Hello John,
Thanks for the Reply. I'm just an investor and have only just started my passive portfolio in the Hudson area.
Agreed -- Many of that list will likely not pass into approval. Or at a minimum, have a decrease in the number of units. The locations on that list were primarily chosen due to them falling under the criteria of "Center City Core" // "Gateway Commercial" // "Neighborhood Commercial" on the zoning master list . That, in combination that many projected to be less than 4 stories high, should give them a decent shot at getting approved.
The rent control is surely an issue for 4+ unit properties. I am curious what is the percentage of rent controlled properties in UC?
That's a shame if people aren't renovating due to rent control -- Rules are meant to be broken! Ambiguity in the language "shall not exceed 15% unless an efficient landlord cannot meet operation expenses or make a fair return on his/her investment.".
If they think that they won't be able to charge enough then there are surely ways around that. Do you know if they allow fair return to factor in the opportunity cost of renting it out at fair market value? Why not just finance it --> increase rent 15% + interest cost (justifiable operating expenses and is a free $ Loan) --> gain on capital appreciation and 15% rent. More so, if they ever leave. I know larger public company apt buildings doing 21% increase between tenants to combat regulations...
Personally, I think it's more due to risk aversion and laziness on behalf of the landlords. Easy to maintain a cheaper place w/ tenants that aren't demanding much... but that opinion is solely on conjecture & a small sample size.
Most of my interest in the Dev projects is in the ripple effect that you mentioned. New Dev projects bring upscale apts --> New demographic --> Increased tax revenue and local spending + Rents go up and stabilize --> shift in local commercial ops --> increase reno's, tear downs and higher end apts to cater to new clientele --> and cycle repeats... Aka gentrification. But, this is also a chicken before the egg situation. Without new development or reno'd apartments the tax base won't increase and the commercial shops won't change (at least not quickly). So, new demographic won't pile in and cause the aforementioned changes etc.
What kind of properties do you own? and what price stabilization have you seen (YoY change and any discount for multi-family vs condo's)?
Do you think UC wants to be gentrified? #1 of most of the city officials goals is to "preserve the character" of the area. Which I read as, resist gentrification and keep prices low to keep current populace & voter base.
