New York Rents Are On The Rise; Wages, Not So Much

New York City rents are rising twice as fast as wages, according to a recent story by DNAinfo.com, and New Yorkers are feeling it in their pockets disproportionately.

An apartment going for $2,000 a month for rent in 2010 would now get $2,657 a month, according to a study conducted by the website StreetEasy.com, and wages for the same amount of time just aren’t keeping up.  While median rents increased 3.9 percent a year since 2010, wages increased by 1.8 percent over the same period.

To make matters worse, those working in the city’s lowest wage jobs were hit hardest.  Those jobs, such as home health aides and dental assistants or other healthcare support services, actually saw their incomes fall 1.1 percent over the past seven years.  At the same time, rents in the lowest bracket of the market increased the most since 2010 at 4.9 percent a year, with a 3 percent increase this year alone.

New York City Mayor, Bill de Blasio, has often discussed the rent versus wage gap when addressing issues such as the city’s record homelessness and the various programs trying to provide financial or legal assistance to families.  The numbers for families with children in shelters shot up nearly 49 percent between 2010 and 2017, according to the DNAinfo.com, from an average of roughly 8,600 families a month to more than 12,800 families a month.

Ironically, the unemployment rate, has declined during that period.  As of May, the city’s unemployment rate was 4.4 percent, down from 10.1 percent at the end of 2009, the StreetEasy study pointed out.

The group that’s been least affected by the rent increase are the city’s top 20 percent of earners.  Not only did the wages of those earners grow the most over the same time period, their high priced rentals saw prices increase the least, at about 3 percent a year.

Whatever percentile you fall in, if you’re looking for a place to live that fits your budget, we can help.  Contact a representative at Waterman Realty and Tax Pro, today.

New York City to Offer Legal Aid to Low-Income Tenants

Earlier this month, New York City Mayor Bill de Blasio signed legislation guaranteeing most low-income tenants access to lawyers if they face eviction, making New York the first city in the country to offer such protections.

The free legal services will be offered to tenants who earn up to double the federal poverty line — $49,200 annually for a family of four — or roughly 80 percent of tenants facing eviction cases.  In 2007, about half of the families in New York City’s homeless shelters became homeless within five years of an eviction, according to intake data.

New York’s program will be phased in over a five year period, starting with certain zip codes spread across all the boroughs, and then gradually expanded.  Housing advocates are calling on the government to prioritize legal services for seniors and people with disabilities in addition to the location-based roll out.

Marika Dias, director of the Tenant Rights Coalition at Legal Services NYC, says the new law will be an important tool in the fight against displacement and gentrification in a city where affordable housing is disappearing while rent continues to rise. “In the current real estate environment in New York City, tenants are really vulnerable,” she tells the website MotherJones.com. “And there are a lot of incentives for landlords to displace, in particular, rent-regulated tenants in low income communities that are facing gentrification.”

Despite recent efforts to expand services in New York City, more than 70 percent of low-income residents still go without representation in housing court, according to a city government report. Until now, it’s been on tenants facing eviction to try to find legal services on their own through systems that Dias describes as challenging to navigate. “Under the new initiative, with a right to counsel there will be many, many more access points for tenants,” she says, “and the goal is for tenants to be able to connect with attorneys at the earliest possible stage of their case.”

Ideally, the best way to deal with a landlord/tenant dispute is to avoid having them in the first place.  If you’re looking for an apartment with a decent landlord that won’t think the courts are the first option in a dispute, contact a representative at Waterman Realty and Tax Pro, today.

So You're Moving to the Big City...

According to DNAinfo.com, with a flood of students moving into new apartments right before the school year, and a new set of graduates starting new jobs in September, the end of August is one of the busiest times of year for renters.

So DNAinfo put together a short guide for all the newbies out there…

1.  The general rule of thumb — and what many landlords require — is for renters to pay no more than 30 percent of their total income toward rent.  So be prepared to prove your earnings, have enough cash for the first month’s rent, security and any broker fees.

2.  You’re probably going to need a roommate.  The median rental price — representing the midpoint of the market — for a studio in New York City was $2600 a month, according to a report from the real estate agency Douglas Elliman.  If you follow the first rule, that would mean you would need to earn $104,000 a year for the median-priced studio.  That is far more than what most New Yorkers earn, entry-level or not, as the median household income here is $50,711, according to Census data.

3.  If you want to live in some of the most popular neighborhoods, roommate or not, it’s going to cost you.  The priciest rooms were in the East Village, and Alphabet City, both neighborhoods in Manhattan with rooms costing up to $1,730 a month.  Other expensive areas included Stuyvesant Town ($1,667 a room), Midtown and Downtown Brooklyn ($1,650 a room), and Lower Manhattan ($1,600 a room).

4.  Not all neighborhoods are equal, so if you’re willing to compromise and get a roommate, you should also consider moving to a neighborhood that doesn’t have four-digit rental prices.  Roommate hunters could score the cheapest digs in Jamaica Queens, where monthly rents started at $775.  Next on the list for inexpensive options were: Bensonhurst ($780 a room), East Bronx and Jackson Heights ($800 a room), and Brownsville ($813 a room).

5. Brooklyn tends to be the most popular for rental listings and for roommate hunters.  An analysis of the roommate-search app SpareRoom found that 43 percent of all listings on its site were in Brooklyn, followed by 41 percent in Manhattan. Twelve percent were in Queens, 4 percent in The Bronx and less than 1 percent were in Staten Island.

Brooklyn just so happens to be Waterman Realty and Tax Pro’s area of expertise.  So, if you’re looking for an apartment in Brooklyn, with a manageable rent and decent landlord, contact us today.

The Difference Between Rent-Control & Rent-Stabilized Part 1...

Rent-controlled and rent-stabilized apartments are highly coveted in New York City.  The website Curbed New York breaks down the differences between the two and what you need to know to snag one.

Rent-controlled apartments are the hidden treasure of the New York City real estate world. Hidden because they are extremely difficult to find.  In the 1950s, 2 million of the city’s apartments were rent-controlled; now, that number is around 27,000 (according to a 2014 HPD survey).  A treasure because if you’re lucky enough to live in one, now only may you be set for life, your family members may be as well.

Rent control happens when a tenant has been living continuously in their apartment since July 1, 1971 in a building constructed before 1947.  Do you have a relative that occupies a rent controlled apartment, and are you also living there? When a tenant in a rent-stabilized or rent-controlled apartment dies or moves, certain family members (including “non-traditional” family members, like unmarried couples) who have been living in the apartment have the right, under certain conditions, to take over the tenancy.  Roommates not in a family relationship with the prime tenant do not have succession rights, nor do sub-letters or family members not living in the unit.

Now, nothing in New York is completely free, so even rent controlled apartments are subject to loop holes that allow landlords to increase the rent overtime.  Rent-controlled units may be subject to rent increases of 7.5 percent each year based on the landlords strict adherence to the rules of the “maximum base rent” system (MBR), fuel pass-along charges or major capital improvement pass-alongs.  However tenants are allowed to appeal the rent increases.  Landlords who did not file the MBR paperwork in time or own buildings with any rent impairing violations outstanding can have their MBR paperwork denied.

In a follow up post we’ll cover the more common and still coveted rent-stabilized apartment.  In the meantime, if you’d like to learn more and possibly score yourself a regulated apartment in the most expensive real estate market in the world, contact us today.

Tuesday, September 12 Is NYC Mayoral Primary Day

The New York City mayoral election is on November 7th, 2017, and although that’s still several weeks away, the primaries are within days.

Curbed NY has provided you with a quick and dirty rundown for NYC’s 2017 mayoral primary election.  Click on the candidates names below to be taken to their official website.

In the September 12 primaries, registered Democrats will be voting for their candidate from a relatively wide pool including incumbent mayor Bill de Blasio, Sal Albanese, Richard Bashner, Robert Gangi, and Michael Tolkin.

Republican candidate Nicole Malliotakis is currently running uncontested within the party. That means there is technically no Republican primary election.

In addition to the Democrat and Republican parties, New York state recognizes the Conservative, Working Families, Independence, Green, Women’s Equality, and Reform parties. Candidates are not restricted to only running for one party; Bill de Blasio is also the Working Families party candidate, Nicole Malliotakis is also the Conservative party candidate, and Sal Albanese is also the Reform party candidate.

Additional candidates running in the 2017 NYC mayoral election include Green party candidate Akeem Browder.

Voters wishing to participate in the primary must be a citizen of the United States; be a New York City resident for at least 30 days; be 18 before the next election; not be serving a jail sentence or on parole for a felony conviction; not be adjudged mentally incompetent by a court; and not claim the right to vote elsewhere (outside of New York City.)

Find additional information about the mayoral election here. For a full calendar of the New York Board of Election deadlines, head this way.  For help with all of your tax or real estate matters, contact us today.

Myth Buster - DACA Recipients Actually Do Pay Taxes

Earlier this week, Attorney General Jeff Sessions announced that the Trump administration will “wind down,” and in six months, end Deferred Action for Childhood Arrivals (DACA).

DACA, a Department of Homeland Security initiative put in place in 2012 by then President Barack Obama, temporarily deferred the deportation of approximately 800,000 young immigrants who were brought to the United States as children, under the age of 16.

The young immigrants who met the requirements and passed the necessary background checks for DACA received a two-year work permit, as long as they kept applying to renew, kept a clean criminal record, and were either enrolled in school or graduated, or serving in the military or honorably discharged, and continuously resided here since 2007.

DACA recipients can’t vote and it’s not a path to citizenship, just a work visa and deportation reprieve.  Yet they speak English, grew up steeped in American culture and have roots here as deep as many native-born Americans.  And despite the myths that circulate in some circles, a 2016 study by the Institute on Taxation and Economic Policy found that undocumented immigrants pay nearly $12 billion a year in state and local taxes.

Some other key findings of that study are:

1. Undocumented immigrants collectively pay an estimated $11.64 billion a year.  Contributions range from almost $2.2 million in Montana with an estimated undocumented population of 4,000 to more than $3.1 billion in California, home to more than 3 million undocumented immigrants.

2. Undocumented immigrants nationwide pay on average an estimated 8 percent of their incomes in state and local taxes (this is their effective state and local tax rate). To put this in perspective, the top 1 percent of taxpayers pay an average nationwide effective tax rate of just 5.4 percent.

3. Granting legal status to all undocumented immigrants in the United States as part of a comprehensive immigration reform and allowing them to work legally would increase their state and local tax contributions by an estimated $2.1 billion a year. Their nationwide effective state and local tax rate would increase to 8.6 percent.

Plainly put, according to this and other recent studies, DACA recipients pay their own way.  They can’t collect welfare benefits but they have to pay taxes. All in all, according to the NY Post, recipients will pay about $60 billion more in federal taxes than they’ll consume in benefits over the next decade.

Although what will happen with DACA remains uncertain, the team at Waterman Realty and Tax Pro is here to answer all of your tax related questions.  Contact us today.

The Difference Between Rent-Control & Rent-Stabilized... Bonus!

In the last couple of posts we focused on the difference between apartments that are rent-controlled versus rent-stabilized.  In this final post of the series, with a little help from Curbed New York, we cover a third type of reduced rent called preferential rent.

Preferential rent, is known as the rent charged to a rent-stabilized tenant that is lower than the legal rent.  As we mentioned in our previous post in the series, “The Difference Between Rent-Controlled and Rent-Stabilized Part 2…“, rent stabilization sets a maximum legal rent for each apartment.  It’s a number based on the unique history of each apartment and regulated by the city; 50% of apartments in NYC are currently rent-stabilized.

However, in certain circumstances a landlord may offer a lease to a tenant that is lower than the already reduced stabilized rent.  Landlords might do this if they’re having trouble filling apartments, or if they are trying to remain competitive in the market.  According to ProPublica, the number of leases offering preferential rents is increasing: more than 250,000 of the city’s approximately 610,000 rent-stabilized units in 2015 were offered at a preferential rent, rather than following the traditional rent-stabilization rules.

So if tenants are getting a discount and preferential rents are quite common, what’s the big deal?  Well the thing to keep in mind is that having a preferential rent can also mean that when your lease is up for renewal, the landlord can hike your rent way up (as opposed to the usual small percentage dictated by the Rent Guidelines Board for rent-stabilized apartments).  This can come as a shock for many tenants who can see thier rent jump hundreds of dollars or more.

This could mean that even during years when the Rent Guidelines Board agrees to have rents frozen for one-year leases, landlords may choose to make the money up somewhere else, such as raising preferential rents.  After all, even during periods of rent freezes, operating costs for owners often continue to rise due to property taxes and water rates.

The advice for anyone being offered preferential rent is pretty standard, read your lease carefully when you move in. In order to be able to revoke your preferential rent, the landlord needs to have clearly stated both the legal rent and the preferential rent in the lease and they need to have registered the preferential rent.  At Waterman Realty and Tax Pro, we thoroughly go over any lease you should sign so tenants are aware of the fine print.  Contact us today.

The Difference Between Rent-Control & Rent-Stabilized Part 2...

In a previous post we covered the details of rent-controlled apartments.  In this follow-up, with a little help from Curbed New York, we cover the second most highly coveted apartments in New York City — rent-stabilized apartments.

The good news about rent-stabilized apartments is that they are way more common than rent-controlled apartments.  While less than 1% of New York City apartments are rent-controlled, roughly 50% of them are rent-stabilized.  Rent stabilization generally applies to apartments in buildings of six or more units constructed before 1974.

Once you’ve secured a stabilized apartment, your landlord can only increase your rent by a percentage determined by the Rent Guidelines Board, which holds public hearings that culminates in the release of the percentage increase for the following year.  (For a look into this year’s proceedings, please see our post “After a Two Year Freeze, NYC Renters to Face Increases.”)  While some newer buildings receive tax breaks from the city as a part of affordable housing programs, and therefore specify or verify a prospective tenant’s income level, apartment size, intended occupants, and other needs-based factors, older buildings do not.

The biggest impact on the rent is how often the apartment has turned over in the past, as well as any renovations the landlord has undertaken.  Renovations or capital improvements is one of the ways landlords can hike up the rent for both rent-stabilized and rent-controlled apartments.  Every time a tenant moves out, the landlord can hike the rent by roughly 20 percent, as well as raise the rent by a fraction of the cost of any upgrades. A landlord can also raise the rent if they’ve done a major building repair.

Aside from recouping the costs laid out to maintain or improve the property, pay property taxes and cover other miscellaneous expenditures, landlords of rent-stabilized apartments keep two figures in mind as they raise rents.  One is $2,700 — that’s the amount of rent that a legal regulated unit has to surpass before a landlord can charge market rate (something known as High-Rent Vacancy Deregulation); the second is $200,000 — that’s the amount a tenant’s income would have had to exceed in each of the the previous two calendar years.  If any of these should occur, a landlord can deregulate an apartment and bring it to market rate.

So those are the rent-regulation guidelines that every New Yorker should be aware of.  As always, the team at Waterman Realty and Tax Pro is here to help you make sense of it all.  Contact us today.

How Your Housing Costs Can Tell If You're Living Beyond Your Means

Burdensome housing costs are one of three signs that you may be living beyond your means.

According to CNN Money, 47% of Americans would struggle to come up with $400 to cover an unplanned expense and nearly half of today’s workers are living paycheck-to-paycheck.  In a world of readily available credit, a significant part of working America’s inability to meet the demands of a financial emergency is due to an overextension of their obligations, or said another way, too many Americans are living beyond their means.  If month after month you find yourself with nothing in the bank to show for all of those hours you put into your job, you may be one of them.  Here are three signs that you may be living beyond your means and how you can fix them.

1.  Your housing costs eat up more than 30% of your paycheck

Housing is many Americans’ largest monthly expense.  However, no matter how much you earn, your housing costs, which include your rent or mortgage payment, property taxes, and homeowners’ or renter’s insurance, should never exceed 30% of your take-home pay. If your current housing expenses surpass this limit, it’s a clear indication that you’re in way over your head.

Between 2011 and 2014, 52% of Americans had to make at least one major sacrifice to cover their housing costs, according to CNN Money.  If you can relate, you’re better off downsizing to home or apartment that you can comfortably afford — meaning, one where the total anticipated monthly costs equal less than 30% of what you bring home in your paychecks.

2.  Your credit score is low

As we’ve discussed before on this blog, background and credit checks are the new normal when applying for a home or apartment.  So if your credit score is low, not only may it hurt your chances of getting that place you’ve had your eye on, it may also be an indicator of a more serious problem.

There are several factors that go into your credit score, some of which carry more weight than others. The two biggest, however, are your payment history, which speaks to your ability to pay your bills on time, and your credit utilization, which is the extent to which you’re using your available credit.

If you’re living beyond your means and spending too much, you’ll be less likely to pay your bills in a timely fashion. Similarly, if you’re using a large percentage of your total credit line, it’s probably because you’re racking up too many charges and not paying them off quickly enough.  Both actions can wreak havoc on your credit score.

3. You’re not saving any money

Working Americans are generally advised to set aside a minimum of 10% of each paycheck for emergency savings or retirement. If your expenses are such that there’s absolutely no money left over each month to stick in the bank, it’s a sure sign that you’ve adopted too costly a lifestyle.

To start, create a budget that outlines your current spending, and compare it to what you’re getting from your monthly paychecks.  Next, work on cutting expenses so that you’re not only spending less than what you bring home, but have at least some money left over to add to your savings.  Some prefer to slash one large payment (like housing costs) and other prefer to cut a lot of smaller payments, like daily take-out lunches, cable bills and gas.

In a follow up post we’ll discuss more ways to be a better saver.  However, if your current housing costs are more than your budget can afford, that’s something that the team at Waterman Realty and Tax Pro can help you with today.  Send us an email or give us a call.

The Corner Bodega — A New York Staple — Is Under Attack

A tech-startup, founded by two ex-Google employees, wants to replace your local bodegas with their autonomous vending machines, also called Bodegas.

Paul McDonald, and his cofounder, Ashwath Rajan, have already received funding and have installed their five-foot-wide pantry boxes, filled with non-perishable items you might pick up at a convenience store, in several locations on the West Coast.  An app allows customer to to unlock the box and cameras powered with “computer vision”register what’s been removed, automatically charging the customer’s credit card. The entire process happens without a person actually manning the “store.”

According to an interview the founders gave to Fast Company, the idea is to “preempt what people might need, then use machine learning to constantly reassess the 100 most-needed items in that community. In a sorority house, for instance, young women might regularly purchase pretzels, makeup remover, and tampons. Meanwhile, in an apartment block, residents might regularly buy toilet paper, pasta, and sugar. When an item is bought, Bodega gets a note to replace it, and regularly sends people out to restock the boxes.”

Currently being tested in gyms, dorms, lobbies and office spaces on the West Coast, the founders may have to brace themselves for what looks to be a tough sell on the East Coast.  For starters, the name, Bodega, and the logo, a cat, are rubbing local bodega owners the wrong way.

The Association for Neighborhood and Housing Development (ANHD), a New York based affordable housing advocacy group spoke out about “the awful irony of naming the company ‘Bodega’ after the very brick and mortar institutions they aim to displace, to say nothing about the cat their logo is based on that will similarly be displaced, is offensive, utterly misguided, and frankly disrespectful to New Yorkers.”  They also take issue that when asked about the potential insensitivity of the name and logo, McDonald responded, “I’m not particularly concerned about it.  We did surveys in the Latin American community to understand if they felt the name was a misappropriation of that term or had negative connotations, and 97% said ‘no’. It’s a simple name and I think it works.”

McDonald may be bringing a knife to a gunfight.  “Real bodegas are all about human relationships within a community,” said New York State Coalition of Hispanic Chamber of Commerce Chairman Frank Garcia.  “Despite their extensive demographic and market research, the creators missed a crucial fact about New York City: you can mess with a lot here, but you can’t mess with our bodegas.”

Not to be undone, the ANHD took their passion a bit further by stating, “[The] Bodega [pantry box] allows the new city dweller… to live in the City without actually participating in its civic and cultural life aside from contributing to its disappearance. Never mind the lives of the immigrant and refugee service workers behind the counter who work 80 hour weeks, who brew the City’s morning cup of coffee and wrap up our life-sustaining egg and cheese on a roll. Or the lives of the young parents who rely on the bodega because the owners give them food on credit when they can’t afford it, or the senior citizens who use the space as a community center and act as a de facto neighborhood watch… New Yorkers know the difference between a vending machine and the real thing… Trying to replace the bodega with a glorified vending machine is like trying to replace the Empire State building with a low-rise strip mall.”

Want to live on a block with a real bodega on your corner?  Contact us today.

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