Real Estate: Rules of the Games

At an old NYU course, the professor repeatedly referred to the pursuit of real estate deals involving buying or selling as The Real Estate Game. Those who inhabit an apartment in Manhattan view it as less of a game and more of a necessary obsession. Not only has it become the paranoia of numbers, as in "how much of my income is going towards paying my rent (or mortgage)" but more likely "how much higher will the rent/adjustable mortgage-maintenance go before I can't pay it and I have to move out?"

For landlords, it's a simple yet different formula. If I buy that property, how long will it take to get the rent-controlled/rent-stabilized tenants out? How many "Holdover" actions will I have to start in order to recover the apartments? And, how deep are the tenant's pockets - to pay a lawyer to prevent us from forcing the tenant to the wall and agreeing to move out simply because of the cost of a defense?

While Manhattan becomes more of a land of the rich and politicians wring their hands trying to figure out how to provide "affordable housing," the rules have been changing as fast as the landscape. Like the Skinnerian principle of Variable Ratio Reinforcement, tenants and prospective buyers in Manhattan find themselves pecking away - never knowing if they are going to succeed at getting a reward or wear out their beaks in the process. Will they be able to afford the next rent increase? Will they be able to pay the landlord-tenant lawyer the next time the umpteenth holdover proceeding is brought to evict them from their apartment?

Causes of Action permitted in Housing Court as Holdover proceedings, for example, are many and varied. Landlords can evict tenants for anything from failure to sort recyclables, to doing renovation work on the apartment without approval. Failure to permit the landlord access to an apartment is a favorite of many slumlords - because it often boils down to "he said, she said" and the one with the greatest staying power (ability and persistence in paying legal fees) usually wins. Slumlords know this and phrases like "the landlord is lying" and "that's not fair" come to tenant's minds - and are reminiscent of schoolyard in the 4th grade. Housing Court judges, with exceptions like activist Judge David Cohen, usually don't give a shit and rule for landlords.

Which leads us to consider some of the newest gifts from lame duck Governor Pataki - the lover of landlords in Manhattan. Assembly member Deborah Glick and Linda Rosenthal have been trying to make people aware of the latest round of tidbits that would make evictions easier in Manhattan. Among the new proposals is a change in DHCR rules that would make the tenant the victim of lead paint found in an apartment. This new and onerous proposal would transfer the cost of lead paint abatement to the tenant - much like saying to a parent "if you don't want to have a brain damaged child, you pay for the clean-up in your apartment." Poor tenants would end up having brain-damaged children rather than report the health danger that could result in their being evicted for the horrendous cost of a lead paint clean up done properly.

Then there's the attempt at evicting roommates who unequally share rent. Another of George's new proposals would allow landlords to evict a tenant or tenants - and would do so based upon the balance of payments collected between consenting adults and forwarded to management.

Deborah Glick has outlined many of these egregious new proposals and has clearly enunciated the danger to many of us who made Manhattan the place where people want to live. Attached is a follow-up to the news conference she held last week.

Scott Stringer has been one of the first politicians to point out that the Emperor indeed has no clothes. Apparently, Trump SoHo is just what everyone thought it was. Throughout the review process for this mega-development, in an attempt to negotiate in good faith for the community, Stringer, Jerry Nadler, Tom Duane and Christine Quinn held several meetings attempting to solve the zoning dilemma. It became a genuine team effort. But, even though the Trump boys presented their case in public and in private with the various elected officials, someone in the Trump organization let the ball drop and the real agenda started to spill out.

According to several activist organizations, Greenwich Village Society for Historic Preservation being one of them, negotiations permitting the Trump SoHo Hotel/Condo to go forward were all but done. The deal that was going down was that there would be a restrictive declaration limiting the number of days that hotel condo owners would be allowed to maintain occupancy. In return for the limitation on length of stays, specifically agreeing that the hotel would be essentially a transient Hotel (and therefore a legal use) for the 45-story edifice euphemistically called "Trump Godzilla" -- a building permit would shortly be issued.

The important element of the agreement was that Trump wanted to be able to sell rooms/apartments and the City wanted the understanding that this was to remain essentially a transient hotel. This love fest had the elements that permitted Trump's boys to start selling before the cement foundation was dry, and allowed City officials to state that we had achieved "Peace in Our Time."

Then, the Trump website went up. The online ad appeared and was quickly picked up by GVSHP and Curbed.com and it made the rounds. What was most interesting and informative about the website ad though, was that it initially offered the apartments for sale either as Primary "Residences," Secondary "Residences," or Investments. The essential fuck-up, of course, was the word "Residence." And, Primary Residence was the Primary fuck-up. This was contrary to what the schmoozers were publicly telling the electeds.

So, which character on the Sales/Website team do you think will get the shit kicked out of him for letting that particular cat out of the bag? It wasn't a surprise to anyone downtown that this was the plan all along - and that the negotiations with the City were all a smoke screen to get the foundation in and get the mortar sliding down the chute.

Stringer fired off letters about the obvious charade, also signed by Nadler, Glick and Duane, and while a building permit may be issued at any moment - there should be no doubt in anyone's mind that if construction goes forward ASAP, the smoke is not only in front of the proverbial mirrors but is also blowing out of a few asses in City Hall. The investors are lined up, the contracts are signed and the website ads are in place - albeit with a little more fluff to cover the tracks.

Oh, and P.S., look for Community Board #1 Chair Julie Menin to seriously look at the City Council slot Downtown. With the work that she has done to bring that Board together, if you know her, nudge her on. Maybe we can straighten out some of the intractable traffic and pollution problems.