Negotiating rent increase (Manhattan)
March 30, 2013 8:25 AM Subscribe
I feel the proposed rent increase is unfair - how can I stay at my current rent?
I live in a large rental apartment building in Manhattan. I've been there for almost a year and the two amenities I really wanted (elevator and laundry room) have been a disaster for almost the entire time I've lived there (elevators frequently out of order, sometimes all at the same time, and laundry machines always broken). My lease renewal is coming up and the management company sent me a lease to renew. The rent increase is not very much, especially for these days when rents are being hiked insane amounts. They are asking for a 4% increase. However, my rent is a lot to begin with, so 4% actually comes out to quite a bit of money. I would have no problem with this increase except I feel that given that the amenities I wanted in the building have been nearly unusable, it's unfair that my rent should be increased at all. I actually feel I deserve a *decrease*, but I would accept staying at my current rent.
My question is, what's my best bet at this point? Call the management company's office and tell them what I said above? Write them a letter? Any relevant experience you could share would be appreciated.
I live in a large rental apartment building in Manhattan. I've been there for almost a year and the two amenities I really wanted (elevator and laundry room) have been a disaster for almost the entire time I've lived there (elevators frequently out of order, sometimes all at the same time, and laundry machines always broken). My lease renewal is coming up and the management company sent me a lease to renew. The rent increase is not very much, especially for these days when rents are being hiked insane amounts. They are asking for a 4% increase. However, my rent is a lot to begin with, so 4% actually comes out to quite a bit of money. I would have no problem with this increase except I feel that given that the amenities I wanted in the building have been nearly unusable, it's unfair that my rent should be increased at all. I actually feel I deserve a *decrease*, but I would accept staying at my current rent.
My question is, what's my best bet at this point? Call the management company's office and tell them what I said above? Write them a letter? Any relevant experience you could share would be appreciated.
I have had success calling the company and explaining this. I have also had not-success calling the company and explaining this. Fundamentally, your apartment is worth what other people are willing to pay for it. If you move out will they be able to easily rent it for the new rate? If so, you won't have much luck.
The time I had success I convinced them that raising my rent while we were in the throes of the 2009 recession was a bad idea (they essentially agreed that they were probably not going to be able to rent it at the higher rate). Other times: times were better, so no success. I suspect that, since the rental market is nuts right now, you'll have to find a new apartment.
posted by pmb at 8:49 AM on March 30, 2013 [2 favorites]
The time I had success I convinced them that raising my rent while we were in the throes of the 2009 recession was a bad idea (they essentially agreed that they were probably not going to be able to rent it at the higher rate). Other times: times were better, so no success. I suspect that, since the rental market is nuts right now, you'll have to find a new apartment.
posted by pmb at 8:49 AM on March 30, 2013 [2 favorites]
It won't hurt to threaten to leave (nicely) because they may prefer to keep you than to pay someone to find a replacement. But it's Manhattan, and they can find someone to replace you easily, possibly at a higher price than they're offering you to cover the cost of finding said replacement.
Bringing up the laundry machines and elevator is going to get you nowhere. Those are not items, like heat, that materially affect habitability, and they will likely laugh and find some other poor sop who won't complain. I'm a landlord, and in a tight rental market, I won't tolerate complainers.
It's Manhattan. Normal rules don't apply.
posted by walla at 8:50 AM on March 30, 2013 [2 favorites]
Bringing up the laundry machines and elevator is going to get you nowhere. Those are not items, like heat, that materially affect habitability, and they will likely laugh and find some other poor sop who won't complain. I'm a landlord, and in a tight rental market, I won't tolerate complainers.
It's Manhattan. Normal rules don't apply.
posted by walla at 8:50 AM on March 30, 2013 [2 favorites]
I'm a landlord, and in a tight rental market, I won't tolerate complainers.
Wow. Elevators AND laundry broken for most of the year, all OP is asking for is not paying MORE rent for the privilege of living in a building with frequently inoperable laundry and elevators and she's a complainer? However, I note with some relief you live in the Chicago area so I don't need to worry about possibly renting from you!
Talk to the management company, perhaps this will result in more action on fixing the elevator/laundry, perhaps they'll go with you staying at the current rate for another year - if not, I'd strongly consider moving. I think your experience with them so far is a pretty good indicator of their behavior in the future. Either stay, accepting the problems will likely recur or move into a new place that hopefully will have more responsible management.
posted by arnicae at 9:12 AM on March 30, 2013 [11 favorites]
Wow. Elevators AND laundry broken for most of the year, all OP is asking for is not paying MORE rent for the privilege of living in a building with frequently inoperable laundry and elevators and she's a complainer? However, I note with some relief you live in the Chicago area so I don't need to worry about possibly renting from you!
Talk to the management company, perhaps this will result in more action on fixing the elevator/laundry, perhaps they'll go with you staying at the current rate for another year - if not, I'd strongly consider moving. I think your experience with them so far is a pretty good indicator of their behavior in the future. Either stay, accepting the problems will likely recur or move into a new place that hopefully will have more responsible management.
posted by arnicae at 9:12 AM on March 30, 2013 [11 favorites]
Mod note: Please do not debate other commenters; thanks.
posted by LobsterMitten (staff) at 9:20 AM on March 30, 2013
posted by LobsterMitten (staff) at 9:20 AM on March 30, 2013
OP, check out this article- seems like the tenant method of choice for protesting rent hikes is to simply move out.
If I were you, I'd send a letter and ask that my rent remain as it was, but if they say no you should be prepared to put your money where your mouth is and move out. And you should probably expect that outcome.
posted by showbiz_liz at 9:23 AM on March 30, 2013
If I were you, I'd send a letter and ask that my rent remain as it was, but if they say no you should be prepared to put your money where your mouth is and move out. And you should probably expect that outcome.
posted by showbiz_liz at 9:23 AM on March 30, 2013
it's unfair that my rent should be increased at all.
I do not understand what "fair" has to do with anything. Maybe the landlord thinks the increased costs in doing business are not "fair" but that does not change reality. In any event, he gets to decide what the use of his property is worth. If you agree, you pay. If not, you don't i.e. you move.
I am a residential landlord and a lawyer who does some landlord tenant. Negotiations are about leverage. I take from your question that you have none. The landlord knows that if you leave, he will find another tenant with ease. I predict that you will be moving soon. Of course, given the tight rental market, you may be trading one set of problems for another.
posted by Tanizaki at 9:37 AM on March 30, 2013 [3 favorites]
I do not understand what "fair" has to do with anything. Maybe the landlord thinks the increased costs in doing business are not "fair" but that does not change reality. In any event, he gets to decide what the use of his property is worth. If you agree, you pay. If not, you don't i.e. you move.
I am a residential landlord and a lawyer who does some landlord tenant. Negotiations are about leverage. I take from your question that you have none. The landlord knows that if you leave, he will find another tenant with ease. I predict that you will be moving soon. Of course, given the tight rental market, you may be trading one set of problems for another.
posted by Tanizaki at 9:37 AM on March 30, 2013 [3 favorites]
To be clear - I'm not at all saying that the OP doesn't have a point or doesn't "deserve" a rent decrease. I'm saying, like Rodrigo Lamaitre, that negotiations will be based on the power differential and not what the OP does or doesn't "deserve." In tight markets but ESPECIALLY in Manhattan (where I'm from), the landlords have the upper hand. And yes, complainers are a landlord's enemy :-)
posted by walla at 9:42 AM on March 30, 2013 [1 favorite]
posted by walla at 9:42 AM on March 30, 2013 [1 favorite]
Yeah fair has nothing to do with this. It's a business transaction, the landlord thinks he can get one rent and you want a different one. If you don't agree to his rent increase then your options are either to attempt to negotiate a different rent or move out.
Moving will likely cost you more than the increase in rent, and the landlord is betting on you making that calculation.
posted by dfriedman at 9:45 AM on March 30, 2013 [1 favorite]
Moving will likely cost you more than the increase in rent, and the landlord is betting on you making that calculation.
posted by dfriedman at 9:45 AM on March 30, 2013 [1 favorite]
Unfortunately, tenants do not have a lot of power in rent negotiations. The landlord knows the profit margin on your unit and knows which costs the rent increase is supposed to offset; the tenant does not. You don't know who in the management company/building owner hierarchy knows this information or has the authority to make decisions based on it. Not to say you should not try to negotiate different lease terms, but be aware that you really are coming from a less than ideal negotiating position
The landlord/building owner (and maybe the management company) also knows the minimum cost of losing a current tenant and moving a new tenant in. In a tight rental market, there's not much risk of a unit sitting empty, so a landlord rarely faces more than the minimum cost in turning over a tenant (my minimum cost as a landlord is: the between tenant cleaning, between tenant painting, leasing agent fee and two weeks' lost rent--I personally don't like arranging to turn over my unit in 72 hours, but that's not at all typical. Most landlords in a tight market are looking at 2 days lost rent in a turnover). There's some risk of losing a "good" tenant and gaining a "bad" tenant, but that's a hypothetical cost, not a real one. It's also a cost that tends to burden the management company more than the landlord/building owner, who may not be the same entity. Rental increases are usually chosen with the costs of turnover factored in.
A tenant really does not know what any of these costs are, although the tenant can estimate the lost rent pretty easily. So the tenant is lacking essential information for a successful negotiation. If you're negotiating for a lower rent than the proposed increase, your offer of total annual rent must still be higher than current annual rent and cover whatever increased costs the landlord is facing. It must be not lower than the proposed new annual rent less the anticipated costs of re-letting.
Otherwise, there must be some real, tangible, significant benefit to accepting your lower rent offer. Generally, in a tight rental market, the only benefit you offer is the known tenant over the unknown tenant. But you have no idea of whether or not the landlord/owner/management company considers you a tenant who is better than your average tenant or worse. You have no idea if new tenants have already been identified.
Deficiencies in the building, unfortunately, are not leverage in your favor. No matter how much you feel they should be. They may make one building less attractive than another to some tenants, but the landlord/management company has a better idea than you of how hard it will be to re-let. These deficiencies may even be the reason for the rental increase--which seems backwards, but the management company needs money to cover the costs of keeping the elevators running. It might be malice or incompetence that's keeping them from doing that now, but it's probably money.
You've got almost no leverage in a rent negotiation, which isn't fair, but is the truth. You may not be getting good value for your current rent, which also isn't fair, but your assessment of the value for your rent is not a concern for a landlord in a tight rental market with good information about the costs of re-leasing.
Subtract your current annual rent from the proposed increase. Weigh that difference against your costs of moving. Know that information before you make a counteroffer so you can properly evaluate any counter they make.
So again: not to say you should not try to negotiate different lease terms, but be aware that you really are coming from a less than ideal negotiating position. Tenants rarely manage to avoid a rent increase, even when they successfully negotiate a lower rent increase, because however it seems from your end, rent increases are rarely capricious and generally have an operating reason behind them. It may not be a simple reason (like a management cost increase); it may not be a fair reason (like trying to change out tenants), but it's almost never "well, we can raise the rents because we want to."
posted by crush-onastick at 10:17 AM on March 30, 2013 [1 favorite]
The landlord/building owner (and maybe the management company) also knows the minimum cost of losing a current tenant and moving a new tenant in. In a tight rental market, there's not much risk of a unit sitting empty, so a landlord rarely faces more than the minimum cost in turning over a tenant (my minimum cost as a landlord is: the between tenant cleaning, between tenant painting, leasing agent fee and two weeks' lost rent--I personally don't like arranging to turn over my unit in 72 hours, but that's not at all typical. Most landlords in a tight market are looking at 2 days lost rent in a turnover). There's some risk of losing a "good" tenant and gaining a "bad" tenant, but that's a hypothetical cost, not a real one. It's also a cost that tends to burden the management company more than the landlord/building owner, who may not be the same entity. Rental increases are usually chosen with the costs of turnover factored in.
A tenant really does not know what any of these costs are, although the tenant can estimate the lost rent pretty easily. So the tenant is lacking essential information for a successful negotiation. If you're negotiating for a lower rent than the proposed increase, your offer of total annual rent must still be higher than current annual rent and cover whatever increased costs the landlord is facing. It must be not lower than the proposed new annual rent less the anticipated costs of re-letting.
Otherwise, there must be some real, tangible, significant benefit to accepting your lower rent offer. Generally, in a tight rental market, the only benefit you offer is the known tenant over the unknown tenant. But you have no idea of whether or not the landlord/owner/management company considers you a tenant who is better than your average tenant or worse. You have no idea if new tenants have already been identified.
Deficiencies in the building, unfortunately, are not leverage in your favor. No matter how much you feel they should be. They may make one building less attractive than another to some tenants, but the landlord/management company has a better idea than you of how hard it will be to re-let. These deficiencies may even be the reason for the rental increase--which seems backwards, but the management company needs money to cover the costs of keeping the elevators running. It might be malice or incompetence that's keeping them from doing that now, but it's probably money.
You've got almost no leverage in a rent negotiation, which isn't fair, but is the truth. You may not be getting good value for your current rent, which also isn't fair, but your assessment of the value for your rent is not a concern for a landlord in a tight rental market with good information about the costs of re-leasing.
Subtract your current annual rent from the proposed increase. Weigh that difference against your costs of moving. Know that information before you make a counteroffer so you can properly evaluate any counter they make.
So again: not to say you should not try to negotiate different lease terms, but be aware that you really are coming from a less than ideal negotiating position. Tenants rarely manage to avoid a rent increase, even when they successfully negotiate a lower rent increase, because however it seems from your end, rent increases are rarely capricious and generally have an operating reason behind them. It may not be a simple reason (like a management cost increase); it may not be a fair reason (like trying to change out tenants), but it's almost never "well, we can raise the rents because we want to."
posted by crush-onastick at 10:17 AM on March 30, 2013 [1 favorite]
Look, fair or not is irrelevant. You don't want to renew the lease at an increased level of rent. You can communicate this to the management company.
But you should be prepared for them to tell you that's fine but we won't renew at the current level, please move out at the end of your lease period.
So work out if you're happy to move, before you have that communication. And be sure that you can find an apartment that meets your requirements in your price range in an acceptable neighbourhood by the time your lease expires before you do.
posted by koahiatamadl at 10:49 AM on March 30, 2013 [1 favorite]
But you should be prepared for them to tell you that's fine but we won't renew at the current level, please move out at the end of your lease period.
So work out if you're happy to move, before you have that communication. And be sure that you can find an apartment that meets your requirements in your price range in an acceptable neighbourhood by the time your lease expires before you do.
posted by koahiatamadl at 10:49 AM on March 30, 2013 [1 favorite]
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Chances are, unless there are many vacant units in the building, they can quickly find someone else to move in if you move out.
posted by sninctown at 8:36 AM on March 30, 2013 [11 favorites]