Jonathan Mines of the Mines Group; David Reiss, former RGB chair; Rafael Cestero of Community Preservation Corporation (Getty, LinkedIn, Mines Group)/Graphic by The Real Deal
The Real Deal quoted me in NY’s Rent Stabilization Crisis. It reads, in part,
The goal for rent-stabilized housing, as panelists from the landlord and tenant sides agreed at a sold-out New York City Bar Association event last week, should be a return to balance and predictability.
In that perfect world, owners get enough revenue to sustain their buildings and earn modest returns, tenants pay their rent, and those who cannot afford it are subsidized by the government, not by the landlord.
Reality check: This scenario is not readily achievable. It might even be impossible.
The consensus among the expert panelists was that the politics that governs rent regulation in New York will continue to result in overcorrections as legislative power swings from one side to the other.
“There is no way that a political process is going to create a good outcome for tenants and buildings over the long run,” said Rafael Cestero, CEO of the Community Preservation Corporation.
Cestero said 36 percent of the huge portfolio of rent-stabilized loans that CPC services have a debt service coverage ratio below 1.0, which means the buildings securing those mortgages lose money every month.
When owners had the upper hand in Albany, “they kept asking for more and more,” he said. “The dynamic has now completely flipped. Tenants have the power in Albany, and continuing to ask for more and more and more is just going to perpetuate the cycle of where we are today.”
And where is that?
“I do think,” said former Rent Guidelines Board chair David Reiss, “we’re in the midst of a slow-moving train wreck.”
