Nice Place You Got Here....

Yesterday I had my first visit to the MiMA building on 42nd Street off Times Square. As someone whose areas of specialty are below 34th Street, it just hasn't been that high on my must-see list. But I have to say I was impressed. I had in my head that the building was all the way on the Hudson. This isn't true. It's actually at the corner of 42nd Street and Dyer Ave (which is basically 4-block long access road to the Lincoln Tunnel that intersects between Ninth and Tenth Avenues). So it's about 1.5 blocks from the nearest subway stop, and 2.5 blocks from the majority of subway lines that run through the city. That's not bad! Also, it's near the Playrights New Horizons Theater, and the new Pershing Square Signature Theater. Those are two buildings I wish I got to more. You're off Times Square, so no hordes of tourists, but you're nearby for those few times you feel the need to, you know, remind yourself why you love New York City so much. Also, there's two Starbucks about one block away. A very important consideration to me! MiMA was developed by the Related Companies, and they are known for doing upper to ultra-luxury apartment buildings (doorman, etc), but I liked the floorplans I'm seeing - particularly that for the studio - it actually has a separate sleeping area; in some buildings the studio layouts actually force you to put your bed right up under the breakfast bar (at least you don't need a night table that way). Also nice is that that there is laundry in EVERY apartment, even the studios. I really liked the common areas. There are several large rooms that you can book (My meeting was in club room M-1, which had a large conference table, comfortable looking couch and a raised bar/table). Also there is onsite pet care (Dog City they call it). The health club is impressive. The terrace is large and they have a separate area they call "the lawn" which also has a seating area and an outdoor movie screen! (There is also an indoor screening room, and a catering kitchen!) I loved the lobby, which was very large with several groupings of bright, comfortable seating. I appreciated that after I identified myself to the doorman as having business in the building, he didn't begrudge me lingering a few minutes to check email and pack a few things away before I left. When people are looking for very luxurious accommodations (and this building definitely is very high end - studios starting around $4500/month), often they don't want to be west of Ninth Avenue - either because they want to be closer to the action or because they don't want to be near traffic. I'd say this building really isn't affected by those things, and anyone with a budget of $4500 or higher should check it out.

Bedbug Scare Not So Bad This Year

You can't help but read anything about bedbugs without starting to itch a little... and then running to burn your sheets.  But Crain's brings good news!

http://www.crainsnewyork.com/article/20120101/HEALTH_CARE/301019970/1020

Yes it seems that all our vigilance is paying off - thank goodness! But just as with other scourges, bedbugs never were completely gone, and they are still out there, as the article says, particularly in hotels. So please, keep taking precautions, and we will all sleep a little better at night.

Tenants Catch a Break For the Moment

Tenants catch a (temporary) break on rent regs | Crain's New York Business

Governor Cuomo seems intent on renewing rent regulations that keep our rent stabilized apartments stabilized.  Like the debt ceiling, many people have based their way of life on rent stabilization regulations.

While the average cost of a one bedroom apartment in Manhattan was $2406 in 2009 (according to CitiHabitats, the largest rental brokerage on Manhattan by transaction), the median income for 2009 in Manhattan is only $68,706. And that income hadn't risen much from before the bust, while rental prices had certainly dropped.

Using the rule of thumb of 40% of income, that median income would qualify a "household" (and we don't know how large this household would be - it could be an individual, couple or family with1 or more children) for a monthly rent around $2290. So already the average household making the average income is paying more than the recommended 40% maximum of income.

On the face of it, it does seem that rent stabilization is needed. However, as an economist (well, I majored in economics and remember just enough to do damage), I recall that by creating an arbitrary ceiling in one part of the market, you can artificially inflate the other part. In other words, because there are a bunch of apartments that are regulated in rent, people don't move, and therefore there is a housing shortage that results in other people overpaying for the remainder of apartments.

In practice, I don't know if that is true. Most of the remaining rent stabilized apartments on Manhattan are in northern Manhattan above 96th Street. But anyone looking for an apartment below 96th street with a budget of under $2400 certainly knows that the pickings are slim (and even slimmer below 34th street). So, on the one hand, maybe people pay a little more for destabilized apartments than they would if all apartments were subject to the same regulations. On the other hand, in Manhattan that doesn't seem to matter much.

One thing I would say is that rent stabilization does give the impetus to turn apartments over and renovate them really nicely. Which would seem in contrast to the arguments that landlords can't adequately maintain their buildings. But when you have $40,000 or more in property taxes a year, and you have 5 apartments where just one is still rent controlled at $1000 a year, you can see where the math doesn't add up. Heating oil can run thousands a year, so can property insurance. And that's all before you start thinking about reserves for capital improvements. That's where rent stabilized landlords get bitten.

On the other hand, does rent stabilization serve as a deterrent for positive change on the community side? Intuitively I can think of situations where people stay in apartments just because they have such a cheap rent. But let's get all Freakonomics on this issue. Is there a wider or more tangential effect?

One thought I have is that rent stabilization could deter entrepreneurship. In otherwords, people can keep working lower paying jobs in order to stay in the same apartment. This follows from the idea that union membership in the industrial parts of the country made it less likely for businesses and people to innovate. After all, if you're making good money, why change what's not broken? Except that it is broken.

I am not for pushing protected tenants out of homes. They have rights and it does unfairly punish the elderly and lower earners. But from a theoretical point of view, is there some way we haven't looked at it yet that maybe we should?

Food for thought.

2 Easy Extras to Keep Up with the Times

When I first moved to New York, I heard all the cliches about New York apartments. They can be small, dark, dingy, etc.  And they had no amenities at all. No air conditioning, no garbage disposal, and absolutely no dishwasher.

Fast forward a decade or so. Landlords now have plenty of very inexpensive options when it comes to two amenities: air conditioners and dishwashers. And, I have to wonder if it's not time that all landlords realized how easy it is to upgrade all units if possible to include those two amenities.

Permanently plumbed dishwashers come in sizes as narrow as 18", which is appropriate for a studio or 1 bedroom apartment. Permanently installed dishwashers are the lowest maintenance option (as opposed to countertop or portable dishwashers) because the hose and drain connections do not have to be touched by the tenants, thus cutting down the possibilities for leaks. Basic models are very affordable . Installation may require the removal of the current counter top and cabinet base, but the look is far more modern, and tenants who would have objected to a lack of cabinet space in general will be less likely when they realize they are giving it up for an amenity. Overall, landlords looking to add a sense of the upscale to their apartments can accomplish it fairly cheaply.

Air conditioning is another amenity I would love to see included. Tenants expect to be running in the summer. Window units are very affordable and much appreciated in each bedroom and living room if possible. Have them installed securely with brackets and good insulation by a super - in the top of the window frame if possible -  so tenants will not be tempted to remove them. Landlords who don't want A/C units hanging out of windows can consider Floor A/C units, which are more expensive but completely interior. The ultimate is installation of Mr Slim ductless A/C units.  Though it is more expensive, the unit lasts much longer, and energy efficiency rebates are available for many of the models.

When I was in college, I sublet a room for a summer share with two other female roommates. Fresh out of the dorms, I was amazed to find out this apartment had a rare commodity - a portable dishwasher. My new prospective roommate said the three girls had each agreed to pay an extra $10 a month - total $30 a month - for a dishwasher. The landlord had agreed and provided a roller-type dishwasher that fit in a corner when not in use but had to be positioned in front of and hooked up to the kitchen sink to operate. The landlord spent $300 on this, made it back in 10 months, and had an amenity that she could tout to future tenants for the next 5-8 years. If she had installed it under the counter, it could have lasted longer. So in the long run, dishwashers pay for themselves.

Certainly there are still many "budget" New York apartments out there, but as the high end gets pushed higher, little traces of luxury in less expensive apartments will raise the bar. Universal dishwashers and A/C are a great place to start. These are the sort of amenity that is still rare enough to be highlighted in the pay-by-the-line newspaper ads, and apartments equipped with these small concessions to modernity will rent faster and for more.