A new problem on the rise.
Okay, so it’s not only Annie Leibovitz who’s having the financial meltdown. TheRealDeal.com recently reported that landlords are not having a grand deal out of this whole mess they fondly call “recession”. If you think this is about the rise in vacancies, think again.
The report presents another problem in the form of increased costs for utilities. It states, “… As the ranks of New York City’s jobless increase, and more people downsize apartments or take on roommates to deal with the economic downturn, they also send their landlords’ utility and maintenance costs skyrocketing in rental buildings… Besides taking on additional roommates, as more New Yorkers stay home during the day because they are jobless (the city’s unemployment rate hit 9 percent in May, according to State Labor Department statistics), they are inevitably using more utilities… While higher vacancy rates in rental buildings — another byproduct of rising unemployment — do ultimately translate into lower utility costs, there are still maintenance expenses associated with every apartment that turns over.”
And why haven’t we thought about this lately? There are too many issues that are more pressing than this. But, I can’t help but post my reactions.
First, aren’t tenants supposed to shoulder their own utility costs? If so, this would reduce the landlords’ supposed “burden”.
Second, for those not under rent control, haven’t they realized yet that the forces of the property cycle are at work and they have no choice but to keep their rents at market levels and bear the additional costs?
Finally, if they thought of ways on how to overcharge their tenants five years ago, can’t they hatch an idea on to how to use their maintenance budget wisely? In other words, we’re implying that it’s part of their job to shoulder the costs much as their tenants would do if they send a notice of rent increase. Clearly, they don’t have a choice on this one.