Local rent rules are a vestige of World War II-era inflation worries, as well as fears that landlords would take advantage of the wartime slowdown in housing construction to gouge tenants. Most cities lifted those restrictions after the war ended, but not New York. Landlords say politicians have long been kowtowing to residents, and they mutter words like "central planning" and "Soviet Union" when they discuss the topic. Reps for tenants say the rules allow the poor and middle-class to live in a town that otherwise would be beyond their means.
Whatever your position, apartment dwellers here are basically divided into two categories: the fortunate and the damned. The fortunate are those in rent-regulated apartments -- generally people lucky enough to live in rental buildings with at least six units that were constructed before 1974. The damned is everyone else. You can spend $3,200 a month on a mediocre one-bedroom with a view of an alley if it's in a decent neighborhood. It's an ongoing struggle: for tenants, the endless quest for a better deal; for landlords, the endless quest to whisk the fortunate out of their apartments and add names to the list of the damned.
Michael Grabow is paid by New York landlords to talk tenants into leaving their rent-controlled apartments. Sometimes money (how's $300,000 sound?) talks the loudest.
(Helayne Seidman For The Washington Post)
"In every other city landlords want to keep people in their homes as long as possible," chuckles Richard Aidekman, who owns 10 apartment buildings here. "Only in New York is the goal to get them out."
Billions have been made in this town crowbarring tenants out of rent-controlled apartments, through payoffs or eviction proceedings. Landlords have been known to offer $5,000 bounties to doormen who report tenants illegally enjoying the low-rent life. (Typically, it's because the apartment isn't the tenants' primary residence, or they are subletting the place, both no-nos.) One landlord, Aidekman says, sent an employee around to every tenant in a building to announce, "Congratulations, you've won a television! Just write your name and Social Security number here and the TV is yours." Anyone whose name didn't match the name on the lease was sent packing.
The hard cases are those in which the tenant is abiding by the law and the landlord wants to demolish a building to make way for some grand new development. Under certain circumstances, rent-controlled tenants can hold out and thwart the whole plan or at least force landlords to build and renovate around them. It happens all the time. In Manhattan there are office skyscrapers built essentially on top of brownstones, a monument to the intransigence of someone who wouldn't move and couldn't be evicted.
"There are people who simply love the attention," says Andrew Alpern, the co-author of ""Holdouts!," a book about New York's most stubborn lessees. "It's their moment of fame, they're having an impact on the world, maybe they're making the news. There've been a couple of crazy women -- and they're always women -- who just like being courted and enjoy the publicity."
Grabow hasn't met any publicity freaks, he says. Nor has he been forced to haggle with crazy people, which is actually his greatest fear. He has, however, come across tenants playing a game of real estate chicken with their landlords, betting that the longer they hunker down, the more money they'll be offered. A few years ago, Grabow had negotiated all but two tenants out of a building, which a landlord wanted to convert into a loading dock for an adjacent hotel.
"The landlord said to me, 'I've got $1 million for these two. They can split it any way they like, I don't care. But if they want $1,000,010, no deal.' This was after months of talking. So I went to them and I said, 'You've done an amazing job. You got the landlord to put up his last dollar. Doesn't always happen. If you don't believe me and you want more money, you're making a mistake. Can you trust me? That's up to you. I'm telling you there won't be another 10 cents.' "
One tenant said yes. The other thought it was a bluff. The renters stayed put and the landlord ripped out the floors below and built the loading dock underneath.
"They blew it," Grabow says. "Half a million each. The guy who wanted the deal was so livid he wasn't talking to the other guy."
This, according to Grabow, is the only failure of his facilitating career. A New Jersey native and lawyer by training, he has a real estate license and spends much of his time managing properties for a company called A.J. Clarke.
Facilitating is work landlords and developers could handle on their own. Many do. But if the stakes are high enough, they often want a pro, in part because the negotiations are time-consuming and in part because many tenants won't trust a landlord, no matter what.
For every assignment, Grabow must pass an interview during which he explains his approach and track record to his would-be bosses. He gets $3,500 to $7,500 per household moved, plus a bonus of between $5,000 and $100,000 when a project is completed.
So does Grabow actually do right by the tenants he moves? That's surprisingly hard to say. Last week, he called some developers and landlords who've hired him and asked for permission to share the names and numbers of some relocatees. They all said no. ("They don't feel that there is anything to gain.") About half of all deals end with confidentiality agreements and anyway, he added, most tenants are wary of discussing their sudden wealth -- which is taxable, by the way. You hear the same story from tenants' attorneys -- their clients have no interest in discussing their affairs in public. One of those attorneys, William Gribben, dealt with Grabow recently on a buyout and, for what it's worth, he had perfectly kind things to say about the experience.