Adult Adoption Ruling Highlights Perils of Rent Control

by Chris on May 7, 2018

A 67-year-old woman will continue to reside in a two-bedroom New York City apartment at the rate of $100 a month, after a housing court ruling recognizing her adoption by the former tenant one month before he died.

The woman, who previously lived in another unit in the same building, befriended the aging resident. She went from neighbor to live-in caretaker before acquiring power of attorney, and then being legally adopted as the man’s daughter, according to a news report.

Now, neighbors say she’s running a yoga center and renting out rooms on Airbnb at $50 a night.

Landlords estimate the current market rent for the unit at $1,800. The original tenant remained in the apartment for decades. Earlier this year, New York’s Division of Housing and Community Renewal granted succession rights to the woman after nearly ten years of legal battles. That gives her the right to stay in the rent-controlled apartment for the rest of her life.

The property owners, however, have had enough, and placed the building they’ve owned for 38 years on the market, according to the report.

It’s difficult to understand the increasing popularity of rent control or rent stabilization measures, given that no other private businesses — doctors, hospitals, health insurance companies, utility companies, cell phone providers, grocers — are under the same burden to cap their profits indefinitely so that consumers can stretch their dollars. The reason may be simple demographics. Tenants make up as much as 40% of urban populations, and political candidates win votes by promising lower rents.

Several states, including California, Washington and Illinois are looking at relaxing prohibitions against local rent-control ordinances. Political promises aside, cities that have these measures in place are proving that rent control is not a cure-all for affordability.

A new study conducted by Stanford University indicates that both affordability and inventory suffer in cities with strict rent-control ordinances. Focusing on San Francisco, researchers discovered housing supply there dropped by 15%, causing a 5.1% city-wide rent increase. The group suggests that government subsidies would prove a more effective means to achieve affordability than regulating private landlords.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 1 comment… read it below or add one }

Bill May 7, 2018 at 1:50 pm

You hit the nail on the head with the demographics. With such a large portion of voters being renters politicians cater to them to stay in power. One of the ways they do this is by supporting rent control.
Yet, economically it’s been shown time and time again to cause more problems long term than it solves short term. From shrinking the number of rentals as more landlords sell, to depreciating property values and quality of rentals due to the lack of supportive cash flow it completely back fires on the tenants.

Bill
The Educated Landlord

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