“Profit” is such a dirty word to some Americans it makes you wonder if they realize it has made the United States the richest nation in the world.
Which brings us to an astonishing rent control saga in Washington Heights.
Covering a case pitting 78-year-old Freda Henderson against landlord Westside Ventura II LLC, Gothamist wrote, “Her lawyer said in a statement that the judge’s decision ensures Henderson can stay in her affordable home and protects her from the landlord’s goal of evicting her to maximize profits.”
“This case is not just about one tenant,” said Patrick Tyrrell of Mobilization for Justice, who represented Henderson. “It is part of a pattern of landlords exploiting legal loopholes to erode rent protections and displace long-term residents.”
Wait a second. Exploiting loopholes? Eroding rent protections? Displacing residents?
Given the facts of the case, Tyrell’s characterizations look a lot like spin. And dissecting his argument helps debunk some common myths associated with rent control and the motivations underlying both landlords and tenants.
Let’s start with his attack on profit. Setting aside whether the law entitles Henderson to a rent-controlled unit, her lawyer’s demonization of profit is hypocritical.
Capitalism works because people are trying to profit. That is why communist China switched to a market economy — pulling a billion people out of poverty and supercharging productivity. Yet Tyrell is portraying profit as a cause of poverty.
If the landlord is trying to “maximize profits,” the tenant is trying to minimize rent. Which is really the same thing. Henderson’s profit is her income (Social Security) minus expenses. Her primary expense is likely her rent, which is … wait for it … $640 a month.
That’s for a two-bedroom in Manhattan, where the median rent is $4,500.
To accomplish her goal of maximizing profit, when her longtime roommate died, Henderson, who was not on the lease, kept paying the $640 rent in his name and hoped the landlord wouldn’t notice. For years, he never did.
But in 2017 a new landlord caught on to her ruse and sought to convert the unit from rent-controlled to rent-stabilized.
That is how the law was designed in New York. It’s not a loophole. It’s the intent of the legislation. Fifty years ago, when rent control was replaced with rent stabilization, tenants were allowed to keep their rent-controlled leases until they moved out or died.
If the landlord can be said to be “exploiting a loophole” by evicting a tenant who was not on the lease, the tenant can be said to be exploiting a loophole by saying she was the previous tenant’s common-law wife and thus entitled to succession rights.
That is what the judge ruled, by the way, although the decision could be reversed on appeal. Both sides certainly have a case. One could even argue that Henderson was the exploiter for occupying a $640-a-month two-bedroom in the name of a deceased tenant.
But to give the impression that the decline in rent-controlled units — from 100,000 three decades ago to 24,000 in 2023, as Gothamist noted — is “part of a pattern” to “displace long-term residents,” as Tyrell said, is wrong.
Here are the facts:
Rent control is being deliberately phased out by the state and replaced with rent stabilization. Landlords are trying to charge and collect the legal rent on their units. Westside Ventura II LLC and Freda Henderson are both trying to assert their rights under state law. The courts will decide who is right.
Read more
Rent-stabilized building sells for $285K — a 97% value cut
It’s official: Rent control is about wrecking apartments
Candidates pledge to raise vacancy rate, but they’re hiding something
