While the more compounding complications the harder the transaction will be, there are plenty of places you and your pet(s) can feel safe and secure. Just know that you won’t be able to go everywhere, and it would be in your best interest to work with an agent (and likely pay them a fee) so you avoid any pitfalls or end up in a bad situation.
Read MoreStreetEasy #1 - Building Experts and Premier Agent
Last week I received the below email from StreetEasy. The building referenced, 62 E 1st, was one of the first listings I rented. It was a $5400 one-bedroom (I know, I know) in a condo building, meaning it was a sublet directly from the owner. I have nothing to do with the building itself, and any other listing would be completely different from mine.
Read MoreNew York Values #24 - Dual Agency
Sometimes only the landlord, seller, or buyer is represented, and the other side comes to the table without their own agent. Or sometimes the buyer’s and seller’s agents work at the same brokerage firm on the same team. In these instances, the same agent/team represents both sides in what is known as “dual agency.”
Read MoreNew York Values #22 - Airbnb
Airbnb is a polarizing service. I myself fall on both sides of the aisle depending on when you ask. At its core, I love the idea of being able to rent a room in someone’s home here rather than pay $80+ for a shady hostel bed or $200+ for a motel near LaGuardia airport. Or rent a whole apartment for friends rather than two double beds, again at exorbitant prices. And there’s the added benefit of getting more of the culture/architecture/feel for a place than if you stayed in a chain hotel. I’ve also used the site to long-term sublet my apartment when I traveled (with my landlord’s permission), and to rent the second bedroom when I was between roommates.
However, I hate their interface, especially for hosting. I hate their customer service (or lack thereof). And it sucks if you accidentally rent to someone who doesn’t understand how it works and rates you 4 stars instead of 5 because “this is clearly someone’s home.” Yes, yes it is. It’s in my description. That’s how Airbnb works. Or how it initially worked, before people started taking advantage of the system.
The New York value here is that it is still easy to find an apartment or room in NYC to rent on Airbnb for a relatively cheap price. Regardless of the legality of the tenant’s or owner’s listing, as a consumer you can access this city for less than a quarter of prior costs. When I came to NY as a high school or college student I slept on floors, under desks, or not at all, depending on people’s availability. My friends and I could not afford a hotel room, and many hotels won’t rent to 18 year olds. Now? You have options, guys. It makes the gap between apartments easier, too! If you have a lease ending and a few days before the next one starts, you can just Airbnb a cheap spot while you put your furniture (if applicable) in storage somewhere. Good job, Airbnb. You may not be perfect, but you get some things right.
I was supposed to write about sellers in a soft market this week, but I want to write more about Airbnb instead. Dear sellers, I promise to get back to you next week. Lo siento. Don’t list in the interim.
New York’s city council recently voted unanimously to require room-renting sites like Airbnb to supply exact addresses and personal information about their hosts (full names, whether they rent or own). The justification for this is that people are gaming the system, worsening our existing dearth of affordable housing. There are legitimate concerns surrounding “ghost apartments” and apartments being used solely for Airbnb rentals, so at face value you can make this argument. However, the hotel lobby has a lot of power in NYC, and has donated extensively to city councilman-and-womans’ campaigns. This makes it hard to separate how much of the recent measure is to protect “the people” and how much is aimed at protecting corporate interests.
Because my relationship with my landlord is not the best (read: he’s letting the building fall apart around me), I’ve been careful to stay within the legal confines of my lease. However, most Airbnb hosts do not. Most new leases in the city involve riders that prohibit any and all Airbnb activity. There are some reasons for this that make sense. While I was careful to make sure anyone who would share my space was respectful, not everyone is so discerning. And if you live in a building where your neighbors are constantly Airbnb-ing to loud, obnoxious guests, I totally understand how that would be frustrating. Getting onto multiple leases solely for the purpose of making them into Airbnb’s and earring a profit isn’t really fair, as you aren’t taking on any of the responsibility that your landlord does, and you don’t pay for maintenance. It’s definitely unfair to make a profit off an income-restricted or rent-stabilized/controlled apartment, as you should be bound by the same limitations in price as the landlord. I was careful never to earn more than my actual rent when I was subletting.
However, renting out the other room in your apartment — for a portion of the rent rather than a massive profit — if you are between roommates should not, in my mind, be prohibited. People move out and leave the city unexpectedly all the time, and you can’t always find another roommate with short notice, especially one with whom you feel safe. It's incredibly stressful to share your space with someone who terrifies you, and it's also stressful to suddenly pay double because someone up and bailed on you. It's usually not even possible, causing you to fall behind on payments.
My moral qualms aren't the only reasons that people are unhappy with this proposed law. Multiple lawsuits have already been filed challenging the decision. Airbnb is obviously angry about it, but the second is a private citizen who rents out a portion of his two-family home using Airbnb. That is completely legal, as he is not bound by . However, after he testified about his opposition to the bill, since he sees it as an invasion of privacy (and I'm inclined to agree), he claims that city officials with Special Enforcement have been actively intimidating and harassing him. This ties back into the theory that our city council is in the hotel lobby's pocket. I can't say 100% either way, but I hate lobbies, so I'll let you guess where my bias falls.
I don't know what will end up happening, whether the challenges will result in a change or, if not, how the enacted law will affect short-term rentals in the city even more than the "Airbnb lease riders" already have. My hope is that, even if this does go through, people who rent out a portion of their space responsibly are able to continue to do so, for the good of both hosts and travelers.
Thanks for reading,
xoxo
Anna
New York Values #16 - Rent Stabilization
Today’s NY Value is inspired by my apartment and a conversation I had last night with my new roommate’s mother. Pulling inspiration from real life 24/SEVVVV (still tired)!
I discussed tenant protections a little bit in an earlier post, but this one is specifically about rent stabilized apartments versus rent controlled apartments versus free market apartments versus housing projects versus section 8. With me so far?
Rent stabilized apartments fall on the spectrum between rent control and free-market. I’ve laid out the exact differences in the “real estate” section, but essentially rent stabilized leases guarantee the possibility to renew (landlord can’t just sell the building and kick you out), and keep your rent from going up more than a limited percentage.
There are, however, a ton of misconceptions about these units. They are not necessarily much cheaper than market rate; in fact, a lot of rent stabilized units offer tenants a preferential rate that is lower than the legal rent, because legal is actually ABOVE market in those neighborhoods. They cannot be deregulated while a tenant is in place unless that tenant has made $200,000/yr for the previous two years AND the market rent is above the stabilization threshold (currently $2700). However, they are not only meant for low-income tenants; they are meant to protect the middle class. There are types of housing that are limited by income, but NOT rent stabilized units. There are also nearly a million of them in the city. ONE MILLION!
There is definitely still a lack of affordable apartments for rent in the city, largely because new construction is pretty much all luxury unless it’s Mitchell Llama (income-restricted and offered by lottery). I get it; developers want to make as much as possible and building costs are steep. But I wish there were more incentives to build middle-ground apartments. Since there is a big delay between when a project is conceived and when it’s actually available to buy or rent, hopefully in a few years we will see a change based on the over-saturation of the luxury market.
But either way, at least we still have a cool milli of these on the market today.
Your Real Estate value: breaking down the difference between rent controlled, rent stabilized, market rate, and section 8 housing. I know a lot about this stuff, but I still learned a thing or two in the process.
Housing Projects:
328 physical projects in NYC housing over 400,000 people
public housing
income restrictions
you can apply for housing in one of these “projects” now, if you qualify
Section 8 Housing Vouchers:
235,000 households in private apts in NYC
income restrictions
used to pay rent in private buildings that are NOT specifically income restricted
new applications for Section 8 housing have not been accepted since 2009, so this doesn’t help people who aren’t already in the program
Rent Controlled:
roughly 27,000 exist in the city
built before Feb 1947, continuously occupied since 1971
not income restricted
rents can go up based on the DHCR (Division of Housing and Community Renewal) rulings
guaranteed renewal at the end of your lease
if landlord sells, you get to remain a tenant on the same lease for same price
you can't get one now unless you have a family member who has one and find a way to get on the lease
Rent Stabilized:
roughly 1 million exist in the city
built before 1974, unless they are a more modern building that received tax incentives for offering rent stabilization
not based off income
rents can only go up a set amount set by DHCR
guaranteed renewal at the end of your lease
if landlord sells, you get to remain a tenant on the same lease for same price
you can rent a vacant, rent-stabilized place now!
Free-market:
everything else
no guaranteed renewal — your landlord can sell the building at the end of your lease and you gotta bounce
rent can go up with the market, so no protection if the location becomes super popular
I want to write more in the future about the other types of rental units, but for now let’s call it a day, and I’ll see you back next week with another NEW YORK VALUEEEEEEE.
xo
Anna
New York Values #10 - Heat
Heat is free for many apartments in the city (and required from October 1 to May 1). While not true for new development, older buildings generally have one boiler that heats all the apartments, so you have limited temperature control but don’t have to pay for heating oil or gas.
Read MoreNew York Values #9 - Visitors
Today’s New York Value is inspired by one of the reasons I’m so tired today: visitors!
After college, I moved home to Virginia to save up money before heading up to the Big Apple. I come from a beautiful part of the Shenandoah Valley. It’s amazing; it’s special; it’s historic. And yet, how many people visited me during that time? One. And it was just en route to DC. I’ve had more visitors than that this month. It's so routine now that I have friends just text me dates in advance so I can block them off my Airbnb calendar.
It’s fun, and exhausting, and occasionally stressful, but I love experiencing the city through an out-of-towner's eyes. Of course there are the occasional pleas to check out Time Square (you can go by yourself), but for the most part everyone has a unique list of things they want to see, places they want to go, and, most importantly, what they want to eat and drink.
When a visitor decides to move here, in real estate they’re called a relocation, or “relo” client (aren’t I so cool with the realtor lingo now?). I’m currently working with a few of these. A lot of these, actually. They can be buyers or tenants, and there are positives and negatives to working with relos rather than people who already live here.
Pros:
Have limited days to come tour, so process is more efficient
Less likely to be working with multiple brokers at once (don’t do it, guys!)
Realize they know very little about NY real estate
Enthusiastic about moving to the city
Cons:
Timing is always the hardest part of this job, and timing is even more complicated here
Require more guidance if they have never lived here before
Communication can be harder depending on where they currently live
Some places will not be available to see on the dates they can come to the city (very annoying and common)
Alright, everyone. Next week’s will be longer, better, faster, stronger, but right now I need to finish confirming tomorrow’s tour and take a NAP! Stay rested.
xo
Anna
New York Values #5 - Guns
My first New York Value lauded the civic engagement of schoolchildren, specifically their work getting an honorary street named for Elizabeth Jennings. And now, starting with the Parkland survivors, we are seeing massive nationwide civic engagement in kids/teens regarding gun control.
I had to write about guns this week, because on Saturday NYC was home to one iteration of the March for our Lives, with hundreds of thousands in attendance. I was too busy recovering from a stomach flu to go cry-march with everyone, but I was still inspired by the vast showing of support. Anyone who knows me knows where I stand on guns, but this isn’t about me. It’s about this city’s long history of successful gun control reform having a lasting, positive effect on its populous.
In 1911, a murder near Gramercy Park moved the state congress to pass New York State’s Sullivan Law, which required residents to obtain a police-issued license for any “concealable firearm.” The law made carrying a concealed weapon without such permit a felony. It was the FIRST of its kind and has been the blueprint for similar laws throughout the country.
This article has a very interesting breakdown of the whole inception of the bill and how it was really spearheaded by a gangster as well as a lawmaker! https://cityroom.blogs.nytimes.com/2011/01/23/100-years-ago-the-shot-that-spurred-new-yorks-gun-control-law/
The real power of this law, though, is the strictness with which it is enforced. Even if you pass a background check and meet the permitting criteria, law enforcement can still deny you a weapon. I’m not going to get deep into the second amendment debate, but it does not grant citizens carte blanche to own weapons; that’s a complete misreading of the law. You’re entitled to apply for the permit, but not entitled to be accepted. Why do you want a gun here, anyway? To hunt rats and pigeons? Just go to a range and shoot their guns; it’s still fun!
There was a drive-by shooting two doors down from me when I first moved to my apartment, and it was terrifying. I am incredibly grateful that it is not more common largely because of the barriers to gun ownership that exist here. Thanks, New York, for being ahead of the curve and keeping me safe.
(Note: After the Sandy Hook shooting, NY passed the SAFE Act, banning outright all assault weapon sales in the entire STATE.)
The real estate value today is perhaps self-justifying, but it’s to clarify something that has come up a couple times recently.
You really cannot work with two unrelated RE agents, because one of them is going to end up getting forced out. It happens a lot: your mom knows someone and your friend knows someone or you know someone and your roommate knows someone so you reach out to both. And they both send you listings and put in time, show you around, etc. And you kind of just go along with it until you end up deciding on a place, telling the other agent that you’re all good now and they can stop the search on their end.
It’s like shitty dating. You’re seeing someone and it seems to be going well, you’re getting more invested, and then all of a sudden they tell you they’re getting back together with their ex, or they met someone else they really like. And you’re left FOREVER ALONE.
This is also why many agents aren’t particularly excited about tenant-side rentals. At least in a sales transaction one broker is guaranteed to be part of the final deal, and it’s explicitly stated that you should only work with one agent at a time. But in the free-wheeling rental world there are all kinds of communal living or leasing agency options, so not only are some clients working with an array of agents, they’re also exploring other options on their own. It doesn’t feel great to spend a bunch of energy on something only to be told you’re no longer needed! At least if a boss fires you he has to pay you two weeks severance on top of what you’ve gotten for “time served.” In this industry, that’s not a thing.
This isn’t a lecture or me complaining about my position. Instead, it’s a call to both sides to make sure expectations are laid out early on. As non-agents, if you are up front with anyone you consider working with about all the potential inevitabilities, that person can weigh their options and know what they’re getting into. They should do it on their end as well, but by being smart, savvy consumers, you can take the first step and also impress any potential agent with your awareness. Plus you’ll get the best from anyone you work with because you’ll be an absolute DREAM client!
As always, direct questions to anna.klenkar@compass.com, and I’ll be back next week!
New York Values #4 - Kushner
OK, let’s talk Kushner for a moment. Not white-house-failure Kushner, but NY real-estate-jerk Kushner. It broke last week that his company lied about whether certain buildings they owned had rent-regulated tenants as residents before beginning construction. As the chair of New York’s Committee on Public Housing put it, “The Kushner’s appear to be engaging in what I can the weaponization of construction.” It’s a way to force protected tenants out against their will, by making a building so unlivable they decide to just bail. It’s also illegal.
As the leaseholder of my own rent stabilized apartment that has often gone un-repaired to the point we ended up in court, I feel for these tenants! My situation is more apathetic negligence than outright deceit, so screw you, Kushner, you fart. How dare you. You’re making my landlord look good by comparison!
This all doesn’t really seem like a NY Value, but do you know what is? The fact that a watchdog agency looked into this and tried to hold the Kushners and similar landlords responsible, and how many similar agencies exist to protect tenants, especially the low-income or otherwise at risk.
Kushner’s misdeeds were discovered by a housing watchdog group, the Housing Rights Initiative. There is a NYC Council-founded tenants’ rights hotline you can call for help on Mondays, Wednesdays, and Fridays. There are law students who provide pro-bono legal help to those trying to represent themselves in housing court. There are sites where you can look up information about violations tied to a landlord or specific property. There are multiple NYC.gov websites specifically devoted to tenant info, and SO MANY OTHER third party organizations whose sole purpose is to help protect tenants. I wanted to include an actual list, but I’m putting my first deal together today (!!!!), so I ran out of time. I will try to compile for next week.
It’s hard to live here, sometimes, especially on a tight budget. As discussed last week, moving is EXPENSIVE! So the fact that the city does provide resources and protection for its low income tenants definitely qualifies as a NY Value.
As promised last week, I’m going to quickly explain the different types of agents, for those who don’t know.
Agent: This term refers to anyone licensed to buy or sell real estate, either a salesperson or broker.
Salesperson: As a new agent, you begin as a salesperson. In NY, to get your actual state license, you need to be sponsored by a broker. You cannot be licensed as a salesperson unassociated with any brokerage, so finding said broker is just as important as the classes and exams.
Broker: After two years as a licensed (i.e. sponsored by a broker and registered) salesperson, you can complete an additional 45 hour class to get your broker’s license. Being a broker means that you are now able to start your own company (brokerage) and hire other brokers and salespeople.
Brokerage: The company, like Compass, that is run by at least one broker, and provides insurance, resources, etc. to their agents in exchange for a cut of their commission. Traditionally, this cut begins around 40-50% of commission for newer or lower producing agents, and the percentage decreases as you earn more.
There are more specific demarkations within these groups, but I’ll leave it here for now. And if any of you have specific real estate questions you’d like me to answer, feel free to comment, message, or email me at anna.klenkar@compass.com.
<3
New York Values #3 - Snow
Last week’s NY Value was long and rambling, so today’s will be short and sweet (and full of facts). Since we are currently experiencing our third snowstorm in the month of March, it focuses on how good the city is at handling winter.
Stats from https://gearpatrol.com/2015/11/19/how-nyc-prepares-for-blizzards/ and https://www.nytimes.com/2017/03/14/nyregion/blizzard-winter-storm-stella.html
New York City is home to 8.538 million people driving on 6,500 linear miles of roads. The city has 3,000 snow plowing routes, with more than 1,500 plows and over 500 salt spreaders. There are 29 permanent and 14 seasonal sites storing 300,500 tons of salt rock to prepare for each winter.
From Mid-November to early April, city sanitation workers—who are also responsible for the snow removal process—switch to 12 hour round-the-clock shifts, meaning there will always be a team ready if a snowstorm kicks up, day or night. They receive winter preparedness training anually before this schedule change.
Once 2” of snow collect on a roadway they start plowing via a three tier system of attack. First are the dedicated first responder routes that connect hospitals, NYPD, and FDNY to major public streets, densely populated areas, JFK, and LaGuardia. Tier two is all side streets, followed by tier three's dead-end roads and limited-access streets. At 6” of accumulation, they also break out the haulers and industrial melters to remove plowed snow.
When a BLIZZARD hits, they open up a 130 seat “war room” in BK Heights where reps from energy, infrastructure, sanitation, etc. meet in one room to coordinate the attack. When interviewed about their storm approach, Edward Grayson, COO of the Bureau for Cleaning and Collection, explained that it's better to overcommit than leave the city’s population vulnerable. And in today’s weird, hyper-everyone-for-themselves America, that is a beautiful thing. Thanks, NY, for committing to me so hard.
And now for the extremely long-winded part: your real estate value.
For today’s real estate value, I’m addressing some questions I’ve encountered in tenant-side rentals. These are things that I didn’t understand before starting classes, so it makes sense that there would be confusion. To clear it up, I’m answering the questions I’ve gotten below. For these purposes, “broker” means any kind of real estate agent (next week I’ll explain the different kinds):
FIRST AND FOREMOST: If I use a broker, will I pay extra?
NO!!!! If you are viewing an apartment by responding to an ad, attending an open house, or contacting a listing you saw online, YOU WILL BE PAYING THE FEE REGARDLESS OF WHETHER YOU BRING YOUR OWN BROKER TO THE TABLE. Let me say that again: YOU WILL BE PAYING THE FEE WHETHER YOU REACH OUT YOURSELF OR GO THROUGH A BROKER. In fact, you will likely end up paying MORE if you reach out solo, because you are not being represented, and are now dealing with someone who has the landlord’s interests in mind rather than yours. It’s like turning down a court appointed lawyer and representing yourself; you are missing out on an expert’s help in the hopes of saving money when it’s actually free. And, unlike a court appointee, you get to CHOOSE your broker (i.e. me).
What about no fee apartments, though?
No fee apartments are divided into different categories, some with the landlord paying a fee, some with the fee baked into the rent. Even if you're dead set on limiting your search to no fee places, you should still talk to a broker you trust first (emphasis on trust). Depending on the place, there are a few things you need to look out for, which I may discuss further in a later post.
But if I can find all these places on my own on Street Easy, why would I use a broker?
Again, it’s like representing yourself at trial: you don’t save any money and you are likely to make a mistake or miss out on an opportunity. You don’t pay a broker to FIND you apartments; there are millions of apartments and you have access to most of them online. You pay a broker to GET you the apartment. We have relationships with others in the industry; we know how to make your application most attractive and nip any issues in the bud. Also, many NY rental listings are in co-op and condo buildings, meaning your agent will need to put together a massive stack of paperwork and deal with the building’s board. This is complicated, precise, and should be done by a professional you trust, not whomever happens to be representing the apartment’s owner.
But I don’t want to pay a fee. I shouldn’t have to pay to get a new apartment!
Why not? I see the train of thought: you may have found the apt yourself; you walked in there and decided you wanted it; you got all your documents together. But, as discussed above, that’s only the tip of the iceberg, and a broker has to do the rest. There may be a low barrier of entry to be a real estate agent, but it's still a barrier! If you really want to avoid paying, you’ll need to take (and pay for) the 75 hour course plus two exams, find a broker willing to sponsor your license, and pay the licensing fee as well as REBNY dues. You’ll have spent over a hundred hours and may save about $500. I’m not a lawyer, doctor, or CPA, but I still had to go to "school" for this, and I still provide a valuable service.
My friend is the broker; they need to give me a discount!
Again, I see the logic here. Why wouldn’t you get a friends and family discount? It’s not that simple, though. The fee you pay does not go directly to your friend. Depending on the apartment, I may only be getting 25% of what you shell out. So if you insist on a price cut, I either have to get everyone else on board, or essentially work for free. Can I come to your place of business and ask you for free shit? If so, please let me know where you work and I’ll be there! Joking aside, I now work 100% on commission. That’s exciting but terrifying. Think about your friends who are creative freelancers; would you ask them to film a video or build a website for you for free? Well, maybe you would, but that's an issue, and Fiverr has an entire ad campaign surrounding that! Respect your friends’ jobs and skills by paying them for their work.
But it’s so expensive!
Yeah, it is. Moving in this city IS expensive! So are gym memberships. But I can’t guilt Equinox into waiving its fees for me. Moving in NY, at least if you want to be on a lease, is an ordeal. And you should be ready for that. Even without the broker fees, you still need first, last, deposit, application fee, credit check fee, and moving costs, potentially plus an additional move-in fee for condos or co-ops. If all of this is too much, you’re probably better off finding a room in a shared apt. There is nothing wrong with that! It's how I moved here! It just won’t get you on a lease.
I've been asked more questions in this vein, but instead of writing another 1,000 words I’ll instead leave you with Compass’s NY rental guide (linked here) and circle back next week. Until then, thanks for reading, tip your waitress, and stay warm out there.
<3