A look below the surface in gentrifying Crown Heights published Jan 15 2013

I can't claim credit for the writing, but I am glad you liked it.

I believe everyone often fails.

This leads me to empathize with the goals of those who are judging MySpace.

However, this is a classic case in which someone can agree with thier goals, yet disagree with both the methods used to achieve said goals AND their focus.

Sometimes.

Eastbloc-

Mrs. Whynot stated she enjoyed this quote the best:

But as for the ownership of MySpace NYC specifically, Sharon elaborated: “They’re not regular Jews who wear black. They wear the jeans, the designer labels.”

She loved it because this seemed to her to be such a Crown Heights-centric statement.

It is as if Sharon was unaware that most Jews in NYC don't wear black and/or live in the largely Lubavitch area of Crown Heights.

So. Precious.

And now, from a source I do not have permission to quote:

It's interesting that De Zayas is one of the first merchants quoted in this article, I know some local CH merchants who see him as one of the pushy gentrifiers who can't be bothered to make nice with the older merchants on that block.

P.S. The website that profiled Franklin Avenue, is running several articles on gentrification this week. Some of the neighborhoods profiled are experiencing the opposite: Disinvestment.

http://us5.campaign-archive2.com/?u=75fd15d26b96a36801073cfe1&id=9844876cb9&e=98209e660d

via the above Brownstoner link:

deano wrote: Being on and around Franklin since 2010, and living here since 2011 as another one "displaced" by the changes in Carroll Gardens, it appears to me that much of this attention and angst is caused not just by the changes going on here (not too different from the process going on in many parts of brooklyn) but to a larger extent by the astonishing *speed* of these changes, very evident in my two years around here, which is making it more exciting/disruptive/painful for the various folk involved.

The narrative.ly piece doesnt mention two really big catalysts for this incredible speed: first, the Jewish Hospital conversion was a huge "moment" in this process, creating an almost instant community of new faces (and new money) within its own walls. It's so much easier for new faces to venture to an unknown neighborhood knowing that an equally new and like-minded community would be coming with them.

Second, and more relevant to today: while MySpace may be no more callous than most hungry realtors, their business model is. It's a freakishly powerful force in pushing up the average rents and changing the character of the neighbourhood. Never a fee for renters - that's the trick. They'll take a fee from the landlord instead, and their pitch to win owners promises higher rent for the space to offset the fee. It's a canny model for them and clearly it works; but now we are all seeing how it impacts the community; renters (especially those with less experience and/or savings) are drawn to the area by the shiny allure of "NO FEE" and commit to a higher monthly rent than they could otherwise. Maybe they can sustain it, maybe they cant, but without the 'anchor' of having a fee to amortize, they are more likely to leave at the end of the year ... and higher turnovers mean more money for brokers. The landlord will pay again because MySpace (having driven up the comps nearby) will promise even higher rents for the new lease, and to help keep open the faucet of new renters they'll encourage landlords to put 3 or even 4 bedrooms into 700-800sf apartments. Landlords end up losing out from turnover and renters with less incentive to be good tenants, renters lose out to the higher monthlies. MySpace wins from both sides, and then wins again as their own growing inventory is appraised higher and higher from the spiralling rents.

So if we want to ease up on this breathless pace, then landlords - dont rent property through MySpace. Renters - dont use MySpace if you can avoid it; save up and pay the upfront fees for a better lease, or use Craigslist and rent direct from an owner.

xlizellx-

I won't comment on Elcorno Martin's mental health, but I will state I think you are right about everything else.

First, I am going to define how I use some terms, then I'll jabber...

Slumlord: A landlord which operates a building/"slum" which is in disrepair. The tenants usually lack "power".

Flipper: A landlord which quickly purges the current residents of a building in order to refill the units with tenants who pay higher rents. Upgrades are often, but not always, done between tenants.

Market Rate Landlord: A landlord who has market rate tenants. The tenants usually have "power".

The first building the article discussed was 724 Franklin. This building seems like it was a slum, and operated by a slumlord for decades. A tenant reports that the owner sold it because no one was paying rent, and the cash flow was lousy. The new owners, MySpace, quickly flipped it by offering cash to the tenants.

Once all of the tenants accepted a payout, MySpace renovated the apartments so it could attract people able and willing to pay market rate rents. I think it is safe to state that in the "mind" of MySpace, renovating the apartments for the long term tenants who were paying (or not paying...) very low rents was never an option.

Compared to the prior landlord, MySpace operated the building while it was in a state of disrepair for a relatively brief period of time. Hence, MySpace is a Flipper and Market Rate Landlord, but not a Slumlord. With me?

Now, let's move on to the second building profiled: 577 St. Johns. This building has also reportedly been a slum for decades. However, if the two tenants profiled are typical, cash flow might not be bad. One pays $1033, the other $1800.

This may mean that Elcorno Martin (a landlord who maintains an office at 790 Franklin and owns 577 St. Johns along with several other local buildings), is doing ok financially and won't be willing to take the "fast cash" that MySpace offers.

If I am right about Mr. Martin having no urge to sell to MySpace, this seems to mean that his tenants (regardless of how much rent they are being charged) are stuck in a crappy apartment and paying their rent for quite sometime. If history is a guide, DOB and the Public Advocate will continue to call him a "Worst Landlord", but do little else.

Meanwhile, MySpace is able to earn solid $ (see really good analysis by Brownstoner commenter Deano, above) and stay off the Worst Landlord list because it owns buildings in disrepair for a very brief period of time. Smart, comparatively wealthy, prospective tenants check such lists.

By making all of the units in its buildings [whether they own, broker or manage] market rate, MySpace also fulfills the preferences of people who wish to live near people of similar incomes. In turn, this makes "their" units even more attractive than units in Mr. Martin's mixed-income, poorly maintained buildings.

I think you'll need to have a google account to access the above Cease and Desist Letter from MySpace's attorney to one of the leaders of the CH Assembly members quoted in the article.

Readers interested in getting a copy of the letter can PM me, and I'll email it to them.

Yes. Despite the fact that I think the author did a good job, if I ran a business or a community association (I.E. CHCA) I would not have granted an inteview either.

The risks from participating would simply outweigh the potential gains.

Of course, NOT participating has risks too.

...some naive readers use the fact someone declined an interview as evidence of people having "something to hide".

bkrest-

Yes, as you point out, many landlords have concluded that they do not have to consider rent regulations.

In light of the level of enforcement of the regulations by HCR, many landlords choose to simply ignore the rules.

Others are a little more clever and increase the amount legally able to be charged by colluding with contractors who create false, inflated invoices.

This is especially the case in areas (such as Western CH) where there is a large pool of prospective tenants willing to pay above the set rates.

In such cases:

-The landlord has little incentive to tell HCR about the actual rate charged, or inform the tenant that the apartment is subject to rent stabilization.

-The new tenant has a diminished incentive to inform HCR about the actual rate charged, or care whether the apartment is subject to rent stabilization.

-The former tenant may have "voluntarily" accepted a payment to leave and signed a document waiving their rights to the apartment.

...leading the residential mix of the neighborhood to change at a quicker rate than the authors of rent regulations intended.

http://www.ag.ny.gov/sites/default/files/pdfs/publications/Tenant_Rights_2011.pdf

http://www.actorsfund.org/others/pdfs/NY/Tenants_Rights_Organizations_New_York.pdf