Leaving New York City

[Gregmal]

We ve got a motivated seller! Wonder if they’re willing to throw in a dozen homeless people you can’t evict from the lobby for good measure!

 

 

[Spooky]

Do we actually have evidence / data that crime is on the rise in the US and that it is worse in big cities / democratic controlled regions?  Or is this just perception? Sorry I haven't been following this thread closely but some of these articles were interesting but a little dated now:

 

https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/

 

https://www.npr.org/2022/10/27/1131825858/us-crime-data-midterm-elections

 

From the FBI's 2021 report it looks like the murder rate went up in significantly from 2019 to 2020 but it is still 30-40% lower than the 1990s (this is national data).

[rkbabang]

13 minutes ago, Spooky said:

Do we actually have evidence / data that crime is on the rise in the US and that it is worse in big cities / democratic controlled regions?  Or is this just perception? Sorry I haven't been following this thread closely but some of these articles were interesting but a little dated now:

 

https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/

 

https://www.npr.org/2022/10/27/1131825858/us-crime-data-midterm-elections

 

From the FBI's 2021 report it looks like the murder rate went up in significantly from 2019 to 2020 but it is still 30-40% lower than the 1990s (this is national data).

 

 

Well, yeah, violent crime has been decreasing steadily for 30+ years, it can go up quite a bit and still be lower than it was in the early 90s.

 

[Castanza]

32 minutes ago, Spooky said:

Do we actually have evidence / data that crime is on the rise in the US and that it is worse in big cities / democratic controlled regions?  Or is this just perception? Sorry I haven't been following this thread closely but some of these articles were interesting but a little dated now:

 

https://fivethirtyeight.com/features/many-americans-are-convinced-crime-is-rising-in-the-u-s-theyre-wrong/

 

https://www.npr.org/2022/10/27/1131825858/us-crime-data-midterm-elections

 

From the FBI's 2021 report it looks like the murder rate went up in significantly from 2019 to 2020 but it is still 30-40% lower than the 1990s (this is national data).

 

Rates are down since the 90's but the rate at which they increased over the past 5 years is I believe what most are worried about. Couldn't find any drug stats on NYPD website. Different dynamics today with the current street drugs and homeless population. 

 

https://www.nyc.gov/site/nypd/stats/stats.page

 

Raw Data

 

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_planning/historical-crime-data/misdemeanor-offenses-2000-2022.pdf

 

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_planning/historical-crime-data/seven-major-felony-offenses-2000-2022.pdf

 

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.nyc.gov/assets/nypd/downloads/pdf/analysis_and_planning/historical-crime-data/non-seven-major-felony-offenses-2000-2022.pdf

 

 

 

 

Edited April 18, 2023 by Castanza

[Ulti]

https://www.wsj.com/articles/miami-housing-market-cools-but-is-still-the-hottest-around-3928727a
 

Go Miami

[mcliu]

Trump is a brilliant politician:

 

[james22]

https://www.curbed.com/2023/05/san-francisco-doom-loop.html

[Dinar]

14 minutes ago, james22 said:

https://www.curbed.com/2023/05/san-francisco-doom-loop.html

And if you get Giuliani 2.0 from 1990, then could it all magically come back?

[changegonnacome]

https://www.bloomberg.com/news/articles/2023-05-10/new-york-city-area-rents-surge-by-most-in-nearly-two-decades?srnd=premium&sref=7zqHEcxJ

 

"Everybody complains about it but nobody seems to leave" - John Lennon c.1975 about NYC

 

"Folks are leaving for sure - but there seems an endless supply of newbies moving to NYC just look at the rents surge as per Bloomberg article" - Changegonnacome c.2023 

[dwy000]

12 minutes ago, changegonnacome said:

https://www.bloomberg.com/news/articles/2023-05-10/new-york-city-area-rents-surge-by-most-in-nearly-two-decades?srnd=premium&sref=7zqHEcxJ

 

"Everybody complains about it but nobody seems to leave" - John Lennon c.1975 about NYC

 

"Folks are leaving for sure - but there seems an endless supply of newbies moving to NYC just look at the rents surge as per Bloomberg article" - Changegonnacome c.2023 

There has always been a massive turnover in NYC population and always will.  If you are between 20 and 40, single, ambitious and competitive there us no other city in the world that comes close to NYC (maybe London).  People flock to it because if you can make it there....As you get older, get married, have kids and want a work life balance you move out - first to the burbs and Connecticut, then further afield.  

 

It's been the case for 100 years and I can't see anything changing it.  

[changegonnacome]

7 minutes ago, dwy000 said:

There has always been a massive turnover in NYC population and always will.

Exactly…..supply demand…..call me about the end of NYC when rents start slipping & it isn’t a top three surveyed destination for Ivy League student graduates. Until then I just can’t see it being toppled.

 

Like if your in some other back/middle office city to a NYC HQ’d corporate …..ChatGPT & generative AI is coming for your cities employment activity first.

[Dinar]

As the population ages, and it is harder to climb stairs and drive, cities look more attractive, most of my parents' friends would move to Manhattan tomorrow if they could afford it.

[changegonnacome]

9 hours ago, Dinar said:

As the population ages, and it is harder to climb stairs and drive, cities look more attractive, most of my parents' friends would move to Manhattan tomorrow if they could afford it.

 

Yep the "bid" under New York City real estate is insane.......for every potential theoretical modest increase in affordability that might occur in a doomsday NYC scenario.....a cohort steps up to buy the dip so to speak.....in this case buying the dip is moving to NYC

[Gregmal]

What do you guys think in general of rent regulation risk and subsequently how to apply valuation metrics to an asset exposed to it? In a way its like owning a dual class structure stock. Its not something I've really been able to process because theres plenty of examples, like Vancouver, where it hasn't really impacted property values. But then of course theres plenty of data that goes with the conventional wisdom that it could significantly impact them.

 

One of the biggest things I think gets confused with a lot of this stuff is the "theres plenty of people who want to be there" argument. Of course it is nice to have that issue, but its really something with diminishing value to a landlord after a certain point. In a way I guess it parses the income vs appreciation argument. A great unit that is well located probably provides most the return to an investment, especially with the "everyone wants to be there" element, via price appreciation. Whereas NOI is probably not all that special. 

 

So I guess in certain areas you really need to fine tune this as a buyer. And if we are talking traded stuff, kind of evaluate the degree of certainty one has that the assets can be efficiently monetized. 

[dwy000]

2 hours ago, Gregmal said:

What do you guys think in general of rent regulation risk and subsequently how to apply valuation metrics to an asset exposed to it? In a way its like owning a dual class structure stock. Its not something I've really been able to process because theres plenty of examples, like Vancouver, where it hasn't really impacted property values. But then of course theres plenty of data that goes with the conventional wisdom that it could significantly impact them.

 

One of the biggest things I think gets confused with a lot of this stuff is the "theres plenty of people who want to be there" argument. Of course it is nice to have that issue, but its really something with diminishing value to a landlord after a certain point. In a way I guess it parses the income vs appreciation argument. A great unit that is well located probably provides most the return to an investment, especially with the "everyone wants to be there" element, via price appreciation. Whereas NOI is probably not all that special. 

 

So I guess in certain areas you really need to fine tune this as a buyer. And if we are talking traded stuff, kind of evaluate the degree of certainty one has that the assets can be efficiently monetized. 

It's always a risk as politicians seek to curry short term favor even though it causes long term harm.  I think NYC learned their lesson this in the 80's as rent control led to the opposite reaction from the goal - it drove rents up even further for non-rent controlled as nobody would move from rent controlled apartments and landlords wouldn't repair rent-controlled apartments.  Most of it got phased out as a failed experiment.  But I'm sure there will always be someone holding it up as a solution.  

[Saluki]

Well, I like to give credit where credit is due, but I can't remember who told me this pithy analysis.  He said if you want to destroy a city, the only thing more effective than rent control is carpet bombing.  

 

In the poor areas of the city, where it's meant to help, it does the most harm.  I grew up in NYC and the South Bronx had many blocks with buildings that looked like something from The Last of Us.  When you aren't allowed to raise rents, you don't have money for repairs, and many landlords just borrowed as much as a bank was foolish enough to lend them, then collected the rent for as long as possible, and eventually just stopped paying the mortgage and the taxes and eventually just walked away from the property and let it be the bank or the city's problem.  The problem is made worse by laws that make it incredibly expensive and time consuming to evict a "professional tenant" who knows how to work the system and probably has a free lawyer.  In NYC if you own a property through an LLC or Corporation you have to hire an attorney to appear for you.  How many mom and pop landlords can afford to do that for a year without rent coming in? Why don't they own it in their own name? Because they don't want someone to slip on a banana peel in front of the house and sue them into oblivion.  

 

I think the risk is less in high end buildings.  New construction isn't subject to rent control in NYC if I'm not mistaken, and even in the older buildings, if you are charging market rent and verifying income, it's unlikely that someone put his nose to the grindstone to graduate at the top of his class, get a job at a top law firm or bank and then use that lifetime of work as part of some grift to rent a place and not pay.  But at a lower income level, 9 months or a year of free rent might look like a great risk reward situation.  You stop paying rent, after a year when they finally evict you, you rent a new place under your wife's name, then a year later under your elderly mother's name, then your kids, and eventually yourself again when enough time passes. 

 

 

[dwy000]

3 hours ago, Saluki said:

Well, I like to give credit where credit is due, but I can't remember who told me this pithy analysis.  He said if you want to destroy a city, the only thing more effective than rent control is carpet bombing.  

 

In the poor areas of the city, where it's meant to help, it does the most harm.  I grew up in NYC and the South Bronx had many blocks with buildings that looked like something from The Last of Us.  When you aren't allowed to raise rents, you don't have money for repairs, and many landlords just borrowed as much as a bank was foolish enough to lend them, then collected the rent for as long as possible, and eventually just stopped paying the mortgage and the taxes and eventually just walked away from the property and let it be the bank or the city's problem.  The problem is made worse by laws that make it incredibly expensive and time consuming to evict a "professional tenant" who knows how to work the system and probably has a free lawyer.  In NYC if you own a property through an LLC or Corporation you have to hire an attorney to appear for you.  How many mom and pop landlords can afford to do that for a year without rent coming in? Why don't they own it in their own name? Because they don't want someone to slip on a banana peel in front of the house and sue them into oblivion.  

 

I think the risk is less in high end buildings.  New construction isn't subject to rent control in NYC if I'm not mistaken, and even in the older buildings, if you are charging market rent and verifying income, it's unlikely that someone put his nose to the grindstone to graduate at the top of his class, get a job at a top law firm or bank and then use that lifetime of work as part of some grift to rent a place and not pay.  But at a lower income level, 9 months or a year of free rent might look like a great risk reward situation.  You stop paying rent, after a year when they finally evict you, you rent a new place under your wife's name, then a year later under your elderly mother's name, then your kids, and eventually yourself again when enough time passes. 

 

 

Anyone with any understanding of 3rd grade economics knows price controls are stupid policy.  Capping the price of a product who's price is rising due to limited supply only makes the problem worse.  I equate it to giving an alcoholic a drink.  It stops the shakes for very short time but makes the problem worse in the long run.  But politicians rarely look out past the next election.  

[LC]

Saluki, did you grow up in the Bronx? Just curious, as I am no stranger to gun hill road.

 

On rent control - I agree. The model for a while now has been rent stabilization and 80/20 buildings.

 

Generally most people agree you need market rate units to carry the rest. True rent control is probably gone - but rent stabilization which gets escalated when a unit turns over, that is OK with me. 

 

Not a lot of broke NYC landlords. 

[Saluki]

18 hours ago, LC said:

Saluki, did you grow up in the Bronx? Just curious, as I am no stranger to gun hill road.

 

On rent control - I agree. The model for a while now has been rent stabilization and 80/20 buildings.

 

Generally most people agree you need market rate units to carry the rest. True rent control is probably gone - but rent stabilization which gets escalated when a unit turns over, that is OK with me. 

 

Not a lot of broke NYC landlords. 

 

@LC I grew up in Brooklyn, but my dad was a contractor and he had an office for a while in the Bronx because he had a lot of work up there.  When they remodeled Skyview on the Hudson in the 90s, we did a lot of the drywall and tile work in those buildings as a subcontractor. I left NYC after college to go to law school.  I don't miss it. There are things I like about NY, but the things I dislike are much more irritating when you've been away for a while. 

[fareastwarriors]

April rents smash records in Manhattan, Brooklyn, Queens

 

Manhattan’s median rent topped out at $4,241

[james22]

The thing about New York is that it’s wonderful and also very hard. There’s a glaring downside to go with every advantage. This is, I think, why there’s so much constant self-mythologizing by people who live here - it’s hard enough that you have to talk yourself into it all the time.

 

https://freddiedeboer.substack.com/p/goodbye-to-goodbye-to-all-that?utm_source=post-email-title&publication_id=295937&post_id=123731569&isFreemail=true&utm_medium=email

[Castanza]

Question for those who live in NYC: Has the city ever been accommodative to middle class life? I've always been under the impression that cities have always been a breakdown of the following three classes

 

- Poor people who embrace the shit life in the projects.

- College kids who are there to party, intern, and network

- Rich people who have the means to full 

 

Has it ever been accommodative to middle class life? Whenever I see someone complaining about not being able to make it in the city as a middle-class or even upper middle class person I think they weren't realistic with expectations (lifestyle and budget).

[Dinar]

6 minutes ago, Castanza said:

Question for those who live in NYC: Has the city ever been accommodative to middle class life? I've always been under the impression that cities have always been a breakdown of the following three classes

 

- Poor people who embrace the shit life in the projects.

- College kids who are there to party, intern, and network

- Rich people who have the means to full 

 

Has it ever been accommodative to middle class life? Whenever I see someone complaining about not being able to make it in the city as a middle-class or even upper middle class person I think they weren't realistic with expectations (lifestyle and budget).

Sure.  First of all, there are different neighborhoods - West Village is 10x more expensive than say Staten Island or Bay Ridge.  Yes, for decades you could live on a middle class salary in Bay Ridge, Bensonhurst, Flushing, Riverdale, et all.  Recently, immigrants from Tajikistan, Uzbekistan, Egypt, Yemen, et all made Bay Ridge and Bensonhurst very unpleasant.  In the 1970s of course, housing was very cheap all over the city.  Riverdale is still quite cheap, so is Inwood.

[rkbabang]

8 minutes ago, Castanza said:

Question for those who live in NYC: Has the city ever been accommodative to middle class life? I've always been under the impression that cities have always been a breakdown of the following three classes

 

- Poor people who embrace the shit life in the projects.

- College kids who are there to party, intern, and network

- Rich people who have the means to full 

 

Has it ever been accommodative to middle class life? Whenever I see someone complaining about not being able to make it in the city as a middle-class or even upper middle class person I think they weren't realistic with expectations (lifestyle and budget).

 

 

That's a good way to put it.  Cities are for the young, the poor, and the rich.   I see the pictures of the apartment in that above blog and that looks tight for a childless couple, add 2 or 3 kids and that is an impossible living situation.   You pretty much have to live outside the city to raise a family unless you are wealthy enough to afford the space.

 

[Castanza]

It is pretty interesting to see how the general city population hasn't changed much over time. What changed? Housing inventory? Housing developed/improved for specific classes? Seems like it's either develop for the rich or let your property go to Hell and rent to the poor.