college,start a business,funds available in a crises or simply greater financial security.
Seniors - living on paltry fixed income returns could use that money to secure their home and aply for a reverse mortgage.The equity is so deep they could recieve monthly reverse mortagage payments that would pay a major chunk,perhaps even ALL their monthly home costs.They could live nearly or actually rent free - for life.That blows away any return they're now getting in fixed income,in a near zero interest rate environment.The best dividend stock in the market couldn't even nearly compete.
And those who DO choose to remain rent regulated will likely see a rent REDUCTION.The cap gains improvements would be included in the purchase price of the community.That means those costs come off the rents.Dunno 'bout you but that would knock over twelve hundred bucks a year off my rent.
In other words - EVERYBODY BENEFITS.
We need to stop the pie-in-the-sky talk about affordable housing laws that already has one foot in the grave.We need to embrace this conversion or watch the community go to yet another predatory landlord who will jack rents as fast as possible.
Soon enough the only residents who will be able to afford a new landlords rents will have six figure incomes.
Goodbye middle class!
- October 16, 2010 at 1:27 PM
- Stuy Town Reporter said...
Tearing down the buildings?!? Where did you get THAT idea?
From the Tenants Association Statement of Principles:
"There are efforts underway to secure landmark status for Stuyvesant Town and Peter Cooper Village. Tenants will oppose efforts to develop on open spaces. We believe that the historic configuration of the property should be protected."
While landmark status would settle the issue (and good luck with that), the fact that open spaces are the only ones specifically singled out (the configuration of the property), means that the TA is willing to accept development on the space where the buildings are now. Do you really see these same buildings here in twenty, forty, fifty years?
- October 17, 2010 at 11:02 PM
- Stuy Town Reporter said...
We're talking about a ONCE IN A LIFETIME opportunity to revolutionize the financial security of THOUSANDS OF WORKING FAMILIES.Think about what six figures of equity means to their lives.Money to pay for college,start a business,funds available in a crises or simply greater financial security.
Unless these tenants are well to do, they will have to accept a heavy mortgage. I wonder how many tenants here can afford this? I certainly can't, irregardless of whatever boon "equity" would give me or favors a loaning bank can give me. One of the reasons we are in a recession is that people took on mortgages that they couldn't pay off. Then they lose everything.
- October 17, 2010 at 11:06 PM
No matter what Gutterman's and the TA's shills have to say, the fact remains that a larger number of the tenants than they care to admit do NOT want to buy their apartments and will simply not go along with a co-op or condo conversion plan. Expect a great deal of resistance owner wannabes. You don't have it all sewn up no matter what you want us to think. Shame on the TA for being such about-faced quislings!
- October 17, 2010 at 11:18 PM
"Stabilzation in ST/PCV is sunsetting.It's over.Accept it.Regulated tenants are now paying 1500-2000 a month.The RGB will continue to raise rents EVERY YEAR.Seniors and working families are already on the verge of being priced out.And all while market rates are in decline.Regulated and market rents are getting close enough to render "regulation" meaningless.It's a good bet some of our lower income residents have ALREADY been priced out.And it's only going to get worse"
You fail to mention that in order to take an apartment out of rent stabilization you need BOTH a rent over $2000.00 per month plus a gross income of over $175,000.00 for 2 years. I seriously doubt that many seniors or working families meet that requirement!
And that's only 1 "fact" you omitted or skewed!
- October 18, 2010 at 11:42 AM
- Stuy Town Reporter said...
What we are witnessing is the "fear factor" entering in. You better buy your apartment or else you may be out on the street in a year or two when tenant protection and rent regulation laws expire. Who is behind this "fear factor"? Why are they pushing the idea that rent stabilization here is "sunsetting"?
- October 18, 2010 at 1:47 PM
I think that TA, its clique of pols and wannabee homeowners are trying to scare rent stabilized tenants into believing that they should be pro-conversion and are indeed promoting the sunsetting of the rent stabilization laws. It's a shame because the TA used to fight so hard for this cause. They say Power Corrupts and Absolute Power Corrupts Absolutely. Well, I guess that's what we are seeing here. The TA no longer represents the majority of the tenants and it's about time we had a real tenants association that represents the renter and the fight for the renewal of the rent stabilization laws.
- October 18, 2010 at 2:04 PM
I repeat a fundamental question I have asked on this blog before and for which I have never received an intelligent response (because there is none)-for all those advocating for a rental-only solution to STPCV, how do you propose that any new owner will pay back $3.7 billion in senior debt when the property is only worth $1.9 billion (which means that the rent rolls cannot support repayment of the debt)?
Assuming an owner decides to make the initially illogical economic decision to buy the property and maintain it as a rental, the owner will seek to evict any RS tenant it can ASAP and when 2017 arrives (when J51 benefits expire) ,or sooner , if RS laws are not renewed beyond June 2011, they will convert every vacant apartment to a market rate apartment. TS was able to convert 40% of apts to MR in about 3 years , so I figure that by 2020 the vast majority of apartments will have been destabilized.
That is the future that all of you advocating for no coops or condos are looking at . The alternative is for many tenants to become owners at afordable prices with guarantees to RS tenants that they will remain as such.
To me, the latter scenario is much better for ALL tenants (even if I don't buy) and it is only tenants who just don't understand what the future will be but rather long for the olden days of Mother Met who just don't get it!
The days of $500/month rents are over. The RS world is not going to get better for tenants, not with the Republicans possibly retaking control of the State Senate(or even if they don't , enough Dems in the State Senate have been bought by the landlords to ensure that at most the RS laws will remain as is), which means that as rents continue to rise and incomes continue to rise, more and more RS apartments will be destabilized. I know that certain writers on this blog could care less about that because their incomes are fixed at rates lower than $175,000/year, but if you are truly interested in the future of STPCV , you should understand that someday us older tenants won't be here and our apartments will then revert to MR. That is hardly a legacy to leave to the next generation!
I am open to read other ideas but the only ones I have read here or elsewhere simply criticize TS and the "greedy" banks. That is NOT a solution.
- October 18, 2010 at 4:54 PM
All the pro conversion posts here point to Tudor city's conversion as a successful conversion. Maybe thats so, but we don't know what went on when it first happened. We don't know the specifics. However, why not take a look at a more recent conversion like Midtown East. Not only are lawsuits still flying, at one point even fists were flying. I think thats more like what will happen here.
- October 18, 2010 at 5:05 PM
Why are they pushing the idea that rent stabilization here is "sunsetting"?
Because it is, upwards of 40% of the tenants are J-51 rent stabilized (RS) and will lose RS protection in 2020. No lobbying or activism for the continuance of RS laws will change this. Without a condo-coop conversion, in 2020 ST/PCV will become Tishman Speyers's dream - a majority market rate rental complex. Only pre-roberts decision RS tenants would oppose a non-eviction conversion and they must be a piteable minority.
- October 19, 2010 at 12:06 AM
- maxschactman said...
"The TA is trying to rally tenants today and the emphasis seems to be on having the opportunity to buy the units."
Once again - A NON-EVICTION co-op conversion means CHOICE.You can remain rent regulated if you choose.
The ONLY reason folks here are complaining about rent regulation now is because of the conversion issue.But the conversion does not change the fact that rent regulation means endless,annual rent increases.It's ALWAYS been that way.And there's no way the politicians are going demand a rent freeze or anything like that.
Therefore the only alternative to converting is allowing another predatory landlord to buy in and jack rents even faster.
The co-op conversion would be the best thing for buyers AND RENTERS.The cap gains we now pay on our monthly bill will probably be included in the purchase price.That means those charges come off the rent bills giving every renter a rent reduction.We're talking a 1300-1500per year rent reduction.
As for buying - some of you need to stop being so adamant you can't buy.It is very possible local banks will require only 10% down.Based on Guterman's plan of offering to insiders at 290.00 per sq. ft you might secure the mortage for a one bedroom with LESS THAN 25k.
For some reason,a lot of residents expect the insider price to be much higher.I don't know why.Guterman's plan is on the web for all to see.
He would offer 1 bedrooms to current residents for about 215-220K and sell vacant 1 bedrooms apts on the open market for 625K.
Do you hear what I'm saying?!?!
It is very possible,in fact likely residents can secure nearly 400k in equity with a 25K down payment,a little more for 2 bedrooms.FOUR HUNDERD THOUSAND IN EQUITY.For many residents,probably most,this is a once in a lifetime oppotunity to lift their financial circumstances and gain real security.For that I would take night shifts at Macdonald's to raise the downpayment.
- October 19, 2010 at 2:17 AM
- maxschactman said...
OK,15% down,rather than 10%.
For a one bedroom that would be about 37K to secure 400K in equity.
- October 19, 2010 at 2:22 AM
- Stuy Town Reporter said...
I repeat a fundamental question I have asked on this blog before and for which I have never received an intelligent response (because there is none)-for all those advocating for a rental-only solution to STPCV, how do you propose that any new owner will pay back $3.7 billion in senior debt when the property is only worth $1.9 billion (which means that the rent rolls cannot support repayment of the debt)?
This HAS already been answered--with a question, which is actually a crucial point: Why should tenants bail out the landlord because of a bad deal a previous landlord made? This seems incredible to me. Tishman-Speyer and BlackRock fuck up big time, by buying this property for way too much than it's worth, and now we, the tenants, have to pay for their mistake?
- October 19, 2010 at 9:30 AM
- Stuy Town Reporter said...
OK,15% down,rather than 10%.
For a one bedroom that would be about 37K to secure 400K in equity.
That's interesting, because T & V a few weeks back had that at 10%. So it's gone up! (Just as everything will go up.)
I can't afford to hand over, just like that, 37K and start paying off a 6-figure mortgage AND pay maintenance that's going to be close to my current rent. And I'm not living in a one-bedroom, so I'd probably need to hand over 50K, if not more.
Come on, let's get real. Unless we have wealthy people living here (I'm sure we have some), no one is going to able to take on such a burden, regardless of equity.
Unless you can explain better, and realistically, how the average tenant can use equity to not only counterbalance a heavy financial burden, but overcome it with a decent profit.
- October 19, 2010 at 9:36 AM
- maxschactman said...
"T & V a few weeks back had that at 10%."
They might be right.That would be typical in such a conversion.Therefore based on Guterman's plan one could secure a one bedroom for about 25K,a two bedroom about 35K.For the many tenants thinking in six figures that would be quite a pleasant surprise.
"I can't afford to hand over, just like that, 37K and start paying off a 6-figure mortgage AND pay maintenance that's going to be close to my current rent."
Guterman's plan is almost identical to Tudor City.The goal is to make the mortage AND maintenance combined roughly equal to current rent.Keep in mind the avg maint. fee at Tudor City and the Grand. St Co-ops is 500-700 a month and almost 50% tax deductible.And these building are in much better condition than Tudor City,which was built in the 20's and had serious problems when it converted.Nontheless,thanks to the revenues produced by the flip-tax,maintenance fees have remained stable.There would be a flip-tax here too that would serve the same function - produce revenues for management to fund repairs,special projects and keep maint. fees stable.
"Come on, let's get real. Unless we have wealthy people living here (I'm sure we have some), no one is going to able to take on such a burden, regardless of equity."
I'll make you an offer.
For 35K and a monthly cost roughly equal to your rent I will sell you 375-400K in equity - right now - which will rise to 600-700 in equity over the next 10-15 years.
What would that kind of equity mean? Fund a nice retirement? How about a reverse mortgage starting at age 58 that pays 2K a month FOR LIFE.
Finance a business to increase your income or just do something else? Finance a college education?
Or be there for a family or health crises?
And how many thousands of working and middle class families and seniors in this community would be impacted by such an equity windfall?
"Unless you can explain better, and realistically, how the average tenant can use equity to not only counterbalance a heavy financial burden, but overcome it with a decent profit."
Just did.
But here's the "profit" part.Guterman plans to offer apts. to US for 290 pr. sq. ft but sell vacant apts. at the "quick sale" discount price of 725-735 pr. sq. ft.
That means a one bedroom in PCV sells to a current tenant for 246,500 but sells for 625K - right now - on the open market.In other words Guterman will be establishing the rock bottom,"quick sale" discount value of all our apts. And on the apt. I just described that equity would be 377,500.
In reality the "fair value" is about 8% higher than the quick sale price.And with the housing market trailing along a bottom in 10-15 years that will double.
One more thing.I'm not wealthy.In fact I don't even have have the down payment.But don't you know I'm talking to every friend an family member who'll lend me an ear for five minutes? Oh yeah.
As I said in a prior message - I'd talk graveyard shifts at Macdonalds if I had to.
- October 19, 2010 at 6:32 PM
Tishman Speyer did NOT turn 40% of the units to market rate in 4 years, the conversion started with Met as early as the mid 90's, almost 15 years ago.
And J51 expiry only affects "Roberts" leases and not all Rent Stabilized tenants. They're governed under the Rent Stabilization laws.
All of this unfounded speculation is total bullshit as far as I'm concerned. I'm not making any judgments until I see hard facts from Moelis and Paul Weiss.
- October 19, 2010 at 7:49 PM
I've been living in my apartment for over 30 years and I love my apartment. I don't love Stuyvesant Town, but I do love my little home! However, there is no way I would dig into my hard-earned retirement savings to purchase my apartment because I don't consider it worth buying. The reason: my building is a dorm; I am woken up every night by braying, howling dudes and screechy, giggly girls. I have to listen to them putting their Ikea schlock together at all hours of the night. Last night they were hammering until after 1 am. Then there is the laundry room which is like a swamp and should be condemned by the Board of Health. Details are too gross to go into so early in the morning. Those are just the highlights. Take the roaches, mice, mold, general scruffiness of the buildings. No thanks. I'll rent and spend my money on something nicer than Sty Town if I ever decide I want to buy a home. Maybe it won't be in New York, but that's ok.
- October 20, 2010 at 10:40 AM
Maxschatman, you sure sound like a Salesman!
- October 20, 2010 at 10:49 AM
What you refuse to accept is that noone will be giving us a choice as to whether or not to "bail" out the lenders.
We have no legal right to block the sale of STPCV to anyone. The best we can hope for is to work with CW to create a noneviction plan with the senior lenders agreeing to reduce the amount of the senior debt by some amount (Guterman's plan assumes a reduction from $3.7 billion to about $3 billion) in exchange for getting some of their debt repaid sooner from proceeds of apartment sales.
STR are you advocating a plan like what Obama forced on creditors of GM and Crysler , in which he forced a deal which essentially ignored US bankrutcy law? First, to continue to do such plans is socialistic. Second, Obama isn't coming to our"rescue" like he did in GM and Cysler. 25000 tenants in NYC aren't worth nearly as much to him and his cronies as hundreds of thousands of union votes.
If you accept reality, then the choices are a noneviction plan or a new owner quickly converting the vast majority of apartments in STPCV to MR after 2017 (or sooner if RS disappears or is weakened next year).
Noone is coming to our "rescue" and noone should.
In the end, if you don't buy you remain an RS tenant so what is your problem anyway?
- October 20, 2010 at 11:41 AM
- maxschactman said...
"However, there is no way I would dig into my hard-earned retirement savings to purchase my apartment because I don't consider it worth buying. The reason: my building is a dorm; I am woken up every night by braying, howling dudes and screechy, giggly girls."
1.WORTH buying !?!? Pass on six figures of equity for that reason and it won't be long before you regret it as the THE lost opportunity of your lifetime.
2.Who allowed these kids to rent here? And who opposes allowing them to rent?
Answer 1. - Tischman - The most recent predatory landlord who would do ANYTHING to rent apts. at market rate.If we don't buy the community another predatory landlord will buy and do the same thing.
Answer 2. The tenants.They oppose renting to underage and group leasers.And if we convert to a tenant owned community renting and subletting rules will be based on what the owners and tenants want.And neither tenants OR owners want the problems associated with such underage tenants - bad for quality of life - bad for apartment values,as you just pointed out.No doubt whatsoever the new TA/Board would impose sensible restrictions on subletting and new renters....
- over 25 - employed full time or can show sufficient personal assets - no group renters.Full time employed-established professionals and families preferred.
Problem solved BY the tenants FOR the tenants.Beats the heck out of some greedy landlord who creates rules and just says "too bad,that's my right".
- October 21, 2010 at 3:52 AM
Buying here even for those who can afford it only will make sense if the maintenance fees would be reasonable and maintenance+utilities+mortgage would not exceed rent too much. It also will make sense if there is something done about the paper thin walls/ceilings where you hear every pin drop from neighbors.
I moved to PCV stabilized unit less than 2 years ago, didn't know it was stabilized and paid market rate. However, my stabilized rent is only about 150 a month less than the market rate, not a big deal of a discount if you ask me. I pay almost 3K for a 1 bedroom. As a rental this makes sense to me - no utilities, not maintenance fees, great outdoor amenities. But if I were to buy, I don't know how much sense it will make for us if we get slapped with the sky-high maintenance fees given how old these buildings are and how many problems to fix. Would I really want to stay in the same unit and pay extra 1-2K a month when I already can rent a nice 1 bedroom for 3K elsewhere? If I were to pay 4.5K a month I might as well go elsewhere to rent a two bedroom apartment, why stay here endure the endless noise from neighbors and pay extra to stay in the same one-bedroom? The point I am trying to make is that for people who have the money to pay market rates and mortgages it makes no sense either as they have choices to go elsewhere and that PCV/StuyTown has to be competitive enough to attract this type of market rate buyer.
I can see how my 1 bedroom would be a great deal for under 300K (that is if the maintenance fees are not 2K a month, but are reasonable). But I can't see why anyone would want to pay 700K for my apartment and be slapped with the equally high maintenance. How they plan to sell all the empty units at "market" prices beats me, it's not going to happen with the abundance of other units all over Manhattan for the same price.
- October 21, 2010 at 4:06 PM
I agree wholeheartedly with the last poster. STPCV, a great place to rent but a lousy place to buy. The lack of soundproofing, much-needed modernizing of the plumbing, etc, make it a very bad choice for purchase.
- October 22, 2010 at 9:01 AM
I knew Obama would get dragged into this discussion at some point!
- October 22, 2010 at 2:12 PM
I see Rose is back. Well, I hope they don't bring that terrible Steven Stadmeyer back! I haven't forgot his treatment of tenants when the electronic locks were first installed in PCV. The goon squads masquerading as Security. I also haven't forgotten that he gleefully denuded the Oval of its beautiful trees. Let's hope Rose has evolved to a better style of management and got rid of the Stadmeyer-types who do more harm than good.
- October 23, 2010 at 10:47 AM
- maxschactman said...
A lot of folks here are undervaluing the REAL value of their apts.
Again,I have no idea why when Gerald Guterman's plan is available for all to see -
The answer to any quality of life,management or maintenance problems is TENANT OWNERSHIP.Let tenants decide how those issues are dealt with.The only alternative is let another predatory landlord decide how this community operates.
Based on Gutermans plan we can buy a our apts. for 290 pr sq ft whole HE'LL be selling vacant apts on the open market for 725-735 pr. sq ft. Our upfront costs will be 40-50K depending on 1 or 2 bedroom.
The monthly FIXED FOR 30 YEARS mortgage payments would range from 1050-1250 with a maint. cost ranging from 600-700. If the TA is smart and allows unrestricted resale they'll bring in 15-20 million dollars a year in "flip tax" fees of 3% on all apt sales.And that amount will rise as apt. values rise.The flip tax revenues will pay for extra expenses and keep maint. fees stable.
OR - Since it is a NON-EVICTION conversion plan you could remain as a regulated renter and pay the annual rent increases imposed by the RGB.
So - stabilize your monthly costs for thirty years and end up with 800k to a MILLION dollars in equity by 2040 or keep throwing away money on endlessly rising rents and get nothing?
- October 24, 2010 at 1:44 AM
- maxschactman said...
- October 24, 2010 at 2:02 AM
Keep at it Max! You won't convince me though. I would never buy my apartment and get stuck with a mortgage and maintenance. Equity be damned. I may be dead in 30 years and I sure as hell aren't taking anything with me when I go and don't care to provide for anyone else after I go. These apartments should be kept as rental only, but if the DO get converted there should be a serious flip tax involved or they should be limited equity so that we don't have a repeat of the shark feeding frenzy that has destabilized this community and many others like it. NO to Gutterman and NO the the TA/Owner-wannabbe cabal.
- October 24, 2010 at 10:57 AM
- Stuy Town Reporter said...
Question for Max....
Equity. If a tenant here buys an apartment worth 700K, isn't his true equity how much he owns MINUS the mortgage? To give an example, if my mortgage on an 700K apartment will be 650K, how can I do anything with my 700K "equity" unless I've already paid that amount off? It's not as if someone just handed me 700K and I can do anything I like, as if I had 700K in my pocket.
If I want to start a business, pay for two colleges, etc, with that "equity," I will still need to borrow money and just add more debts than I already have, with investment vultures waiting at the door to see me go bankrupt so they can acquire my property at a good price.
So realistically, what can one do with such an equity?
- October 25, 2010 at 8:53 AM
The equity comes from being able to buy your apartment and especially because tenants will be able to buy at an insider's discount price. Using Guterman's plan as an example - he plans to sell tenants their apartments at $300/sq ft and if a tenant puts 15% down , assuming a 1000 sq ft apartment, the tenant puts down $45,000 and borrows $255,000 (BTW at the lowest mortgage rates since the 1950s). Guterman then says he can sell vacant apartments at FMV of about $700/sq ft.So even if you don't want to sell your apartment you could borrow additional money from the bank as you would have debt of $45,000 on an asset with a FMV of $700,000. If you needed money for education expenses of children or grandchildren or for other expenses this would be by far the cheapest way to get such financing
- October 25, 2010 at 10:50 AM
You make the Guterman plan sound so simple and cheap. It isn't. I agree with the person who said you must be a sales person for Guterman or the TA.
$290 a square foot for which apartments? Renovated or non renovated, 20th St and First or 14th and Ave C, ground floor with all the noise and smoke or 11th floor with the views? Does the Guterman plan not take any real estate principles into account? Does Guterman's plan only include monetary factors? I for one would find it unjust if my unrenovated, not air conditioned, main floor (with all the college drunks and the chain smokers right outside my window) apartment was the same price as a renovated, air conditioned, 11th floor apartment with views of the city. In fact, I would hire a lawyer to sue and hold things up if this were the case. I believe that is the biggest problem anyone wanting to co-op or condo Stuy Town will face is all the lawsuits over the plans. That is why CW Capital has bought Dan Garodnick and the TA!
- October 25, 2010 at 12:09 PM
Say goodbye to PCV/ST as affordable housing. It's over.
- October 25, 2010 at 5:50 PM
- Stuy Town Reporter said...
So even if you don't want to sell your apartment you could borrow additional money from the bank as you would have debt of $45,000 on an asset with a FMV of $700,000.
According to the our politicans there will be a cap on the amount of money a tenant would be able to sell an apartment. And I don't see how anyone will be helped by borrowing money when they already have a debt of 45K, irregardless of the "equity."
- October 25, 2010 at 11:38 PM
Why are my comments not being posted. Is this censorship?
- October 26, 2010 at 11:51 AM
Max and all the other Guterman/TA plants here: some of us (probably a lot of us) just ain't interested in getting in up to our necks in mortgage debt or any other kind of RE-related debt when we are perfectly happy to rent our apartments at the rent stabilized rate and are perfectly willing to fight tooth and nail to be able to continue to do so. Don't assume that the TA and Garodnick, et al have all of us convinced and have it all sewn up. Just ain't so! They will find more resistance than they bargained for if/when they try to persuade us to buy. I may buy an apartment one day, but NOT HERE!
- October 26, 2010 at 1:19 PM
I don't think there will be a cap, just a flip tax . BTW proceeds from flip taxes can and should be used to repairs, maintenance in STPCV
- October 26, 2010 at 3:16 PM
- Stuy Town Reporter said...
I'm posting what comes through. Perhaps I missed something. I'll check.
- October 26, 2010 at 3:23 PM
- Stuy Town Reporter said...
I checked and everything recent seems to have gone through.
- October 26, 2010 at 3:25 PM
I posted a comment at about 3PM -wasn't posted -you are having issues with your "word verification"
- October 26, 2010 at 3:50 PM
- maxschactman said...
"I would never buy my apartment and get stuck with a mortgage and maintenance. Equity be damned."
Then you will pay eternally rising rents.Before long the rent you pay will be much higher than the combined mort/maint cost.That's why a co-op conversion is the ONLY way to keep monthly costs affordable.
"These apartments should be kept as rental only"
That means another predatory landlord takes control.UP goes rents,MORE MCI's and continuing problems with college age tenants.But since the property value as a rental is now under 2 billion that won't happen.CW Capital wants it's three billion and Gutermans' plan is the only way to make that happen.
"but if the DO get converted there should be a serious flip tax involved or they should be limited equity so that we don't have a repeat of the shark feeding frenzy that has destabilized this community and many others like it."
Im sorry but I don't get any of that.There would probably be a standard flip tax of 3% on sales.That should produce 15-20 million a yr. in revenues.
If you limit resale rights tenants will not buy.Many of us have paid six figures in rent over the decades.Now we have to come up with another six figures.
Put 'em together and the insider price is less of a bargain than it seems at first glance.
What is so wrong with working and middle income families enjoying the benefit of an equity windfall? Who should benefit from the full asset value of this community? Tenants who've been here for decades or another landlord?
Excuse me - but there are THOUSANDS of families and residents whose lives will be enormously improved by buying - IF they get NORMAL homemowner rights including unrestricted resale.
And what is divisive about that? Nothing.Some remain as renters,some as owners.So what? They both get the same services,both want an improved quality of life and good building conditions.There is no conflict.
"NO to Gutterman and NO the the TA/Owner-wannabbe cabal."
In light of the facts that means "YES to another predatory landlord and endlessly rising rents".
"Stuy Town Reporter said...
Question for Max....
- October 26, 2010 at 5:34 PM
- maxschactman said...
"Equity. If a tenant here buys an apartment worth 700K, isn't his true equity how much he owns MINUS the mortgage?"
Correct.And the equity gap between Gutermans insider price and market price is 375-425K.WOW!
As for how to exploit that gap it's up to each individual owner.Sell and realize a wonderful,life changing profit.But if they want to live in Manhattan the profit will go to buying another,more expensive opt.That's why I don't think we'll see huge turnover.Over 62? You can access a reverse mortgage that pays off the mortgage balance and provide income for life- like an annuity.
Borrow for anything you think you can pay back.
Or simply wait five,ten,fifteen years and then sell.
Or enjoy the stable monthly costs while your regulated neighbors are watching their rents head towards 3K.
In 20 yrs you'll have a million dollar property and they'll have nothing but the next months rent bill.
"If I want to start a business, pay for two colleges, etc, with that "equity," I will still need to borrow money and just add more debts than I already have"
If you borrow for a business the idea is to create more income than you borrowed,correct? Same with a college education.It's simply a question of well planned,SMART debt.It's smart if you make money from the debt.
"According to the our politicans there will be a cap on the amount of money a tenant would be able to sell an apartment."
Actually they've been incredibly vague.But Guterman knows the deal.If tenants can't enjoy normal homeowner rights they won't buy,the deal fails and another landlord wins.Ain't gonna happen.The TA and Garodnick will HAVE to accept reality.They really have very little wiggle room to work with.Some will remain as regulated renters,some will buy [with very limited resale rights] and the community moves on.
The only resale restriction I expect is a 12 month waiting period.Guterman needs time to unload the market rate apts. without competing with tenant sellers.That's completely fair.Guterman will not make killing on this.All he's looking for is a modest profit which he'll more than deserve.
- October 26, 2010 at 5:34 PM
- Stuy Town Reporter said...
"Equity. If a tenant here buys an apartment worth 700K, isn't his true equity how much he owns MINUS the mortgage?"
Correct.And the equity gap between Gutermans insider price and market price is 375-425K.WOW!
I'm not talking about the spread between the insider price and market price. If I buy my apartment at 700K and pay upfront 50K, 650K is NOT my equity, because that's my mortgage. That's my debt. It's NOT money I can use for anything. A new business, college for kids....
- October 26, 2010 at 5:59 PM
Bottom line-as the NY Observer points out -CW is going to tell us what it wants to do. Yes we have good advisors but we have no legal standing to get anything CW doesn't want to do
We have been in, and should continue, discussions with CW to try to fashion an outcome that most tenants want ( no outcome will ever satify all or even substantially all tenants) but at the end of the day CW will do what it deems to be in the best interests of the new owners who are represented by CW
- October 26, 2010 at 6:00 PM
- Stuy Town Reporter said...
Guterman will not make killing on this.All he's looking for is a modest profit which he'll more than deserve.
- October 26, 2010 at 6:00 PM
I think that we tenants are going to be subjected to some heavy duty sales pitches from these Guterman types and I am just hoping that there will be people who will help the older residents to not get suckered in to something they will regret. There is no lower form of life than the hardsell salesman.
- October 26, 2010 at 6:27 PM
Hey Max. How about shutting up until plans are announced ? Then you can tout all you want.
IMHO, smart money will be invested elsewhere. This place will be a money pit.
- October 26, 2010 at 9:08 PM
I won't even consider buying my apartment (should that become an option) until and unless they throw out all those lousy students, take down the pressurized walls and return apartments to their original configuration and MANDATE wall-to-wall carpeting!!!! This place sucks as a bare-floored, stuffed-units dorm for the immature spawn of pass-em-off to nannies parents from the burbs and the fly-over states!
- October 26, 2010 at 9:18 PM
Your word verification isn't working properly.FYI
- October 26, 2010 at 9:22 PM
- maxschactman said...
"I'm not talking about the spread between the insider price and market price."
How simple do I have to make this?I have a one bedroom apt. in PCV [since 1970].Guterman wants to off er it to me for 246.5K and outsiders for 625K.That 378.5K gap between the insider price and the market rate is the "equity".I would use just SOME of that equity to finance a business.15-20 years from now that equity will be seven figures.
"Bottom line-as the NY Observer points out -CW is going to tell us what it wants to do."
Of course.Because they have a fiduciary responsibiltiy to their senior debt holders.Fortunately,the only way they can recoup that debt level is to go with the Guterman plan.That means offering the apts at deep discounts to market values and selling the vacated apts on the open market - nicely establishing the equity gap for us.
Not to mention all the other benefits for owners.
"Stuy Town Reporter said...
Guterman will not make killing on this.All he's looking for is a modest profit which he'll more than deserve.
Short answer?
Because it's a business deal and ths is a market economy.
The long answer?
Because it's an enormous effort and the greatest beneficiaries will be the tenants,rather than another predatory landlord.Guterman will realize a modest profit for his efforts and it will take years.Guterman has done these types of deals many times.Converting to co-ops from regulated rentals is somewhat unique to NYC.Normally the attraction for someone like Guterman is they accept the modest gains because it's a very safe investment."Low hanging fruit" so to speak because insiders are USUALLY anxious to take advantage of the insider price.
- October 28, 2010 at 5:56 PM
- maxschactman said...
Anonymous said...
I think that we tenants are going to be subjected to some heavy duty sales pitches from these Guterman types and I am just hoping that there will be people who will help the older residents to not get suckered in to something they will regret. There is no lower form of life than the hardsell salesman."
I doubt there will be any "hard sell".That's not how these deals work.Tenants are given the facts and they decide to buy or not.Usually they are so anxious to take advantage of the insider price they don't need ANY selling.But it's clear to me that many in our community simply don't understand how these deals work or the opportunity at hand.
Instead,they actually prefer to pay endlessly rising rents,as mandated by the RGB.
Go figure.
Someday,when they're paying 2500 a month they'll finally get it.
Particualrly when they know their neighbors are paying LESS to OWN.
As for seniors or anyone who wants to remain stabilized - there's no issue.Simply do not buy and you'll remain stabilized.
"October 26, 2010 6:27 PM
IMHO, smart money will be invested elsewhere. This place will be a money pit."
No it won't.What do you think all those MCI's on your monthly bill are for? Other than plumbing all the major repairs and upgrades ave been done.Electrical,windows,elevators,rooves,greenspace,lobbies etc. Now compare that to Tudor City,built in the 20's and converted in the 90's with no repairs done.Yet their maint. fees have remained stable while they've made those repairs.
As for plumbing,like Tudor City it is a near impossible fix.It is something the community will live with.I suspect that over time there will be technological fixes for some of the pressure issues.
One more thing - Those MCI's will be included in the purchase and therefore those monthly costs should come off the rents.THAT WOULD BE THE ONLY RENT DECREASE REGULATED RENTERS EVER GET.
But they will get that decrease only if we buy.Another landlord will undoubtedly find away to keep 'em on.
"October 26, 2010 9:08 PM
Anonymous said...
I won't even consider buying my apartment (should that become an option) until and unless they throw out all those lousy students, take down the pressurized walls and return apartments to their original configuration and MANDATE wall-to-wall carpeting"
Everyday the same complaint yet incomprehensible solution.If we do not buy we do not get control.If we do not get control the policies remain unchanged because they'll be set by a LANDLORD.
The ONLY way to reinstate the original policies vis a vis student renters and carpeting is to TAKE CONTROL OF THE COMMUNITY BY BUYING.It would benefit both regulated renters and buyers to reinstate those original policies.Only a landlord would want to keep things the same.
- October 28, 2010 at 5:56 PM
- Stuy Town Reporter said...
>>How simple do I have to make this?I have a one bedroom apt. in PCV [since 1970].Guterman wants to off er it to me for 246.5K and outsiders for 625K.That 378.5K gap between the insider price and the market rate is the "equity".I would use just SOME of that equity to finance a business.15-20 years from now that equity will be seven figures.<<
I think you'll need graphs because I still don't understand how you can get an "equity" of 378.5K if you have not paid that amount to own your apartment. That 378.5K is going on your mortgage. Are you telling me that one's mortgage is part of "equity" and like money in the bank for investments, etc.???
Let me offer you an example. Say I'm on fixed income. I decide to buy my 2-bedroom for 600K, and make a down payment of 10%, which would be 60K. Are you telling me that I now have an equity of 600K or even higher based on the market rate for such an apartment?
If so, then do you seriously think that with a fixed income I can go to the bank and take out a loan for 600K based on this "equity" when I already have a mortgage of 540K hanging over my head. The banker will look at me and laugh.
- October 28, 2010 at 6:39 PM
Guterman will sell to you at 300/sq ft ($300,000 for a 1,000 sq ft apt)with 15% down that is a downpayment of $45,000 with a mortgage of $255000. Assuming he sells vacant apartments at $700/sq ft that exstablishes FMV of your apartment at $700,000 . Thus your equity is $700,000- $255000 mortgage = $445,000 , net equity after your downpayment is $400,000. Even taking a haircut off of $700/ sq ft because of the number of apartments that would be sold in STPCV and thus theoretically on the resale market , let's say 20%, leaves you with a value of $560,000 or equity of $305,000 (assuming your $255,000 mortgage) or net equity of $260000($305000 minus your $45,000 downpayment). this equity could be used to obtain an additional mortgage to fund other life expenses or if you are old enough you could do a reverse mortgage where someone pays you money monthly for the rest of your life and takes over apartment after you are gone.
This is far better than giving a landlord rent money every month, with the amount of the rent going up every one or 2 years and with the possibility that rent stabilization might not be renewed , at which point rents for pre-Roberts tenants will skyrocket.
For newer tenants this deal makes even more sense because they are paying higher rents than older tenants and they are looking at reverting to MR tenants when J51 benefits expire either in 2017 or 2020 , even if RS law is still in effect
- October 28, 2010 at 7:09 PM
STR, Max is clearly in the employ of Guterman and he's doing what he's being paid to do: hardselling Guterman's plan. He is going to be all over the tenants like a bad rash.
- October 28, 2010 at 7:23 PM
- maxschactman said...
"I think you'll need graphs because I still don't understand how you can get an "equity" of 378.5K if you have not paid that amount to own your apartment."
The last contributor explained.I thank him for that.
Based on the Guterman plan I will pay 246.5K for my apt.
BUT it is WORTH 625K.That is how much outsiders will have to pay.
So,It is worth MORE than I will pay.
The gap between my COST and it's VALUE is the EQUITY.If I sold I would realize a gross profit of 378.5K.
Look,let's just say you need to do some studying.No crime in that.For those who've never owned a home or thought about it these are new issues.I've been through this before.I was tenant in Tudor City when it converted to a non eviction co-op.I bought my little 380 sq ft apt for 42K when the market was down in 1990.Shortly after I was offered an apt. in PCV.I rented out the studio[at a nice little monthly profit therefore creating income],moved into PCV then sold the studio in 2003 for 135K.
What Guterman is offering is almost identical to the Tudor City conversion,which worked out beautifully for those who bought AND those who remained rent regulated.
An explanation of equity -
- October 29, 2010 at 4:03 AM
Obviously several people who post here are fans of the book How To Lie with Statistics. In theory there is some truth to what htey are saying in reality STR is correct. First, the only way your "equity" is the spread between what you pay as an insider and what an outsider pays is if you could turn around and sell your apartment for that amount. With the TA and Dan Garodnick trying to block that path theory is all this is at this point. Not to mention flip taxes and a slew of other fees when you go to sell. Secondly, with the market in NYC right now smart money advisers are advising clients to rent and not buy so there is a glut of real luxury apartments sitting on the market many of which are priced similarly to what the Guterman plan says they can sell the apartments for. Thirdly, the Guterman plan states that 75% of tenants will buy their apartments. Really? Even the TA who took their survey right after the T&V newspaper had a front page article about apartments selling for under $200,00.00 they came up with a much lower figure than that. Finally, there is the monthly maintenance fee which the advocates for buying say will be under $1000.00 per month. Maybe initially but that will not last long soon, it will be over $2000.00 Take a look around Manhattan and see what others pay in maintenance fees. Also remember that as an owner you become liable in the cases of lawsuits etc,. Every expense that arises will mean more money out of your pocket.
- October 29, 2010 at 11:00 AM
I just bought my Stuy Town apartment for $300,000. Now, it's beyond the flip date restriction (say 12 months later) and I'm selling it for $400,000.. I figure a hundred grand is a nice profit.
Now, tell me, where did your 4, 5 or 6 hundred thousand in equity just go ??? I'll answer... straight down the toilet.
You're trying to sell people a bill of goods using phony market rate projections. The market will be whatever the market will be. Good luck with that.
- October 29, 2010 at 12:10 PM
- Stuy Town Reporter said...
This is from the Wikipedia article you linked to:
"In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid."
AFTER ALL LIABILITIES ARE PAID. Your mortgage does not count as equity.
Unless they are rich, folks buying an apartment here will have to get a mortgage--with interest. You bought a Tudor City apartment for 42K. Do you think anyone in ST/PCV will be ever offered that ridiculously low number? Sure if I can buy my apartment for 42K, I'm there. But it'll be more like 600K and I certainly don't have money available for something like that. I would HAVE to take a mortgage, which is another DEBT added on to the ones I already have.
- October 29, 2010 at 5:47 PM
STR, it is absolutely as clear as daylight that Max is a shill for Gutner and, maybe, the TA. He talks the talk of a slick, glib, commission-hungry salesman. He reminds me of those guys who used to be on the Home Shopping Network sell "priceless gems" for peanuts. Remember Mel Arthur and his hairpiece? :-) Max is a schlock merchant of the same ilk. My one-bedroom apartment is not worth taking on a shitload of debt for. Never was and never will be.
- October 29, 2010 at 6:26 PM
I personally do not believe that Max is a shill. He does, however, have a very rosy picture of the unfolding of events if we were to purchase which may or may not come to fruition. I agree with most posters here that this place is a dump. I agree that it is a dog toilet. However, all of these fact are probably irrelevant in terms of the place's resale value. Maybe a one bedroom will sell for 500,000. I say this because a "nice" one bedroom in this area sells for around 700,000. Also, the comments regarding assuming mountains of debt are incorrect as well. The talk is making the monthly nut roughly equivalent to our current rents (that's stabilized rents people). If it wasn't I wouldn't be able to purchase either. I do feel though that we need to know what the plans are regarding bringing this place back to some semblance of order and cleanliness before we commit to a purchase.
- October 30, 2010 at 9:53 AM
Its amazing the amount of mis information on this post.
1) The idea that people who do not buy will somehow be kicked out of their units is laughable. If the complex is purchased by tnts it will ensure rent stab tnts and future rent stab tenants a secure future. At the Baruch meeting today there was mention of a plan that puts units not purchased into permanent rent stab status, never to be sold, and run by a separate non profit corp with the mandate of ALWAYS HAVING THESE UNITS AT RENT STAB RATES!
2) There has been talk of maintenance of $2,000 a month and purchase prices of $600K. Amazing mis information. Units may not be $290 PSF but they will not be $600K. More like $350-400K on average. Maintenance should be between $800 - 1000 per month based on the fact this place cost about $100,000,000 based on 2005 budget numbers, so figure $120,000,000 in 2010 numbers. Divide the $120M by 11,250 units and you get $888 per month.
3) I will admit the wild card is capital improvements. Who knows how much that is but its not a deal breaker.
4) Everything max said about rent stab is true. If another LL buys the place they will try to evict tnts in 2017, if the place is converted and tnts are the owners that will not happen, renters will be left alone.
5) Last thing, someone said you have to have BOTH 175K income and rent over 2K for a unit to be exited from rent stab, again, not
true, its one or the other.
Please, no more fox news scare tactics on this blog! I understand if you do not want to buy or cant afford to buy but dont hate people who do because in actuality they would be doing renters a favor.
- October 30, 2010 at 6:38 PM
- Stuy Town Reporter said...
On #5 you are absolutely WRONG. You need BOTH qualifications.
- October 30, 2010 at 7:06 PM
There is my mis information for the post!
- October 30, 2010 at 7:47 PM
- maxschactman said...
"the only way your "equity" is the spread between what you pay as an insider and what an outsider pays is if you could turn around and sell your apartment for that amount."
Not true.The equity level is actually established by the banks.The banks have to know what your home is worth on the open market.Gerald Guterman will set the outsider or "market" price.Once apts are sold for that price the banks will acknowledge the equity gap.Keep in mind that the avg co-op condo rate in this district is 775 pr. sq. ft.
"With the TA and Dan Garodnick trying to block that path theory is all this is at this point."
That's true.But it's my contention that most tenants will not buy if they do not get normal homeowner rights - including unrestricted resale.If too few tenants buy the plan fails and another landlord buys this community.That reality will compel the TA to accept unrestricted resale rights.
"Not to mention flip taxes and a slew of other fees when you go to sell."
Flip tax is usually 3% of total sale price.NYC transfer taxes on one of these apts would run 10-14K.These are our primary residences.Therefore the first 250K in cap gains is not taxed,500K if you're a married couple.
"Secondly, with the market in NYC right now smart money advisers are advising clients to rent and not buy so there is a glut of real luxury apartments sitting on the market many of which are priced similarly to what the Guterman plan says they can sell the apartments for."
That is partly true.The real national glut is in houses.Real esate investors prefer rental apts. right now.And NYC is one of the best rental markets in the US.But more importantly - we are only getting this opportunity because the housing market is weak - as it was in 1990 when I bought my apt. in Tudor City.BUY LOW - SELL HIGH.The national housing market will slowly recover.In time there will be another boom because that is how markets behave.15-20 years from now every apt. in this development will be valued over seven figures.
And in the meantime owners can do what they want with the equity or just enjoy the security of stable monthly costs.
"Thirdly, the Guterman plan states that 75% of tenants will buy their apartments. Really?"
If they don't the plan fails.That's why I remain convinced they will allow unrestricted resale.All I expect is a time restriction that allows Guterman to unoad his market rate apts. without competing with insiders selling on the cheap.That would be beneficial to everybody.It establishes clear market values at Gutermans price.
"Finally, there is the monthly maintenance fee which the advocates for buying say will be under $1000.00 per month. Maybe initially but that will not last long soon, it will be over $2000.00Take a look around Manhattan and see what others pay in maintenance fees."
Take a look at other Manhattan CO-OP DEVELOPMENTS.Stand alone buildings are irrelevant.Tudor City and the Grand St Co-op buildings are in greater need of repairs than ST/PCV.
I know.
I've lived in BOTH developments.
Their maint fees have remained 600-700 a month for over ten years,up about 100.00 amonth since 1990.
We would start with a capital reserve for contingincies.And the flip tax should produce a minimum 10 million a year and rising annually which will help offset unexpected cost fluctuations.And as owners we won't have unwanted MCI's shoved down our throat anymore.WE decide what needs repair and what we can offord - as a community.
- October 30, 2010 at 10:27 PM
- maxschactman said...
"I just bought my Stuy Town apartment for $300,000. Now, it's beyond the flip date restriction (say 12 months later) and I'm selling it for $400,000.. I figure a hundred grand is a nice profit."
You'd be selling much too low.If you have aone bedroom in ST it should be valued at a minimum 500-550K.Again - the district avg is 775 pr sq ft. Now take a look at some of these cheesball condos in this neighborhood - thrown up by developers for a quick buck.The development on 23st is no paragon of quality construction either.These apts will be worth far above the buying price.More importantly it's not what they are worth NOW - when the market is down.It's about the future when the market is inevitably strong again.
"You're trying to sell people a bill of goods using phony market rate projections."
And you have failed to do your homework.Your making assumptions and they are off base.
"The market will be whatever the market will be. Good luck with that."
MARKETS will be what markets will be.Bull markets follow bear market just as the sun rises and sets.You buy into a down market and sell into a bull market - NOT THE OTHER WAY AROUND.
"You bought a Tudor City apartment for 42K. Do you think anyone in ST/PCV will be ever offered that ridiculously low number?"
Despite the housing crash that smae 42K apt is now valued at well over 100K.I sold it 2003 for 135K,and it's probably valued at close to that level now.Yes,we have to pay 250-350k for these - much bigger apts -because despite the housing crash values are STILL way up from 29 yrs ago.
And so it will be in the future when this market fully recovers.
And where that studio apt was cheaper so was the equity.These apts have will have six figures of equity built in right from the moment we buy.And in the future it will be considerably higher.
"Sure if I can buy my apartment for 42K, I'm there. But it'll be more like 600K and I certainly don't have money available for something like that. I would HAVE to take a mortgage, which is another DEBT added on to the ones I already have."
OR you could keep paying annually rising rents.Your choice.The mortgage is FIXED for thirty years.
30 yrs from now EVERY RENTER IN THIS DVELOPMENT WILL BE LONG GONE -PRICED OUT BY SO-CALLED "RENT REGULATION".
The only current residents who will still be here are those who bought and stabilized their monthly costs.
- October 30, 2010 at 10:28 PM
- maxschactman said...
"STR, it is absolutely as clear as daylight that Max is a shill for Gutner"
MARK SUALL 511 E. 20ST - Resident since 1970 - tenant since 1990.
Enough disclosure for you?
Are you a shill for Lefrak?
Because if this conversion fails the only beneficiary will be another predatory landlord who will jack rents as quickly as possible.
"He talks the talk of a slick, glib, commission-hungry salesman. He reminds me of those guys who used to be on the Home Shopping Network sell "priceless gems" for peanuts."
Truly amazing.
Thousands of modest and middle income families and residents need to stablize their monthly costs or rent "stabilization" will eventually price them out.And in the process they may be offered a once on a lifetime opportunity at greater financial freedom and security.
And you would deny them that opportunity,all based on assumptions.Like I said.
"My one-bedroom apartment is not worth taking on a shitload of debt for. Never was and never will be."
Fine.Stay rent regulated.No one is forcing you to do anything.But your mistaken assumptions about value will come back to haunt you in an ugly way in the future.
October 29, 2010 6:26 PM
"I personally do not believe that Max is a shill. He does, however, have a very rosy picture of the unfolding of events if we were to purchase which may or may not come to fruition."
Appreciate that.Call me Mark if you guys prfer,since it's my real name.
Yes,I agree,I HAVE painted a rosy picture.So let me address that.
Obviously unrestricted resale is the most important issue in regards to value.And tenants are being asked to assume six figure of debt to buy these homes.I simply don't think they'll buy without unrestricted resale.And if they don't buy the plan fails.That's why I believe the TA will eventually have to allow unrestricted resale rights.
Then there's the question of true market value.What if Guterman CAN'T sell apts for 700-735 pr. sq. ft? That's the real issue in regards to value.He might have to drop them another 10%.But the fact is he could drop them even more and it would still establish a value that gives all of us solid equity from the moment we buy.In THIS market if you can buy a home with equity already built in - take it.The real value comes in holding on and waiting.In the future there will be substantial - live changing equity.
"I do feel though that we need to know what the plans are regarding bringing this place back to some semblance of order and cleanliness before we commit to a purchase."
Horse first,then the cart.We have to take control of the cummunity to have the power to address quality of life issues.TS are responsible for the dormies and dog crap.Renters and owners both want this problems addressed.Re-impose the original rental standards and that would weed out the dormnies.As for dogs it's a tougher issue.I absolutely love dogs but they don't fit well in this community.My sugestion would be to grandfather them out.It would take years but over time their population would decline and the issue would subside.Meanwhile,impose communituy fines for those who don't pick up after their dog.
651 East 14th said...
"Its amazing the amount of mis information on this post."
Yes,folks are really struggling with this.Too many assumptions.They need to do alittle homework before making assumptions.
"I will admit the wild card is capital improvements. Who knows how much that is but its not a deal breaker."
A lot of MCI's have already been done.That's why we're payin' for 'em every month.Rooves,elevators,windows,electrical,lobbies and greenspace.That puts us way ahead of wher Tudor City was when it converted.And despite the need for major repairs Tudor City's maint fees have been very stable.
- October 30, 2010 at 10:29 PM
Some more of your misinformation:
#1. Nice idea, the save rent stabilization people floated it, but no landlord will ever agree to it. So it's just theory.
#2 Guterman himself stated in T&V maintenace will be 1500 for 1 bed 1800 for 2, etc..
For #3 no real misinformation just your opinion, my opinion is this is a 60 year old money pit that is possibly sitting on toxic soil. Imagine what that will do for your re-sale!
On #4 I agree any landlord tries to end RS for former MR apts but I thought date was 2020 for some reason. However, for non Roberts rent stab. apts, as long as law keeps getting passed it could go on forever, as long as enough apartments stay in the pool then there will be enough pressure on Pols to make it happen. Thats why I advocate no conversion at all, email@example.com if you agree.
#5 STR already addressed except he forgot to say that 175k income must be for 2 consecutive years.
Looks like your right there is alot of misinformation on here. Mostly in your post. Finally, not sure why you brought Fox news into this. I guess you watch NBC the propaganda wing of the Democratic party, huh. Maybe that where you learned how to spread your misinformation.
- October 31, 2010 at 3:25 AM
651 East 14th said...
"4) Everything max said about rent stab is true. If another LL buys the place they will try to evict tnts in 2017, if the place is converted and tnts are the owners that will not happen, renters will be left alone. "
Not true. You don't know this. IF rent stabilization sunsets, there will be no legal protections. Your 2017 (or 2010) date (depending on who's talking) is the expiry of the J-51 benefit, at which point ONLY the 40% (roughly 4500 renovated apartments) would no longer be Rent Stabilized, if stabilization laws are still in effect.
#5 is absolutely wrong, as STR points out, you need both income and rent maximums for luxury decontrol of an occupied apartment.
- October 31, 2010 at 9:40 AM
Anon "for non Roberts rent stab. apts, as long as law keeps getting passed it could go on forever, as long as enough apartments stay in the pool"
Agreed. But, through natural vacancies, that number will slowly creep up and by 2020 the number of former MR tenants will much greater than 40%. TS's dream a majority MR complex, full of transients and students. Pretty grim.
- October 31, 2010 at 2:06 PM
Anonymous/MISINFORMATION MAN!
1) You say "any LL"? To explain, the tenants association would be your LL, they committed to not tampering with rent stab tnts. Did you read that in my original post? THIS IS THE BIGGEST POINT, PEOPLE THAT DO NOT BUY WILL NOT BE KICKED OUT IF THE TNTS BUY! EITHER WAY, WHO WOULD YOU RATHER ROLL THE DICE WITH, THE TNTS or A LL?
2) $1,500 was a mis print or more mis information. Tell me what $1,500 is based on? Do you have any backup? I base my $900/1BR main on a 125M annual operating budget, increased 15% from 2005 management office numbers. REAL NUMBERS! Disprove those numbers and you'll have something, until then your MISINFORMATION MAN!
3) ??? I dont know how to respond, just trying to make a responsible acquisition. If the cap improvement costs are out of control then fine, no purchasing, the TA shouldnt be prohibited from looking into it.
4) You want the most apartments to stay in rent stab to keep rent stab going? Not buying it as a strategy. As I've said before your best bet is to stick w the tenants assoc, they have pledged to keep your apartments rent stab.
I think you are BEAR from the other stuy town lux living blog? Is that true? Considering its halloween you should go to the oval with a big M on your shirt. Keep up w the Fox News, bud, your prob the only stuy town tnt watching!
- October 31, 2010 at 8:01 PM
All I can say is that I'm ecstatic that you weren't elected to the TA board. I actually voted for your candidacy, but if you had stated this as part of your agenda, I wouldn't have.
Unrestricted resale will be the death of ST/PCV as all hopes for sustained affordability will be lost. Unrestricted resale simply panders to the greed of tenants looking to make a windfall at the expense of the greater good of the community.
Good luck to everyone who hangs around for this bloodbath. I won't.
- October 31, 2010 at 10:27 PM
You just love to post misinformation. TA will never be landlord, that's just a ridiculous statement. They don't have the money for that. They may work with the landlord but they will never be the landlord.
Your numbers are bogus too. You're basing your calculations on all 11250 apartments paying that much. Some rents are less than that, owners will pick up the rest. What about a reserve fund? Are you going to operate this large place with no reserve. Good luck with that. Keep watching NBC and only working with the facts you like and ignoring all the others and when you are facing foreclosure I'll buy your place for a song. And that's The Bear to you!
- November 1, 2010 at 6:12 PM
This $125 million operating budget doesn't account for any debt load the complex might be carrying. People are playing with numbers here on the assumption that all or a majority of the apartments would be sold quickly to eliminate the bulk of the outstanding debt. I really doubt that this would be the case.
Remember 1 thing. MetLife owned the place free and clear (they paid for the construction in cash) and for most of the time paid little or no property taxes because of abatement's. As soon as Tishman came in and tried to operate with the huge debt load, they failed and Met ran cackling hysterically all the way to the bank.
I really suggest that EVERYBODY wait until the TA advisers (Molis & Paul, Weiss) release their analysis, projections and recommendations on the project. THEN, everyone can judge with real facts and hard numbers what the deal will be.
All this bullshit back and forth is pointless, and all based in half truths.
And finally, if people truly want to preserve their long term living stability, then they must be "masters of their own destinies" and make decisions that grant them independence. We can't count on Albany or politicians to preserve middle class housing, so the determination will be to stay here or go. But only when all the facts and figures are in black and white will people have all the information to make those decisions.
The one thing I'm certain of is that ST/PCV will never again be the same kind of community that it was from 1947 - 2006.
- November 1, 2010 at 8:49 PM
- maxschactman said...
All I can say is that I'm ecstatic that you weren't elected to the TA board. I actually voted for your candidacy, but if you had stated this as part of your agenda, I wouldn't have.
Unrestricted resale will be the death of ST/PCV as all hopes for sustained affordability will be lost. Unrestricted resale simply panders to the greed of tenants looking to make a windfall at the expense of the greater good of the community.
Good luck to everyone who hangs around for this bloodbath. I won't."
Thanks for the vote.But it makes no difference.I would have voted with the majority on the board.That's because the realities of the situation have both sides boxed in - the TA and CW Capital.
We will undergo a non eviction co-op conversion.Those who want to remain rent regulated will see no change.The rest will buy.There will be no resale restrcitions other than a waiting period and a flip tax.That's the only way to meet Guterman's 75% tenant participation threshold.CW Capital will likely compromise a little on the price so that some apts can be set aside for permanant regulated rentals without raising the insider price.The set asides will satisfy the politicians who have to do SOMETHING for the affordable housing advocates.
And that's it.
And finally,once again,I see nothing "greedy" about middle income families who want to stablize their monthly costs for along time to come and access the equity in this deal.For them it will mean money for college educations,family crises,medical emergencies,retirement,reverse mortgages for those over 62,money to finance a business or wipe out debt.
Money they could otherwise never hope to access no matter how long they work.That is a wonderful thing.These are not wealthy people,fleecing low income investors.These folks are YOU and ME struggling like hell to get by.Many of them have little or no retirement savings.This is their chance.I hope as many as possible can take advantage of it.
"Unrestricted resale simply panders to the greed of tenants looking to make a windfall at the expense of the greater good of the community."
I challange you to specify what that "greater good" is?
Would that be the endlessly rising rents imposed by the rent guidelines board? For many tenats "Regulated" no longer equates to "affordable".How long before ALL rents are above 24K? Even if they expend rent regulation indefinately and lift the deregulation threshold what difference would it make? Eventually,BY LAW,all renst including regulated will be so high this will become an entirely upper middle income community.
The greed factor can be applied to one entity and one entity only - another predatory landlord who would jack rents as quickly as possible,pile on more unwanted MCI increases,challenge every favorable legal ruling and laugh in our face when we complain about "dormies"."Dormies" he'd say [in private of course]."We love 'em! They fill vacated apts at market rate and are diving the regulated renters out!"
THAT's our enemy.
And if this co-op conversion fails that's who we'll have to deal with next.
- November 2, 2010 at 2:52 AM
Well Mark makes a lot of sense to me. I would like someone to please explain to me just what exactly this "long term affordability" actually means. I don't see it as existing unless we buy our units. I'm not saying to necessarily stay in stuytown (unless it comes back), but at least we would then have some options in our lives.
- November 2, 2010 at 9:57 AM
"I just bought my Stuy Town apartment for $300,000. Now, it's beyond the flip date restriction (say 12 months later) and I'm selling it for $400,000.. I figure a hundred grand is a nice profit."
I am a Peter Cooper resident and am curious on how you were able to purchase your apartment already?
- November 2, 2010 at 4:37 PM
- maxschactman said...
"I would like someone to please explain to me just what exactly this "long term affordability" actually means. I don't see it as existing unless we buy our units"
Of course.
But let me lay out what could have been the "affordable" options regulated rent advocates would like.
First,the politicians should have prevented the erosion of rent laws.If,over the last ten years we'd had no involuntary MCI's and annual increases of say 1-2% all our rents would be 25% lower.
But the politicians failed.
Instead we have avg 18-24K a yr. regulated rents,rising every year,soon to be "affordable" only to the upper middle class.Now our only option is to do a smart job of managing that evolution.
So it's too late for the law to save us.
We could have gone with the old time,post WWII type NYC co-op.
I grew up in one - The Grand St co-ops.In 1956 my dad bought our two bedroom there for about 1100 bucks.Cheap,even by 50's standards and the equivlant of about two years monthly costs combined.Of course he had to sell back to the co-op for only an inflation adjusted,break even price.But what he got for that was very low monthly costs,lower than average rents.That was the whole idea.
Put that same concept in todays dollars here in ST/PCV and our apts would cost 35-50K.If that were our option I'd support it in a heartbeat.It would mean a reduction in monthly costs for everybody.The down payment would be 5 or 10K and the mortgage payments would be a few hundred bucks a month.Added to maintenance fees it would have been cheaper than regulated rents.
That's the only co-op alternative.
I'm,getting a lot of nasty criticism here,mostly based on assumptions but nobody has offered an alternative plan.
I just did.
But there's one major problem.It doesn't raise enough money to buy the development.The apts MUST sell for six figures to buy the community from CW Capital.And all they're trying to do is break even.So we can't even accuse THEM of greed.
Now I ask you this.
If resale restrictions take away the equity value for buyers why bother to buy? They have to come up with substantial up front costs and,in many cases,take on somewhat higher monthly costs.If they don't get the market price equity value it's money for nothing.
They'd be better off staying rent regulated.
That's why there can't be resale restrictions on price.Buyers won't get the lower monthly costs associated with old time co-ops so without the equity there's virtually no incentive to buy.
Then the deal fails and a landlord wins.
And what kind of resale restrictions would even make any sense? Even Mike Mckee couldn't articulate any at last Saturdays meeting.He wants restrictions but can't say which kind or how the community would benefit.
Know why?
Because there are no such sensible,productive restrictions.
All they would do is deny thousands of tenant buyers access to the equity that could so improve their lives.That would be nothing short of downright mean spirited.Particularly when you consider they put up six figures.
One more thing on this subject -
Ten years ago - with no outside influence - the Grand Street co-ops lifted all sales restrictions.No "Guterman's" involved,it was the tenants choice.We're talking about middle and modest income folks who could hardly be characterized as "greedy".
Food for thought,no?
- November 3, 2010 at 4:51 AM
I got it now Mark. Your family lost out on the payout from the Grand Street co-ops, so now you want yours.
- November 3, 2010 at 2:52 PM
I asked this question before but no one answered. Guterman plan is to charge 290 - 300 per sq. foot. Is that for a renovated apartment? Which would mean, (I'm rounding for simplicity sake). 1000 sq feet (2 bedroom) * 300/sq foot = 300,000. OK, still with me? Does that mean the same unrenovated apartment would sell for 250,000.00 (300,000.00 - 50,000.00 in renovation costs)? If not, don't you think lawsuits over this will slow down your hyper accelerated schedule. Even CW says 2013, you're saying 2011.
- November 3, 2010 at 4:45 PM
- maxschactman said...
"I got it now Mark. Your family lost out on the payout from the Grand Street co-ops, so now you want yours.
LOL! If you'd read my prior posts you'd know I more than made up for it at Tudor City,twenty years ago.
You take cheap shots but provide no alternatives.I did offer the unworkable alternatives but you don't address that either.In other words,in the absence of anything constructive to add you throw cheap shots.And for what? Apparantly you specialize in spiting your nose......
I have lived in a traditional co-op and participated in the conversion of another.Been there,done this.That's why I understand what's at play.And I'm talkin' about YOUR home.But instead of tryng to engage in a constructive discussion you'd rather take self defeating cheap shots and inadvertantly support a landlord.
Go figure.......
- November 3, 2010 at 8:05 PM
Thank you for the stimulating analysis and pay no attention to the negativism being spread by STPCV's strange new species- the teabagger /socialist. They're angry and they love their government stabilized apartments.
- November 5, 2010 at 7:15 PM
- maxschactman said...
"I asked this question before but no one answered. Guterman plan is to charge 290 - 300 per sq. foot. Is that for a renovated apartment?"
Renovated apts might go for a slightly higher price,that's all.
- November 5, 2010 at 7:28 PM
- condo manila said...
What a stunning condo building!
Deirdre G
- December 1, 2010 at 12:05 AM
ST/PCV are very old buildings with small rooms and cannot compete with the newer buildings. They will have to be priced low to fly - look at the mess created in the conversion of the former Met Owned Parkchester in the Bronx, that shares the same design as PCV/ST - with part condo and part rental the place is a mess and remains a mess - the condos lost value - and are still flat - and banks will not loan there. Just because we are in Manhattan you cannot expect these Apts to command super high prices - face it we are paying way to much rent in this college dorm dump - it has become a high priced project.
- March 28, 2012 at 12:31 AM