Today, the NY Times’ business section finally noticed something that’s been glaringly obvious for some time, at least if you’d paid any attention to the past few years of landlord-tenant strife. No longer are tenants fighting the traditional landlord, who is penny-pinching to keep his profit-over-expenses margin healthy. Now, they’re facing companies with names like Cardinal/Vantage/Pinnacle/GFI Investment Corporation, who bought their buildings with loans that cannot te repaid if their current, rent-stabilized tenants remain in their homes. As Gretchen Morgensen’s piece explains:
As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York.
I’ve also looked at those “promotional materials,” though I’m glad someone more numerically adept than I is looking at the financial data. No, short of me going off for a third masters’ degree, I have one question– for Morgensen, James Surowiecki, and perhaps the Court of Appeals:
Do our current banking/lending laws not proscribe giving a loan that can ONLY be repaid if the creditor breaks the law?
I asked that of Al Amateau, a smart and sage writer whose desk is next to mine. He shrugged. Is that really our final answer?