Can you count the times you’ve moved?  Remember how much fun it was?  How long it took you to unpack the final boxes?

Got everything?

Most of us hate moving – and we understand that moving is a sunk cost that yields nothing but emotional, temporal, and economic entropy, so we try to stay in one places.  Landlords know this, which is why they like to push the rents up just below the threshold where moving becomes worthwhile. 

That makes the landlords rational, and us rational too.  Then there are some who are irrational, at least when it comes to moving, as revealed in this oddly sympathetic New York Times article:

In the nine years since he came to New York with $500 in his pocket, Martin-Christopher Harper estimates that he has moved at least 40 times.

Four times a year?  I’d say what Mr. Harper has is an obsession.

Make sure you label whose is whose

“Martin-Christopher Harper, right, at home with his roommate, Eli Schmidt, has a steady mover. (Image Michelle V. Agins/ The New York Times”

When he lists the neighborhoods he has lived in — in chronological order — he sounds like a bartender reciting a long list of microbrews: “Brooklyn, Chelsea Hotel for a moment, Bronx, Carroll Gardens, Crown Heights, Red Hook, Carroll Gardens, Greenpoint, Chelsea, Crown Heights, Carroll Gardens, Williamsburg, Bushwick, Bed-Stuy, Williamsburg, East Williamsburg …”

Don’t necessarily start with this dude.

Mr. Harper, 32, a hairstylist, moved to New York from Los Angeles, where he still has a share in an apartment.

Mr. Harper evidently has sufficient disposable income to maintain living accommodations in several cities.

Happy to be paid each time the insecurity strikes: Mr. Harper’s mover, Mark Ehrhardt. (Image Tony Cenicola/ The New York Times)

He says he moves a lot because he is always looking for a better deal, a better space, a better neighborhood. He acknowledges, though, that moving is something of a compulsion, and that after tackling the issue in therapy and connecting his feverish relocating to his moving frequently as a child, he has begun to cut down. He has lasted more than a year in his current apartment in East Williamsburg, a record for him in New York. These days he has a roommate, Eli J. Schmidt.

All right, we will stipulate that Mr. Harper is unrepresentative of anything to do with real estate, and will move on to more practical moving issues:

Whether one moves frequently or almost never, moving is an intensely emotional experience. The underlying psychological issues involved in real estate decisions are of great interest to therapists and psychologists, because housing and moving are filled with symbolism, the hope for new beginnings, crushing disappointments, loss, anxiety and fear.

As I’ve posted before, we associate change in living accommodations with change in sexual relationship: we move in with someone, live together, set up house (or set up light housekeeping, nudge nudge) or move out.

You move around a bit, eh? Move around!

And we know that more bedrooms means more babies, so it’s no wonder that Jung interpreted the house in dreams as an expression of the self.

I pray for security of tenure

 “Panic can really set in around your home and your apartment,” said Ronnie Greenberg, a Manhattan psychoanalyst. “It’s a matrix of safety, so moving is incredibly stressful and people don’t realize it — they mainly talk about the packing and the external part of moving.”

Perhaps it’s understandable that people pack in a great flurry, and then unpack at leisure.  (My new office, the one I’ve occupied for only a year, still has an unpacked box or two.)  Perhaps it’s our way of closing a chapter of our lives and then opening it in layers, like peeling an onion, reinventing ourselves by what we choose to revive and what we choose to hide.

Mr. Harper and others who choose to move frequently are likely to be risk takers, psychologists say.

Try rootless and unable to commit?

Some therapists, borrowing a term used in Alcoholics Anonymous, call frequent moving “pulling a geographic,” seeking external changes to change internal problems.

If your environment displaces you, run away from it.

But as Elizabeth Stirling, a psychologist in Santa Fe, N.M., who specializes in helping people make life changes, said, “No matter how much you move, you still take yourself with you.”

“No matter where you go … there you are.”

On the other hand, those who never or rarely move can be frozen by a fear of change, psychologists say.

Those psychologists – they miss nothing, nothing!

The prospect of leaving the place that is the center of your universe or the one constant in your life can be frightening.

Perhaps, on a more serious note, this arises from the same phobias that lead to hoarding.

Even finding a new dry cleaner, deli or coin laundry can stir up deep worries of impending isolation and loneliness.

Just like hoarding.

“For the longest time, moving was a bitter consequence of making money when you were selling real estate,” said Michael Moshan, a real estate lawyer and a partner in Gold Scollar Moshan in SoHo. “If I was selling my apartment and buying another one, I was making money. I had to swallow the pain of moving because I was banking something significant. Now people are moving and the moving aspect becomes much more bitter.”

Loss of home = loss of place = loss of self.

Packing and sorting through a life’s worth of belongings — especially, say, if the move is the unhappy result of a divorce or other trauma — can be gut-wrenching.

We define ourselves by what we leave behind.

For Stephen Klein, 43, a renter, a single father and a librarian at the City University of New York, the process of moving is “very emotional.”

Stephen Klein would very much like to move from his rental in Prospect Heights, Brooklyn, because he needs more space. (Image Michelle V. Agins/The New York Times)

Renting is a much more flexible tenure, and is therefore associated with more flexibility surrounding our personal relationships.

Mr. Klein has moved nine times in the last 14 years, often as relationships — including a marriage — began and ended.

Move = change in household configuration.

Now, he would very much like to move from his rental in Prospect Heights, Brooklyn, because he needs more space. He wishes his 10-year-old daughter had her own room instead of the loft he built for her above the kitchen.

That’s the thing about children – even if your conjugal relationship sunders, your parental one survives.  I wonder how Mr. Klein’s daughter feels about his peripatetic lifestyle.

I’ve just got happy moving feet!

He said he would like to stay in Prospect Heights, where he has friends and a sense of community — all the more important because he is single.  [Currently – Ed.]  But the apartments with more space that he can afford are in far-off neighborhoods.

Mr. Klein, all living accommodations involve choice.  You can drive (or commute) until you qualify, or you can live in town in less space.  Just as markets are places where people tell the truth to each other about what they value, living choices are the tangible expression of what we value, and how much.  You are what you live in.

“I feel like I’m a refugee,” he said. “I really feel like I wish I could have a sense of home. I feel like I’m floating out there.”

Either buy something or accept what you have. 

 “If you say you are trapped,” said Linda Sapadin, a Long Island psychologist and a motivational speaker, “that’s like the trapping of an animal. It’s a pretty shocking visualization. It’s better to say, ‘I can’t move right now,’ and ask what can you do to make your environment safer, more pleasant. Adding the two words ‘right now’ is a tremendous liberator psychologically.”

Psychologically, renting is transitory, and what we will accept if “this too shall pass” can be so much less than we will accept if we have convinced ourselves it will be forever.  Conversely, ease of moving influences the dynamics of market pricing.  In equilibrium markets, where vacancies are plentiful, renters have the advantage; when they are scarce (thanks for nothing, rent control), property owners have the upper hand.

Will Cox’s apartment on Riverside Drive and 92nd Street has been a constant in his life — too constant. He has “walked down the same block 10,000 times,” and longed to leave the neighborhood.

Mr. Cox, 38 and the owner of a television and film post-production company, has lived in a rent-controlled apartment that he took over from his parents, who now live in Connecticut.

SHAKE-UP Will Cox and his wife, Lynn Van Lith, prepare to leave his childhood home. Their daughters, Margot, left, and Matilda, help out. (Image Rob Bennett for The New York Times)

Allow me a moment to become infuriated.  Even assuming that one finds rent control justifiable in the abstract – to protect some deserving group – by what reasoning does Mr. Cox qualify? 

He took over the apartment from his parents, so in effect inherited wealth from a non-property right.

He is in no sense indigent, as the owner of a television and film company.

He has not needed the money for living expenses, instead saving it (see below).

He has never lived anywhere else, except for the four years he was away at college in California.

The inherent subsidy of Mr. Cox’s apartment has reduced labor mobility – look how long he has stayed – and not coincidentally, transferred wealth from the property owner to Mr. Cox and his family:

The place has allowed him and his wife, Lynn Van Lith, who have two daughters, ages 1 and 3, a bit of a financial cushion.

But in some ways it has also been a burden: Giving up a $1,200 two-bedroom apartment in Manhattan is not an easy decision, even if you are eager to go.

Such a burden, being weaned off the subsidy teat at 38.

You’re too old for this, junior

“I have all these memories of the neighborhood, these sorts of ghosts that follow you around,” he said. “And for me, it doesn’t at the moment feel entirely like my own life. I still feel like I’m under the shadow of my parents. That rite of passage of finding your own place to live in New York, that experience, I had never had it.”

It was always available to you, sir, had you chosen to pay market rent.

The logjam broke when Mr. Cox was offered an incentive by his landlord.

Yes, I can see where being paid would knock the sentimentality right out of your head.

He is moving today to an apartment he and Ms. Van Lith bought in Fort Greene, Brooklyn. And beneath the financial calculations of the move, and the uneasiness that comes with putting all of their savings into the apartment, they have complex feelings. One is excitement: They are off to start “a new history,” he said.

When you move, you choose.  Choice = life. 

I chose to drop it

Drop a pebble in the water

And the wave will reach the shore

Light a candle in the darkness

Someone somewhere finds a door

Turn your eyes away from people

And they’ll turn their eyes from you.

It’s a lesson hard to learn that

What you are is what you do.

– Shadowfax, What Goes Around

Whatever choice you make, you cannot make the same choice again.

You’re not the same reader/ and it’s not the same blog post?

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We think of apartments, like other forms of housing, as existing in a particular space, but they also exist through time – our occupancy occurs nights, weekends, mornings, and holidays.  Because we make our move-in decision based solely on a few snapshots – a half-hour walkthrough, perhaps, or maybe a second visit, we forget that it is not always sunny, not always warm, not always the work day, and the serene personal oasis we imagine may at some other time be a cauldron of olfactory, aural, photonic and rodental intruders, as illustrated by this rueful New York Times:

I’m not on the lease

And in New York City, where there are untold challenges to vertical living, a seemingly endless number of pitfalls lie in the real estate road.

1.         Wrong end of the gravity well

To an urbanist, location doesn’t mean just two dimensions, but three: how high do we want to be?   Before residential elevators were invented (for New York City, naturally), the higher you went, the more you walked, and hence the lower the rent (once you got above the ground floor, that is).  Now verticality is a choice, and it has consequences.

Consider the unfortunate story of Rob Paladino. Three years ago, he rented a one-bedroom pied-a-terre on the fifth floor of a new apartment building in the garment district. For $3,800 a month, he got a generous 600-square-foot patio [In addition to his interior apartment – Ed.], built above four floors of retail space on top of the building’s first setback.

A Manhattan patio: hope there’s nothing above you

With urban living, zoning is similarly three-dimensional: it’s not just how many feet back from the sidewalk you must be at ground level, but also at various heights.  Our natural propensity for pyramidal structures coupled with the structural challenges of lifting weight into the sky, yields periodic setbacks, and periodic patios.

Sounds blissful, doesn’t it?

Then came the cigarette butts: incendiary paratroopers raining down from Mr. Paladino’s neighbors — 40 stories of them, or about 280 apartments.  

God, I wish you wouldn’t smoke those big butts

Mr. Paladino thinks his neighbors, mostly young professionals sharing places, assumed the butts would float to the street.

Instead, “they would burn through my awning and the patio chairs,” he said. “I would make a game trying to figure out what the brands were.” (Lots of Newports, he said.)

Anyone who’s ever lived adjacent to an interior courtyard or air shaft knows how disgusting it is at the shaft’s bottom.

Then one morning a sad young Japanese couple appeared at his door.

“They couldn’t communicate why, but they seemed to really need to get out on the patio, so I let them through,” Mr. Paladino said.

Their cat, it turned out, had plunged from the 36th floor to the great beyond.

“Pussy!!!!”

Still determined to enjoy what most New Yorkers would consider a perk of enviable proportions, Mr. Paladino persevered — until the night he held an alfresco gathering that collided with a couple’s argument 8 or 10 floors overhead.

“When the first candy dish hit, it sounded like gunfire,” he said. “Glass shards went everywhere. We ran inside and more stuff came down — a little statuette, a child’s toy, a model car. After that, it didn’t feel safe out there.”

It’s a gesture of endearment

“If you’re on the 16th floor with a setback patio and there’s only 9 floors above you, that’s totally different,” he said. Not only are there fewer potential sources of detritus, but, he speculated, people who pay a premium to live on a higher floor might be more courteous and respectful.

2.         Noise from within and without

Cities are noisy, and we retreat home for quiet – which we do not always receive.

When the Boss and I are checking into hotel rooms, we like high levels, away from the street, and away from the elevators.  With good reason:

It gets noisy when you push the button

People who have lived near an elevator frequently balk at doing so again.

“They feel the elevators themselves are noisy and also people tend to congregate in front of the elevator,” said Laurence P. Mitchell, an associate broker at Prudential Douglas Elliman.

Ground level’s also a constant source of both noise and visual intrusion:

When Alina Munoz moved to New York nearly four years ago, she shared a ground-floor street-facing two-bedroom apartment with several roommates.

“It didn’t allow much natural light because we kept the blinds closed for privacy from the street,” said Ms. Munoz, 27, a founder of Culintro, a restaurant-industry trade organization.  [Clever name – Ed.]  “You could hear every conversation. And every single morning at 7:30, the doorman would hose off the sidewalk and the windows, so every Saturday and Sunday, I would be woken up with what sounded like a fire hose blasting at my windows.”

Every day at 7:30

 “On Saturday and Sunday mornings, you would hear kids playing and the parents would stand around letting kids be kids,” she said. “Then they also had gatherings like Alcoholics Anonymous, and on Tuesday or Thursday night there would always be a group of smokers outside — you could hear them when you’re on the ground floor.”

Precisely because they are filled with strangers, cities are lively.  What Jane Jacobs called eyes on the street also represents voices.

I’ll yell at you if you ignore this sign

Loud, smoke-emitting crowds are more commonly associated with nightclubs, bars and restaurants, not always the best downstairs neighbors. Once bitten, many people vet prospective blocks, sometimes conducting late-night sweeps to check for club activity invisible during the day.

If you want to know a neighborhood, you need to experience it continuously for the full 168-hour week.

Flavie Bagnol, the director of communications for Thrillist.com, rented an apartment on East 64th Street, near but not facing Second Avenue. Late-night trucks racing down the avenue would hit something that sounded like a bump, triggering thunderous, bone-rattling explosions.

“I looked many times to see if there was a speed bump or a hole, but there was really nothing beyond maybe an uneven part of the road,” Ms. Bagnol said. “I tried earplugs, white noise, thicker curtains, music, and nothing ever covered it. I didn’t sleep well for two years.”

When her lease was up, she bought a studio apartment facing a courtyard in the West 60s.

“The first thing I did when I looked at the apartment,” Ms. Bagnol said “was see if there was a lot of traffic, like any buses stopping by, and I made sure I was not on a main artery. I went back at night and checked the noise with the window open and closed.”

New home: Flavie Bagnol in her new home, free of road noise.

3.         The daylight bakery

With all those windows behind her, minimalist shades, and polished floors, I wonder if Ms. Bagnol faced this little challenge:

Paul Purcell, a founder of Charles Rutenberg Realty, fled south-facing floor-to-ceiling windows, trading them for an apartment with open views facing north.

Boiling in Manhattan

“I boiled, even in the winter time — it was like a heat box,” he said.

Also, he complained, “my floors were bleached and my furniture was bleached if I didn’t put my blinds down every day, so what was the point of having a view?”

Other apartment hunters, shuddering at the memory of long winters without a ray of sunlight streaming through the windows, give north-facing apartments the cold shoulder.

To  be sure, baking and freezing as the seasons roll is not limited to apartments; as a prerogative of the boss, I’ve had window or corner offices the last three buildings my company has occupied – and each time I’ve hung multiple sweaters behind my door, to be able to pull on or off the necessary layers.

Heat costs extra, baby

4.         Little visitors

Then too, apartments can have incumbent occupants who are unusually shy, revealing themselves only after you’ve moved in:

Last December, Colleen Mathis, 27, and her boyfriend, Rene Gonzalez, 35, sublet a rent-controlled apartment from a friend of Ms. Mathis’s family. It was a one-bedroom walk-up in the East 70s for $600 a month.

No story of New York apartment living can be told without stumbling over the Big Apple’s rhinoceros: rent control, and its market-distorting effects.

“When we first moved in, we noticed a little bit of a problem with mice,” Ms. Mathis said. “Then, in January, I was sleeping and felt this little tickle on my feet, and I woke up to a mouse scurrying off the bed. About two months ago, it got really bad — we were seeing maybe two mice a day.”

Once bitten: Rene Gonzalez and Colleen Mathis moved to get away from mice

In a normal marketplace, the couple would have dozens if not hundreds of apartments from which to choose, and a landlord who tolerated mice would find himself with only mice as tenants.  With rent control and shadow sublets, who’s accountable?  Who’s motivated? 

This fall, after a mouse stole up her arm and she accidentally drank a cup of coffee laced with mouse droppings, Ms. Mathis and Mr. Gonzalez reluctantly went looking for another apartment.

They took a flashlight on their hunt, searching for telltale signs: droppings and “weird holes” between walls and floors.

With rent control and rent stabilization, the de-motivated landlord cannot be relied upon, so prospective renters have to do their own diligence.

“We almost took a duplex that seemed too good to be true,” said Ms. Mathis, a publicist. They ruled it out when Mr. Gonzalez, a freelance videographer, turned up incriminating evidence with the flashlight.

They recently rented a large one-bedroom apartment in an older, well-maintained walk-up on East 88th Street near Madison Avenue for $1,600 a month. The day they moved out of their mouse pad, their downstairs neighbor was leaving for the same reason.

Rent control’s rot seeps in not just to the apartments themselves, but also to the psyche and culture of both landlords and residents.  Nowhere in America would this story be told by upper-middle-income renters:

Lee Alexander, a television producer, broke her lease two months after moving into a building on St. Marks Place that turned out to have rats in the walls and the basement laundry room.

When she found the ground-floor apartment, it had never occurred to her to look for signs of rats, like the presence of pesticides and warnings to keep garbage cans tightly shut.

They’re cheaper than getting rid of the problem, and they comply with the code, so what’s the problem?

Horror stories: Lee Alexander’s horror stories include rats and racket. She now lives in quiet Stuyvesant Town

For Ms. Alexander, as for Napoleon, her troubles came not in spies but in battalions:

Her rat problem vanished, only to be replaced by a different species of nuisance, one she might have avoided if she had checked out the apartment at night. Her place was within shouting distance of “Stomp,” a musical predicated on the percussive potential of not only heavy boots, but hub caps and garbage can lids.

“My bathroom was right over the backstage for ‘Stomp,’ so from 8 to 11 p.m. nightly I got the full show in my bathroom,” Ms. Alexander said. “It was an awful, noisy situation.”

She lived there for several years before rising to the top of the waiting list (and a top-floor apartment) in Stuveysant Town, a sprawling apartment complex whose residents don’t drum on trash bins. However, the owners were recently found to have improperly raised rents and deregulated units.

“For the most part it’s a lovely, quiet place to live, except for the weird increases in rent,” Ms. Alexander said.

Which, it must be said, keep Stuy Town well below market.

You get what you pay for.

They look the same, but the experience is vastly different

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I may not own it, but I occupy it!

These two roles are best fused via homeownership, where the occupant and the owner are one and the same, but can also be achieved through an effective partnership between two uneasy allies, the responsible tenant and the beneficent landlord.

[Readers who spend their professional careers associating with only one of the two species may instinctively recoil from my flattering adjectives for tenants and landlords … but trust me, I've met many from both species worthy of the appellation.  – Ed.]

Though seldom aware of it, residents come to rely on their landlord’s self-interest to assure a property is well maintained and secured, and when that collapses, because the landlord has negative equity, an essential function collapses with it.  Even a bad landlord is better than no landlord at all, as revealed in this New York Times article:

No landlord at home here – abandoned apartment, Los Angeles

As property owners run into trouble paying their mortgages, neighborhoods around New York City have been witnessing a disturbing consequence: Small and large apartment buildings are being abandoned in a state of disrepair, leaving tenants in limbo without basic services or even landlords.

When it comes to rental property, ‘abandonment’ happens in stages.  It could mean lack of reinvestment, lack of maintenance, decline in building services, or un-interest in collecting rent.

In the Bronx, anybody can walk into a four-story building on East 178th Street near the Cross-Bronx Expressway.  

Lack of security = major decline in building services.  (Also a building-code violation, and we’ll come back to that.)

Someone took the front door off the hinges and sold it for scrap metal.

A world without ownership: from Blade Runner

Lack of maintenance – in the extreme!

Drugs have been sold out of vacant apartments.

Drugs sold in here

As we’ve seen, long-vacant apartments are houses of crime.

“A nightmare,” said Cesar Guzman, 29, who lives in the building. “I can’t describe it as anything else.”

In Brooklyn, a woman at 76 Newport Street said the landlord disappeared this year and stopped collecting rent, so she stopped paying it.

Can’t blame her, can you?

A 19-year-old man in Apartment 1F has become the unofficial superintendent, sealing holes in ceilings with cardboard and duct tape.

I wonder if he’s paid anything by anybody for his work?

Who’s paying him, for doing what?

The two landlords of those buildings were in foreclosure in 2008 and 2009, and have earned a distinction of sorts: They own properties on the city housing agency’s annual list of the most poorly maintained apartment buildings in New York City. Of the 200 properties on the 2008 list, at least 77 were in foreclosure from January 2005 to October 2008, according to data from PropertyShark.com.

This shouldn’t be surprising.  Our whole judicial enforcement of building codes and warrants of habitability are premised on the collectibility of fines against the property – which in turn presumes that the property has to have a building equity.  When the owner’s equity is underwater, and the owner can disappear from any recourse, the building is simply abandoned … until the foreclosing lender shows up.

Rafael Cestero, the commissioner of the city housing agency, the Department of Housing Preservation and Development, told a City Council committee in April that a “small but significant proportion” of multifamily buildings bought in recent years may be overleveraged, meaning their debt is unsupportable by the income generated by the rents.

From the Enterprise Foundation to HPD: Rafe Cestero

Rafe’s a good guy who knows what he’s trying to accomplish. 

 “We are very concerned and continue to be concerned about the overall problem that Ocelot represents in the city, where you have multifamily buildings in some state of financial distress,” [Cestero] said. “If that financial distress is not corrected quickly, you will ultimately end up with physical distress.”

When the finance fails, the property fails.  It’s as simple as that.

The owner of the building on East 178th Street is a real estate investment company called Ocelot Capital Group.  

Here we are!

Ten of Ocelot’s 25 properties in the Bronx were placed on the city’s worst buildings list in 2007 and 2008, racking up 5,000 serious and immediately hazardous housing maintenance code violations.

Setting aside whether anybody else should have done something, this is an appalling record for the City of New York.  Five thousand ’serious and immediately hazardous’ conditions and the city hasn’t acted?

Mr. Cestero said … the conditions not only threatened tenants’ health and safety, but risked destabilizing entire blocks.

This is not a New York City apartment

Naturally. 

As a result, he said, the agency had become more aggressive in tracking the buildings, making emergency repairs and working with lenders to find new, responsible owners, as he said the agency was doing with Fannie Mae on the Ocelot buildings.

Tenants have grown frustrated waiting for repairs.

Why haven’t they been done?  Point to the slow grinding of the mills of justice:

Fannie Mae, which initiated foreclosure proceedings in March on the 18 Ocelot properties for which it had purchased loans –

As a lender, Fannie Mae (itself in conservatorship, as we know) has no authority to act.  Instead it can act only if it becomes the owner (through foreclosure) or gains court authority to appoint a receiver.

– is able to make repairs only in those buildings for which a court has appointed a receiver.  

As I’ve written about receivership:

As capital providers, they are circumscribed in their direct control over the property; often they have none. Instead they can gain control only through foreclosure, and depending on the jurisdiction and the asset, this can take many months – even longer if the sponsor elects to throw the mortgagor entity into bankruptcy.

The need for nearly-instant change in control runs smack up against the statutory and judicial deliberation in the change of legal ownership. How to solve this nasty problem?

Enter the receiver.

Does your receiver have good hands?

Receivership is a legal state, one conferred by a court in response to a filing by a creditor, usually the most senior lender.  The court takes judicial control of the property on the creditors’ behalf, in very much the same way courts administer bankruptcy. (Bankruptcy is the death of a financial entity the same way a testamentary estate is the death of a living entity.)

Receivership begins when the court enters an establishing order, and ends with the court’s discharge, usually but not always at a foreclosure that collapses the receivership estate, leaving only residual proceeds (if any) to be distributed. The receivership can be short (a few days, even hours) or extended (as in housing authorities that experience years and years of receivership).

Normally receivership is driven by the lender, but:

Residents at one run-down Ocelot building sued the landlord, persuading a judge to appoint an independent administrator to make repairs.

That was a good move, because the landlord has abdicated:

So much for my empire

Ocelot, which described itself in a 2007 Deutsche Bank press release as building a portfolio of subsidized, “income-producing real estate,” has become a kind of phantom.

In view of Ocelot’s flight, I can’t let pass another unindicated co-conspirator in this tragedy – New York City’s rent stabilization system.

Let’s conspire to hold rents down, shall we?

Many of these overleveraged buildings — the agency does not have precise numbers — are made up of low-income tenants in rent-regulated or subsidized apartments.  

Residents in rent-stabilized properties lose their economic leverage to compel enforcement of habitability and quality because (a) their rents are so far below market they have no good alternative for the same price they’re currently paying, and (b) new supply is choked off by the threat of future rent stabilization, which assures most new construction is occupant ownership (condos and co-ops) rather than rental.

International developers and private equity firms have borrowed hundreds of millions of dollars to buy buildings with rent-regulated units in the belief that they could profit by replacing existing residents with higher-paying ones, a trend tenant advocates call predatory equity.

A mite predatory, you say?

Even without speculating on these shadowy international financiers who’ve borrowed these uncounted centimillions, it’s easy enough to see how a rent-stabilized inventory coupled with a flood of cheap money would encourage the raising of a large private-equity investment fund.

Once the expected value play disappears, so does the speculative absentee-landlord investor:

 “The owner is making no attempt to repair the buildings or fix the violations or make them decent places to live,” said Mr. Cestero, whose agency has so far paid for roughly $850,000 in emergency repairs in the 25 buildings, money Ocelot now owes the city.

Nice of the Times to mention that the vanished owner is legally liable to the city for these repairs; the city can whistle for its money.

Rachel Arfa, Ocelot’s president, did not return phone calls seeking comment.

I wonder why.

“He’s away from his desk now …”

But an expose story without an owner to blame lacks essential minerals.  Leave is to the Times to find and impugn one:

[Continued tomorrow in Part 2.]

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A houser ’til his death: Dave Smith

This David Smith – who evidently answered to Dave, which I do not – was a long-time affordable housing advocate in New York City, home of Jane Jacobs as well as the birthplace of American apartment living and of the American co-op. 

David L. Smith, a leader in the nation’s co-operative housing movement and locally in the Penn South co-op, where he lived for 46 years and served as president and chairman for more than two decades, died Sat., March 14, at age 90.

As told by this affectionate obituary in The Villager, his life story reveals one of the great policy issues regarding affordable housing, and a subtle unpleasant truth about how it was answered.

A champion of affordable housing and active in civil liberties and the labor union movement over the years, Dave Smith was also a member of Community Board 4, which covers Chelsea and Clinton, in the 1980s. He was president of the District 2 School Board in 1968, when he supported community control of local schools.

Dave Smith, exhorting the residents to stay the course

But he often said his proudest achievement was his successful effort in 1986 to convince a majority of residents of the 2,820 apartments of Penn South to vote by a large margin to keep the complex a nonprofit co-op and reject the idea of allowing co-op shares to be sold at market rate.

Here’s the two-part policy issue: (1) should affordability be preserved, and (2) for whom?

Penn South, from the Empire State Building

By his actions Dave Smith, staunch laborite, answered those questions (1) Yes, and (2) for those who move in first.

Ironically, Penn South’s future was determined – as the twig is bent, so shall the tree lean – fifteen years earlier, when newly-married, newly-demobilized Navy man Dave Smith and his young bride moved into another celebrated urban-renewal property in Manhattan:

The Smiths lived in Stuyvesant Town, built as affordable housing for returning veterans by Metropolitan Life Insurance Co., from 1947 to 1962.

[No doubt he was irate at Met Life's 2006 sale of Stuy Town, and would taken not a little glee from the financial difficulties of its buyers. – Ed.]

They were leaders in the committee to integrate the segregated housing complex on the East Side between 14th and 23rd Sts., and they helped the first black family to move into Stuyvesant Town in 1949.

Good for them.

“Their lawyer was Paul O’Dwyer,” said Karen, referring to the late civil rights lawyer who was Mayor William O’Dwyer’s brother and later was elected City Council president in the 1960s.

Fighting for the right to wear acetate shirts: Paul O’Dwyer, 1970

Dave Smith later led a rent strike at Stuyvesant Town,

Depending on the facts, I might well have been on the other side of that issue from him.

which resulted in Met Life’s refusing the Smiths a lease,

… which sounds questionable unless Met Life found Dave Smith to have breached his lease by non-payment:

and prompted the family’s move in 1962 to the newly built Mutual Redevelopment Houses, Inc. — known familiarly as Penn South and financed by the government and the International Ladies Garment Workers Union.

“So look for/ the union label/”

Built in the early Sixties (and dedicated by President John F. Kennedy in 1962; see this nifty timeline),

The groundbreaking of Penn South: ask what you can do for your co-op

Penn South is today spectacularly well located, between Eighth and Ninth Avenues and 23rd through 27th Streets in Manhattan, a handful of blocks from Penn Station/ Madison Square Garden.

A cluster of buildings in Manhattan’s heart

From the beginning, Dave Smith focused on giving the residents control over their own destiny:

“He insisted that the co-operators should be on the board of directors — not just the union leaders,” said Karen Smith.

That was a watershed moment.  Any preferred benefit is susceptible to capture from those in power (thanks, Kofi Annan, for those rent-stabilized apartments), and Dave Smith insisted that residents have their own voice and control their own destiny. 

In 1972 when residents controlled the Penn South board [I deduce that it was a decade before the union's leaders were gradually rotated out – Ed.], Dave became board president, holding that post until 1992 when he was elected chairperson.

Because Dave Smith won that fight, and his later 1986 battle to keep Penn South limited-equity, co-op resale prices are controlled:

Q: What does it cost to purchase shares for an apartment in Penn South?

A: The current equity as of January 2009, is approximately $11,000 per room. Thus a 3.5 room apartment (one bedroom, kitchen, living room and foyer) would be approximately $38,500.  Equity may be financed up to 50% with an approved institutional lender taking a security interest. The Penn South Credit Union is an approved lender.  [Some other time, I'll post about credit unions, as this is an interesting one. – Ed..]

Where else could you buy a beautifully located 1-BR in Manhattan for $38,500?

Moreover, because it has rigorously preserved affordability, Penn South sets its rents on a cost-based method.  As a result, Penn South is a huge rent bargain:

Q: What is the maximum allowable income for an apartment in Penn South?

A:  Maximum allowable income for an apartment is calculated on a formula set by the New York City Department of Housing Preservation and Development (HPD). Annual (monthly x 12) carrying charges, plus a $55 allowance per room for painting and repairs, electricity charges, six percent of equity paid and six percent of Debenture Bonds (for cooperators who own bonds) are totaled and multiplied by eight to arrive at annual allowable income.

Since income < 8x rent, rent > 12.5% of income.  Considering that the affordability standard is 30% of income, this is an enormous bargain, and in fact income limited could be half as high as these and still meet the affordability targets. 

Applicants with income up to 50% above maximum allowable income will be eligible for an apartment but will be subject to a surcharge. Because equity varies by apartment and from year to year, we cannot estimate the actual equity to be paid until the time when you are called for a specific apartment.

By adhering to these deep affordability targets, the residents of Penn South eschewed substantial monetary benefit:

“It wasn’t a forgone conclusion,” his daughter Karen, a Manhattan Civil Court judge, told The Villager at an informal reception in her father’s memory in the Penn South community room on March 17.

The honorable Karen Smith

Nor was their choice without consequences, both demographic and personal:

“Some board of directors’ members wanted to go to market rate, but my dad went from door to door and asked people if the middle-income co-op, built with union and public funds and dedicated to working people, should become a place where only the well-to-do could live,” she said.

There’s the core issue – for whom was the co-op built, and for whom should it be maintained? 

It was a defining moment. 

Time to choose

The road not taken

The co-op again voted to reject the option of converting to market rate in 1991.

Had Penn South voted to decontrol prices, they would have gone sky-high.  The location is superb.  The original residents, as they sold their shares, would have reaped plenty of money to relocate elsewhere.  Many, many of them would have moved.  The co-op’s character would have changed entirely, and it would have been home to many more young professionals working on Manhattan.

The road taken

Instead of yuppie heaven, Penn South became – what?

Under his leadership, Penn South built a co-generation power plant in 1986 providing electric power, heating and cooling for the complex.

Again, good for them.  It’s not absolutely clear that this was a cost-effective use of their resources – do we really need a localized power plant? – but there’s no doubt that they had the resources because the rents were so low.

In 1991, when three-quarters of the 6,200 residents were over age 60 and the co-op was evolving into a naturally occurring retirement community, or NORC, Dave Smith was instrumental in generating public funding to provide services for seniors.

In case you’re wondering, Naturally Occurring Retirement Community (NORC), is a term to describe a phenomenon, and Penn South is an archetypal NORC:

Senior residents of Penn South had the weather on their side on Sun. Sept. 17 at the celebration of the 20th anniversary of the Penn South Program for Seniors on W. 26th St. between Eighth and Ninth Aves. Three generations of Penn South residents gathered for the event. Declared a NORC (naturally occurring retirement community) in 1986, the limited-equity co-op’s support service for seniors has been the model for others in the five boroughs.

2006: gathering of Penn South seniors

He was a member of the National Cooperative Business Association and was honored by the group in 1989. Inducted into the Co-op Hall of Fame in 1995, he had also earned the Co-operative Spirit Award in 1994. Last November, he earned the National Association of Housing Cooperatives’ Jerry Voorhis Award for lifelong contributions to co-operative housing.

Among Richard Nixon’s first targets for red-baiting demonization: Jerry Voorhis

He made a living most of his life as a salesman, first for Electrolux vacuum cleaners and then as an associate of a group that made and marketed molded shoes.

As a kid, I remember Electrolux.  They were the coolest vacuums imaginable, Space Age.

Send your dirt into space with an Electrolux

A major disappointment came in 1996 when co-operators voted down his proposal for an assisted-living residence on the site of the Penn South parking lot on 26th Street.

I promised a subtle unpleasant truth, and it is this: When you keep rents really low, people do not move, and gradually your property ages … as do its residents.  Nobody moves:

Q: When the waiting list was updated, I noticed that my number on the list went from a lower number to a higher number, that is, the number of applicants ahead of me on the list increased instead of decreased. How is that possible?

A:  In June of 2005, the housing company re-activated all those applicants who had been on “freeze” for 5 years or longer. These people were automatically reinstated on the waiting lists in their original order. Therefore, those applicants added in later years will fall back on the list as applicants are reactivated.

You have to read that a couple of times to get its full import.  The waiting list was so long that they froze it for people who had already been waiting five years or longer!  Talk about labor immobility.

I’ve previously posted about struldbrug buildings that outlive their utility yet cannot be demolished.  That is a NORC – not ‘naturally occurring,’ but rather a direct consequence of the interruption of turnover resulting from house-locking people into a fantastic rental bargain that they cannot monetize or transport with them.

Allow me to return to the original question; for whom are we building the co-op?  Dave Smith’s dream was an affordable community serving a broad constituency in lower Manhattan.  What he secured was an affordable community serving a narrow, and aging, community in lower Manhattan.  Instead of enabling a cohort of people to grow rich from the real estate, he helped enable a cohort of people to grow old in the same place. 

Either way, a few first movers gain most of the benefits, just in kind rather than in cash.

Two roads converged in a yellow wood

“And I took the one less invested in/

And that has made all the difference”

Thus both roads available to Dave Smith led to the enrichment of first movers.  His road, the road of preservation, at least keeps the apartments affordable, so that when age catches up with the first movers, the next movers will have an unbelievably affordable place to live. 

Neither, I suspect, is the vision Dave Smith had that wintry day in 1962.

Age eventually caught up with Dave Smith too:

Two years later at the age of 80 he lost re-election as chairperson of Penn South’s board of directors.

He took it manfully:

When he lost the election as chairperson, he told The Villager that he was disappointed, but pledged to serve co-operators whenever they needed him.

“When co-operators need someone to represent them before city and state agencies, I’ll be there for them,” he said.

Honoring an original Southie
David L. Smith, former president of the Penn South co-op complex in Chelsea and a longtime leader in the co-op housing movement, gets a handshake from Congressmember Anthony Weiner as Smith’s daughter, Judge Karen Smith, looks on. Smith received the National Association of Housing Cooperative’s Jerry Voorhis Memorial Award for his lifetime contribution to cooperative housing at a gala reception with more than 100 people attending on Sun., Nov. 16. Smith, one of the original residents of Penn South in 1962, had just celebrated his 90th birthday two days earlier [November 14, 2008 – Ed.]. He spoke with pride of Penn South residents’ vote 10 years ago to remain a limited equity co-op.

David L. Smith and Anthony Weiner

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