What to Do About Bad Landlords

The West Side Rag just published a familiar tale: Chetrid Group, the owner of several big apartment buildings, had just been indicted for harassing rent-regulated tenants. Per District Attorney Alvin Bragg:

Meyer Chetrit waged a campaign of harassment against two rent-regulated tenants in their 70s in hopes they would move out, and the building could be sold. … From winters without heat and unrepaired roofs causing leaks and ceiling collapses, these New Yorkers were forced to live in uninhabitable conditions.

If history is any guide, Chetrid will pay its fines and continue making tenants’ lives miserable. The New York City Public Advocate, Jumaane Williams, publishes a list of 100 Worst Landlords in NYC; Chetrid isn’t even on the list. And tenant-abusing landlords don’t include those who have abandoned their property altogether, such as the crumbling boarded up tax-delinquent townhouse near me at 231 West 74^th Street.

When I saw the Chetrid article, I emailed a friend of mine who is an advisor to now mayor-elect Zohran Mamdani: “Please tell Mamdani that the city should force these kinds of incompetent landlords to sell.” He replied, “Thank you. Will do.”

What makes forced sales a good solution for bad landlords? As a former Upper West Side landlord myself, I can explain.

In 1986, when I married my late husband, I also married a pair of small, run-down, rent-regulated buildings. We lived in one of the apartments. While my husband taught at City College, I found myself an accidental landlord. I fortunately had the skills to make small repairs, including plumbing and electrical. A big part of the job was answering calls from tenants, many of whom were elderly. One woman was having trouble climbing the stairs to her tiny fourth-floor walk-up. We moved her down to a slightly larger ground-floor apartment. The tenants were our neighbors; mistreating them was inconceivable.

However, the roof leaked, the pipes dripped, the paint peeled, weeds had overgrown the garden, and the fuses kept blowing as the ancient wiring could not support the demands of modern appliances. When I arrived, there was even an ailanthus tree growing in the debris-choked roof gutter! The rents did not cover the expenses and mortgage payments. What to do? Rent regulations apply only to tenants for whom an apartment is their primary address. At that time, rent regulation stopped for apartments over $2,000 a month. We borrowed money and began a program of renovating apartments after tenants left or died, and then renting them short-term furnished, often to actors in town for a play. We replaced the roof, plumbing, and electrical. Over the next 25 years, we transformed the buildings from a crumbling dump to a beautiful, profitable, well-maintained property—a big improvement for the few remaining rent-regulated tenants. (We were of course contributing to the gentrification of the Upper West Side. That would be far more difficult under new regulations adopted in 2019, which eliminate vacancy and high rent decontrol, and limit landlords’ ability to raise rents after making improvements.,)

In short, managing apartment buildings, even with regulated rent, does not require mistreating tenants or failing to make essential repairs. But how did the property get in such bad shape to begin with?

My husband bought the property with his first wife in 1964, when the Upper West Side was still a run-down neighborhood. For seven years until her death in 1985, she suffered from emphysema, leaving him overwhelmed with the expense and demands of her care. But he loved those buildings; there was no way I could have persuaded him to sell.

Personal tragedies may explain some negligent landlords. But many are absentees, retired to Florida, too old, too sick, or too rich to care. A classic study of landlords in Newark, New Jersey found that following white flight, the most run-down properties belonged to former white residents, while the best-managed properties belonged to recent Black resident purchasers. Other absentees may have bought during a speculative boom and can’t bear to sell at a loss. Some are permanently absent: a survey of downtown San Franciso found that the most neglected properties belonged to trusts and estates.

Mismanaged corporations like Chetrid are in effect absentees. The employees may be ill-trained or have more pressing concerns. Tenants’ complaints get lost in the bureaucracy. Contractors get paid for repairs they fail to do or do badly—which also happens in public housing.

Apart from mismanaged or abandoned buildings, the city is riddled with neglected vacant lots, some 25,000 of them. In wealthier areas, most belong to LLCs. For 50 years, a Greek shipping company apparently forgot it owned an empty prime Upper West Side lot running between Central Park West and Broadway.

Some landlords may indeed be economically rational, and criminal, in harassing rent-controlled tenants—as did President Donald Trump’s notorious father, Fred Trump. Others may be rational in withholding minor repairs because they plan to sell soon, or make major renovations, or even replace the building. Landlords in a declining neighborhood may have inadequate cash flow, but in that case, the city may have failed to lower property assessments.

Based on Fred Trump, it’s easy to assume that all bad landlords are engaged in rational profit-maximizing behavior. The 100 Worst Landlords Watchlist gives the lie to this assumption. The 2024 Watchlist buildings averaged per unit 1.7 “immediately hazardous” violations like blocked firedoors and 3.0 merely “hazardous” violations like faulty exit signs compared to 0.1 and 0.2 across the whole city. Violations on that scale are gross, value-destroying negligence. Punishment won’t work on broke, incapacitated, or incompetent absentee landlords.

Owning property is a public trust, especially in a big city. The best response to bad landlords—elderly Floridians or New York crooks—may be to force them to sell. A city takeover of management makes no sense given the huge backlog of repairs to public housing. The sales should be “arm’s length”—that is, to an unrelated buyer—and buyers themselves should not have a record of negligence. If possible, the buyers of small buildings should intend to live there. Even the threat of a forced sale might incentivize a few semi-rational landlords to clean up their act.

Apart from liberating tenants from abusive or negligent landlords, the forced sale of mismanaged properties could quickly and dramatically increase the city’s housing supply. Empty apartments would return to the market, while boarded up buildings would be rehabilitated. If forced sales were applied to vacant lots, new owners would start a building boom. A real estate friend of mine hates Mamdani’s proposed rent freeze on regulated apartments—but he loves the idea of liberating property from the clutches of bad owners. Mamdani may have some unusual allies in his quest to increase housing supply and lower rents.