ridiculous rent increases

[curiouscat]

Hey all-
just wanted to get your take, my husband and I currently have a one bedroom apt. in the Atlantic and we just got our renewal slip in the mail yesterday.

Our rent is being raised 13%, 150 extra dollars a month to 200 dollars....it's insane..so now we are paying about 1800, when we moved in two years ago we paid about 1520....

just wondered if anyone else has experienced this and why its occuring?... are they trying to push out the current tenants.. because with these type of ridiculous rents they will...


has anyone complained or even know if this is illegal.. I know new york has laws to prevent this type of greedy behavior, do we?

[renuka]

Welcome to the club - your lucky at just 13% - most of us got renewals of 15% for 1 year and 20% for 2 years. Yes, we've complained but their take is they will find new tenants at the increased prices... You'll find several threads on this BB wrt the same issue but there you have it. Let's wait and watch ;)


Hey all-
just wanted to get your take, my husband and I currently have a one bedroom apt. in the Atlantic and we just got our renewal slip in the mail yesterday.

Our rent is being raised 13%, 150 extra dollars a month to 200 dollars....it's insane..so now we are paying about 1800, when we moved in two years ago we paid about 1520....

just wondered if anyone else has experienced this and why its occuring?... are they trying to push out the current tenants.. because with these type of ridiculous rents they will...


has anyone complained or even know if this is illegal.. I know new york has laws to prevent this type of greedy behavior, do we?

[zipbow]

Riverside studio... only got 5%... guess i should be content...

[happygolucky]

1 bedroom rent renewal 5% up in our case making totalk of $1900. It is a renters market now I guess.
As far as I know there is no law protecting tenants

[Lenin]

As long as a steady supply of Asians keeps immigrating into the back-office jobs of Wall Street, there will be continued upward pressure on rents...and for the time being there seems to be no relief from this demographic pressure.

Wall Street sees it as a good way to keep wages down and Lefrak sees it as a good way to keep rents UP. That's just the way it is.

If immigration restrictions were tightened, rent increases would slow.

One's only relief is to rent farther and farther from the City...and bear the commute. Some are doing it even from Pennsylvania, though I'd happily take a bullet through the mouth rather than do that trip 10 times a week.

Lefrak is rapidly raising rents for one reason and one reason only: BECAUSE HE CAN!

[itsted]

There's nothing like a little xenophobia with your Wheaties in the morning.

[PTMG]

The large increases typically happen to those whose rents have lagged behind the market rate for a while. Those who already pay near the market rate got offers of 5% raise from my experience, which is much more reasonable.

[ajay_chatopadhya]

As long as a steady supply of Asians keeps immigrating into the back-office jobs of Wall Street, there will be continued upward pressure on rents...and for the time being there seems to be no relief from this demographic pressure.

Wall Street sees it as a good way to keep wages down and Lefrak sees it as a good way to keep rents UP. That's just the way it is.

If immigration restrictions were tightened, rent increases would slow.

One's only relief is to rent farther and farther from the City...and bear the commute. Some are doing it even from Pennsylvania, though I'd happily take a bullet through the mouth rather than do that trip 10 times a week.

Lefrak is rapidly raising rents for one reason and one reason only: BECAUSE HE CAN!


I agree with you. Shouldn't rent increases be constrained by the inflation rates of a currency? After all, income of most people follows the same curve as the inflation.

This is a perfect example of an inelastic demand/supply equation. Elasticity of demand is defined as the absolute value of the percent change in demand divided by the percent change in price. If this value is greater than 1, the product is deemed elastic. Otherwise, it is called inelastic.

Reducing prices of elastic products, generally increases the revenue, and increasing their prices generally decreases the revenue.

On the other hand, reducing prices of inelastic products, generally decreases the revenues, and increasing prices, generally increases the revenues.

Elastic products tend to be goods like luxury items etc. Inelastic products tend to be services and products that people will need, irrespective of prices. Heart surgery, for example. Cost is not a determinant of demand in this case. Prices of things like gas/oil, tend to be inelastic in a short term, but elastic in the long term, as people and communities adapt in terms of more fuel efficiency etc.

I guess, the rental apartments in these buildings are an example of an inelastic product - they will always be needed, no matter what. Quoting your observation here - that a steady stream of immigrants would always provide a bullish consumer market for these rentals.

Its not Lefrak, its the nature of this product and the market. Its simple mathematics about increasing revenues. If more people would just move elsewhere instead of paying an increased rent, and there weren't enough people to fill-in for them, the market would become elastic (by definition), and decreasing the rent would be the only way to increase revenues.

Of course, this wouldn't happen. There should be government interference in form of laws and regulations, when corporations fail to be ethically responsible toward the very community that they depend upon for their own survival.

My 2c :)

[PTMG]

Shouldn't rent increases be constrained by the inflation rates of a currency?
No. Prices on the whole rise with the level of inflation, but prices for individual goods may rise or fall drastically differently, depending on supply and demand.

[ajay_chatopadhya]

No. Prices on the whole rise with the level of inflation, but prices for individual goods may rise or fall drastically differently, depending on supply and demand.

Yes, but this should not be a case for goods that are essential. Take the example of gasoline for example. If the prices were to reach $20 a gallon, that would stall the entire economy. Similarly, if basic food starts costing $4000 a month for a person, that wouldn't be justified by the fact that clothes are suddenly selling for 5cents a suit.

Its the responsibility of the government (local or central) to ensure that essential goods closely follow the inflation rates. Specially those that are perishable, and cannot be considered investments.

[Matt]

Yes, but this should not be a case for goods that are essential. Take the example of gasoline for example. If the prices were to reach $20 a gallon, that would stall the entire economy. Similarly, if basic food starts costing $4000 a month for a person, that wouldn't be justified by the fact that clothes are suddenly selling for 5cents a suit.

Its the responsibility of the government (local or central) to ensure that essential goods closely follow the inflation rates. Specially those that are perishable, and cannot be considered investments.

High prices stimulate new supply. If you stifle the natural rise of prices, you also stifle new development. So, if there were a sudden increase in demand for food, you have two options. a) Let the price rise, and then new food suppliers will come along over time, driving the price down or at least slowing the growth or b) place price caps on food, which will discourage anyone from increasing their food output, and lead to bread lines. Bread will be cheap - if you can find it and if you wait in line for 10 hours.

Same thing goes for apartments. If rents are rising fast, they'll start throwing up lots of new apartment buildings. This increased supply will tend to offset the increased supply, relieving the upward price pressure.

So, even for essentials, market forces are essential to ensuring that supply exists to meet demand. Attempts to cap prices are pretty much guaranteed to result in a supply shortage where, instead of simply being expensive, things become hard to find at all.

[ajay_chatopadhya]

High prices stimulate new supply. If you stifle the natural rise of prices, you also stifle new development. So, if there were a sudden increase in demand for food, you have two options. a) Let the price rise, and then new food suppliers will come along over time, driving the price down or at least slowing the growth or b) place price caps on food, which will discourage anyone from increasing their food output, and lead to bread lines. Bread will be cheap - if you can find it and if you wait in line for 10 hours.

Same thing goes for apartments. If rents are rising fast, they'll start throwing up lots of new apartment buildings. This increased supply will tend to offset the increased supply, relieving the upward price pressure.

So, even for essentials, market forces are essential to ensuring that supply exists to meet demand. Attempts to cap prices are pretty much guaranteed to result in a supply shortage where, instead of simply being expensive, things become hard to find at all.

I'll have to agree with you. Although, some times, companies who are profiting from high prices, can push the prices artificially high. And some times, prices can be pushed higher just for the purpose of brand name. This creates a vicious cycle, where people view some thing as luxury and the prices increase further because of this misconception. Of course, the only one benefitting from this are these companies.

There is an interesting observation related to this too. Generally, an increase in the price of a product, would lead to decrease in demand. However, for items that are bought or sold as luxury items, an increase in price can actually increase demand.

[Puneet]

High prices stimulate new supply. If you stifle the natural rise of prices, you also stifle new development. So, if there were a sudden increase in demand for food, you have two options. a) Let the price rise, and then new food suppliers will come along over time, driving the price down or at least slowing the growth or b) place price caps on food, which will discourage anyone from increasing their food output, and lead to bread lines. Bread will be cheap - if you can find it and if you wait in line for 10 hours.

Same thing goes for apartments. If rents are rising fast, they'll start throwing up lots of new apartment buildings. This increased supply will tend to offset the increased supply, relieving the upward price pressure.

So, even for essentials, market forces are essential to ensuring that supply exists to meet demand. Attempts to cap prices are pretty much guaranteed to result in a supply shortage where, instead of simply being expensive, things become hard to find at all.

I agree with Matt on this. Requiring price controls does not work over the long term.

However it would be nice to get good and courteous service in return for the high rents.

[Lenin]

ajay,


It is a political question as to the value of price controls. Rents have often been controlled and in fact are controlled by law, if not by practice and enforcement, in the rest of Jersey City for teh last 30 years. It is controlled to max of the CPI or 4% whichever is smaller.

In the current politically conservative climate, any control of a corporation's ability to raise prices to whatever level it likes, regardless of consequences is looked on as the equivalent of the Black Plague.

Thus oligopolists or monopolists are free to charge whatever they wish, social consequences and anti trust legislation be damned.

Lefrak and the other developers on the waterfront "convinced" the mayor and city council to exempt them from rent control and even real estate taxes. The inducement must have been delicious because it was swallowed in one gulp. Oh, that particular mayor was later jailed for fraud!

So there is population pressure from immigration (not from a high birth rate) that results in a situation of demand outrunning supply in this particular market (I wouldn't exacly call it an inelastic picture but the analogy is close.) Uncontrolled rents will rise to high levels.

Anyone who thinks that's xenophobia is using a one word copout to avoid confronting the very real consequences of increasing immigration on a local economy. The situation is being faced on an almost worldwide basis as the have-not nations disperse their huge populations to the HAVE nations legally, illegally or QUASI-legally!

Asian immigration into the area is the sine qua non of the newer very high rents on the Hudson waterfront.

[PTMG]

Real estate market is actually very competetive if you let it be, it's the rent control laws that kill the market. The reason Lefrak's rents are so high is partly because he soaks up all the demand from JC and NYC that is not met with supply in the rent-controlled market (or market potentially subject to rent controls). Obviously supply isn't going to grow much in rent-controlled markets because the profit just isn't there.

Even most of the leftists economists agree that rent control laws are an example of pure economic stupidity, and you would be badly misled if you would think that rent control is the answer to Lefrak's rents. The answer is to lift rent controls everywhere else, it's 21st century, we're a little more advanced than to stick with rent controls in this day and age.

[NOmoreLIES]

Lenin, aka Dan, lives in one of the rare subsidized apartments here at Newport. Paying less than $1,000/mo for a 1 bedroom, he is part of a politically entitled class now - he hates Lefrak but refuses to leave Newport because at the price he pays, he'd rather stay and be angry than leave and pay more. You will never get him to give away his entitlement, even if his income already exceeds the current limitations for applying for the type of deal he has.

Your economic point, PTMG, is clear. If Lenin, et.al. were moved out of their 250+/- subsidized apartments, it would add 5% to the "market rate" supply, and bring down the market price bc Lefrak would have to find 200 market rate customers.

[PTMG]

Your economic point, PTMG, is clear. If Lenin, et.al. were moved out of their 250+/- subsidized apartments, it would add 5% to the "market rate" supply, and bring down the market price bc Lefrak would have to find 200 market rate customers.
That's part of it. Another part is that without rent control in JC, we'd have a lot more than Lefrak's buildings to choose from.

[goldfish]

Seeing how real estate developers are in the business of creating "communities" (at least by default) then it seems like they would also like to foster a certain amount of good will in those communities.

As far as I'm concerned there are two fundamental issues at play:

1 - The Market.
Real estate developers, and any other businessperson, will want to maximize the return on their business. And that's fine.

2 - The practice.
The actions a business person takes in order to maximize his profits must be carefully weighed against the customer's tolerance for what might be perceived to be apathy or even malice towards the customer by the business person (landlord).

I accept the dynamics of the first item, the market. I lived through the crash of 1989 and have had the opportunity to see what happens to these people when the circumstances turn against them. It does happen, and it will again.

But more to the point - I do feel like the "incentives" which were so generously offered to the Lefracks by Jersey City should in some part be shared with the "community" who chooses to stay and make this their home.

More specifically - raising the rent on an apartment which was recently vacated is completely and totally different from raising the rent of an occupied apartment. If someone has been here, and is making a good contribution to a real sense of community, why would you NOT want to give that client (tenant) an incentive to stay? The City did it for Lefrack, so why shouldn't Lefrack do it for "the People"?

I've actually spoken to people who were here during 9-11. They told me that they actually even got rent decreases! But you know what? The Lefracks made those offers because they HAD to not because they WANTED to which made the gesture hollow. It shouldn't take a national disaster before a landlord offers an act of good faith.

Everyone who actually lives here knows that this is a very transient community. And Lefrack would have plenty of opportunities to raise the rents to what ever the market will bare on the apartments that are vacated. I live next to one of the short-term corporate rentals & I have a new neighbor every time I turn my head.

But then you have to wonder if this decision to raise the rents of fine, upstanding, Loyal, long term tenants might actually be based on a cold hard calculation on the part of the landlord.

Nobody like to move. It's a huge burden.

"They won't leave... They'll pay it..."

If that's the case then even though the "market" may be strong, the "practice" is defective. And the "community" is never born. No matter how many flowers you plant or how many religions you placate during the holidays.

And that's all the news to report from Lake Wobegon...

until next time

g

[Snuffles]

Speaking of rent increases, I have rec'd an increase of 10% for a 12-mth lease. Note that we are coming off an 18-mth lease (hence, the previous increase was 18 mths ago).

Will be paying abt $2,400 for a 2BR/2BA in the Riverside bldg.

[Jay3]

Speaking of rent increases, I have rec'd an increase of 10% for a 12-mth lease. Note that we are coming off an 18-mth lease (hence, the previous increase was 18 mths ago).

Will be paying abt $2,400 for a 2BR/2BA in the Riverside bldg.


Welcome to Newport Living..........or should I say Welcome Back.

[Lenin]

I must say, I have been called many things but DAN is a first.:confused: sammlung10

[jaywalk]

I am currently living in a studio in Thomas Jefferson with a Manhattan view. I have been living in this area for 5 years. This year I have an increase for 10% up to $1,410 a month. I cannot justify the raise coz my view will be blocked by the second phase of Shore Club which will be started soon. Therefore, not only will I be losing my view but also suffering from air and noise pollution. I wrote to Mr. Garcia and the lease renewal administrator Mr.Labay twice but with no reply at all. They just ignore you. In this area, we have no bargaining power. Thanks to all those big company moving to this area.

[PTMG]

I am currently living in a studio in Thomas Jefferson with a Manhattan view. I have been living in this area for 5 years. This year I have an increase for 10% up to $1,410 a month. I cannot justify the raise coz my view will be blocked by the second phase of Shore Club which will be started soon. Therefore, not only will I be losing my view but also suffering from air and noise pollution. I wrote to Mr. Garcia and the lease renewal administrator Mr.Labay twice but with no reply at all. They just ignore you. In this area, we have no bargaining power. Thanks to all those big company moving to this area.
You do have bargaining power, you can always move out if the rent gets unreasonable. It's just that $1410 for a studio with a view isn't really unreasonable, your rent seems to have been under market rate for a while.

[overpriced_pavonia]

You do have bargaining power, you can always move out if the rent gets unreasonable. It's just that $1410 for a studio with a view isn't really unreasonable, your rent seems to have been under market rate for a while.

Why does it seem like PTMG is a spokesperson for Newport giving some disclaimer garbage about how "the hike in rent is to bring your apartment to market value"? The whole situation is shady and out of hand with 10%-20% raise increases. A studio without a view for 1410 is in Market Value range....for Manhattan.

[DogLover]

Lenin, aka Dan, lives in one of the rare subsidized apartments here at Newport. Paying less than $1,000/mo for a 1 bedroom, he is part of a politically entitled class now - he hates Lefrak but refuses to leave Newport because at the price he pays, he'd rather stay and be angry than leave and pay more. You will never get him to give away his entitlement, even if his income already exceeds the current limitations for applying for the type of deal he has.

Your economic point, PTMG, is clear. If Lenin, et.al. were moved out of their 250+/- subsidized apartments, it would add 5% to the "market rate" supply, and bring down the market price bc Lefrak would have to find 200 market rate customers.

To your point (even if his income already exceeds the current limitations for applying for the type of deal he has), shouldnt he be forced to move out if his income does exceed the limit? Why does he get to stay in that apartment at that rent if his salary has gone up? Doesn't seem too fair to me.

[PTMG]

Why does it seem like PTMG is a spokesperson for Newport giving some disclaimer garbage about how "the hike in rent is to bring your apartment to market value"? The whole situation is shady and out of hand with 10%-20% raise increases. A studio without a view for 1410 is in Market Value range....for Manhattan.
That's silly, my contract with ExxonMobil specifically precludes me from working as a spokesman for anyone else.