Even rent-stabilized tenants lured into homeownership as housing prices decline

New York /
Dec.December 14, 2009 10:01 AM

Falling home prices have begun to drum up interest even among some of the most unlikely of first-time homebuyers: the city’s rent-stabilized tenants. Some are looking to upgrade their living spaces, while others simply want to experience homeownership. Most all of them, however, are looking to take advantage of what are now rock-bottom mortgage rates and low property values, and more and more of them are doing just that. Arthur Freedman, who is currently paying $725 per month for the East Village rent-stabilized studio he has occupied for the past 29 years — market-rate studios in his building now rent for $1,800 a month — is in contract to buy an Upper West Side studio of comparable size for $305,000. At the height of the market, a similar space would have gone for roughly $360,000. Freedman said he believes the landlord at his current spot let a leak in his bathroom go without repair for several months, while likely responding to complaints from market-rate tenants without hesitation. But despite the pitfalls to renting, it is difficult for many rent-stabilized tenants to leave behind the sense of security that comes with minimal and predictable rent increases that fall well below market rates. “It’s a bit of a golden noose kind of thing,” said Thomas Coates, an agent with Halstead Property. “They may be in a dump, and the landlord is trying to get them to move, but some just don’t want to give up the security blanket.” [NYT]


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