NY Times Horrified That Rent Control Leases Might Be Treated Like the Assets They So Obviously Are

Welcome to De Blasio's New York! |||Though The New York Times is playing this like a one-percenters-get-to-screw-the-poor-even-more story, the paper's article today on a court case that "poses a major risk to...millions of other New Yorkers who live in rent-stabilized apartments" is an unintentional exercise of showing just what kind of warped outcomes are produced by the city's severe rent stabilization laws. The underlying case is as follows:

* 79-year-old widow Mary Veronica Santiago has lived for 50 years in a two-bedroom East Village apartment near Tompkins Square Park. A neighborhood that was truly frightening a quarter-century ago, and desirable now. Her rent-stabilized rent is $703 a month.

* Two years ago, Santiago's husband died, and she filed for bankruptcy. The Times is unconvincing on the timeline here—"after her husband died, Mary Veronica Santiago fell behind on her bills, and the creditors began to call," yet somehow she fell behind fast enough that she filed for bankruptcy that same year? Anyway, Santiago had a reported $23,000 in debt, mostly in credit cards, so she filed for bankruptcy hoping that her lack of assets would help make the sum disappear.

* Though her landlord was not one of her creditors, he was notified of the case, then offered to pay all of Santiago's debts and lawyer fees, keep her in the apartment for the rest of her life "at a similar rent under a non-rent-stabilized lease" (that's a NYT paraphrase of the bankruptcy trustee), but with the caveat that she not be allowed to pass on the lease to her 50-year-old son. That's right—in New York City, you can put your rent-stabilized apartment in your will, and hand it off to the next generation of $703-a-month payers.

* Santiago refused this pretty damned generous offer.

In one of those unintended consequences ironies that rent control has become famous for, Santiago's court case, currently at the U.S. Court of Appeals for the Second Circuit, could end up allowing bankruptcy creditors to treat tenants' rent-stabilized leases like the assets they most obviously are. Or, in Timesspeak:

At a time when housing affordability and income inequality have been driving the debate in the mayoral race, the bankruptcy case could add another element of uncertainty to New York City's efforts to preserve housing for people with low incomes.

Reason.tv on NYC rent control:

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  • John||

    Gentry liberalism at its finest. The right people and their little snow flakes get to live in these neighborhoods forever. Otherwise some neuvou riche wrong kind of person might move in.

  • CE||

    You don't want lots of rich people moving into your neighborhood. They will destroy the "flavor".

  • ||

    She refused that sweet deal?

  • John||

    No kidding. Tell junior to get off his ass and get his own apartment or live in boroughs.

  • John Thacker||

    50 year old Junior, a personal trainer, actually lives with her right now. Apparently he couldn't help her with the bills either, despite them together living in a sweet $709 / month apartment.

  • ||

    New York City's efforts to preserve housing for people with low incomes

    Yes. Because that's what Rent Control did. The evidence is undeniable.

    What evidence, you say? We don't need no stinkin' evidence. We're the NYT! FYTW.

  • Mainer2||

    Another example of leftists being not just wrong, but 180 degrees wrong.

  • Rhywun||

    Obviously we need more "efforts".

  • The Late P Brooks||

    the bankruptcy case could add another element of uncertainty to New York City's efforts to preserve housing for people with low incomes.

    The solution is obvious. Just transfer ownership of some more land (via Eminent Domain) to Bruce Ratner. He'll build some very nice housing units and rent them at city-subsidized rates to the peanut vendors from his basketball stadium.

    Everybody wins!

  • Andrew S.||

    Don't give them any ideas.

  • Raston Bot||

    How is rent control not a taking?

  • WTF||

    FYTW

  • Raston Bot||

    The widow’s lawyers argue that a rent-stabilized lease is a public assistance benefit, just like Social Security or disability payments,

    I had no idea you could inherit SS and disability payments from deceased relatives.

  • Stormy Dragon||

    What they should really do (well, what they should really do is get rid of rent control, but since that's not gonna happen...) is make the rent stabilization non-transferable. If we treat access to below market housing prices as an asset, the same line of arguement leads to the IRS being able to homeowners imputed income for not paying rent.

  • John||

    What they really should do is end rent stabilization. But yes, if it passes to your heirs, it is a fucking asset not a welfare program.

  • Brendan||

    I would love that so much. Time for them to start paying their fair share and all...

  • CE||

    Let's see now, a below-market perpetual lease is not an asset, but can be left to your heirs, unlike your Social Security benefits due if you pass on earlier than expected....

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