Deregulated or Not?

Does a vacating tenant’s legal regulated rent have to be $2700 or more before the unit can be deregulated, or does the legal rent for the incoming tenant after the vacancy just have to add up to $2700 whether or not the previous rent was that high? Lawyers disagree on everything except that the law amended in June was not crystal clear, according to the Wall Street Journal. See you in court.

Post-war oil burning buildings are the biggest energy hogs with the greatest potential for savings, according to Retrofitting Affordability, an analysis of citywide benchmarking data by the Building Energy Exchange. Depending on building size, age, and fuel type the lowest cost/fastest return on investment energy conservation measures tend to be building management systems, domestic hot water separation, and lighting replacement, according to the report.

Apartment sales represent about one third of like-kind exchanges according to a new study funded in part by NAHB. The researchers found that 88 percent of the transactions wound up eventually being sold again on a taxable basis, with taxes amounting to 19 percent more than they would have been on the original sale. The average investor also generally adds money and reduces debt on an exchange. The report, targeted at proposals to end like-kind exchanges, also found that they result in more transactions than otherwise would occur, promoting jobs and property values. Eliminating like-kind exchanges would also effect cap rates, likely causing rents to increase.

Does the 421a tax incentive make sense? An analysis of One57 — the poster child for problems with the old certificate program — by the City’s Independent Budget Office certainly raises questions. According to the IBO, “The 421-a abatement for One57 is generating 66 units of affordable housing in the Bronx at a cost of $905,000 per apartment. Had the city provided an affordable housing developer with a cash grant equal to the amount of One57’s 421-a tax expenditure, IBO estimates that nearly 370 affordable apartments at a cost of $179,000 per unit could have been produced.” Ironically, the analysis points out a much greater City subsidy for the One57 condos from the tax policy of assessing coops and condominiums as rental buildings instead of single family homes. The 421a benefit was worth less than $10 million to the building’s owners in 2014. The assessment policy saved them $16 million.

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