What have NYS investors done to counter the new tenancy laws?

Question

What have NYS Landlords done to counter the new tenancy laws?

Harriet Baldwin · Answer

@Joshua Israel there is a very active landlord attorney in Buffalo & Rochester who has great insights, not sure I can post her name under forum rules, pm me if you want specifics...

I attended the Unify Upstate Landlords conference yesterday 9/10/19 at Turning Stone.  Lots of lobbying and coalition building are on the horizon.  There was an open Q&A with an experienced upstate landlord attorney, the practice/adjudication of the new law isn't exactly settled yet, and ianal, but some actions by landlords include:

-move to eviction more quickly

-raise rents (and in some cases offer early payment discounts)

-increase qualification requirements.  Anecdotally, some landlord in NYC now "requires" income of 50x the monthly rent. Yes, fifty.  I assume so anyone with less income than that will offer to pay in advance so they can be approved despite falling short of the income hurdle

The new law seems likely to have the biggest impact on the lower end of the market, and it's hurting tenants as well.  Folks are no longer allowed to pay extra security to overcome falling short on qualifications, and with longer eviction processes landlords are raising and/or becoming more strict on those qualifications.

Karen F. · Answer

I'm not in NY, but I can tell you, the minute that the coronavirus moratorium on evictions hit, my rental criteria for my vacant units went WAAAAAY up.  No one was gonna get in without max deposit, and a perfect record.

Trevor Ewen · Answer

@Joshua Israel

I think @Wy Kay has the right idea. For my part, I advise #2 and #3.

The best success you'll find in heavily regulated states will tend to be in the narrow zone of working directly with government to receive grants and benefits for taking the kind of risks that the open market will not support. Think affordable housing, government auctions, local development appropriations. These things require political knowledge and influence. If you just want to run a small operation then there are plenty of states that will let you do it with less headache.

Wy Kay · Answer

https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwir6-nJoMrkAhWLct8KHfGWB-MQzPwBegQIARAC&url=https%3A%2F%2Fwww.forbes.com%2Fsites%2Fjackkelly%2F2019%2F09%2F05%2Fnew-yorkers-are-leaving-the-city-in-droves-heres-why-theyre-moving-and-where-theyre-going%2F&psig=AOvVaw2Y9UlAUGL_aQalPwNyQlNY&ust=1568342323364247

According to Bloomberg data, people are moving out in increasingly larger numbers. Although it is referring to NYC, some of the reasons like high taxes are not specific to NYC

Wesley W. · Answer

As @Harriet Baldwin has demonstrated, we have to start fighting back by organizing.  For too long, the NY landlords (especially upstate) have just kept their heads down and been good soldiers, paying our taxes and providing affordable housing through ethical business practices.  Meanwhile, the PAID tenant advocates are riling up the voter base and thus the legislators with their biased messaging and agenda.

People are leaving NYS in droves, so if you think that's a myth, you are either reading the governor's propaganda or just ignorant.  What's worse, is we are losing taxpayers at a faster rate than we are losing residents.  I'll let you connect those dots.

To be honest, there would have to be a sea change in regulations for me to spend another of my hard-earned investment dollars in NY real estate, and I can tell you my sentiment is extremely popular with other landlords in the state.  For the record, put me down for choice #2, but it may end up being #3 based on how the next election cycle or two goes.  Since the HSTPA 2019, I've stopped buying in NY and I'm actively looking for acquisitions in states with more balanced legislation.

If you invest in NY and want to get involved in the landlord advocacy groups that have formed over the last year, feel free to PM me and I will connect you.

Kris Murph · Answer

Talking about the small guys here, I manage an 11 unit building in upstate NY. The rent is very very low, 650. Charging last month's rent was a way I could keep people who can't afford to pay out of the units. Big difference between 1300 down and 1950!! I'm not sure how I am going to keep tenants from using their deposit as last month and leaving the unit dirty now. These laws hurt the small guys for sure. You guys have any suggestions?

Aqil Dharamsey · Answer

Although it is a very difficult

Pill to swallow but hey if you take care of your clients, you don’t have to worry about the new laws.  In NYC Tenant staying in your properties without paying any rent for months is very common, it was just matter of time before it expanded throughout the state.

Yes tenants can be a PIA at times, but if the communication is clear and expectations are front loaded, I think some of these heartaches can be avoided.  Of all the changes, I think I am going to miss “cash for keys” the most...

John Stracquatanio · Answer

My company had to pivot from full renovations to more moderate renovations packages that fit within the new $15,000 capital improvements regulation. There will be a steep decline in higher end apartments since they can’t make the return on it anymore, but I just think that means you’ll have to be more creative.

Llewelyn A. · Answer

I wouldn't rush to conclude that the rich are moving out.

Take Jeff Bezos, for instance, a few months ago he bought 3 Condos for a total of $80 Million.

I would agree that if you have already established your Property Portfolio and it's doing well now, it will do well in to the future.

Unless even small investment properties wind up getting rent regulated, these investments will just skyrocket in value over time since Market Rate apts in NYC will become even more scarcer.

I see a silver lining here!

What have NYS investors done to counter the new tenancy laws?

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