By Konrad Putzier
Lessening New York’s notorious housing shortage might be easier than we think — at least according to noted real estate attorney Stephen Meister. “The rent is too damn high because the laws are too damn stupid,” he told a packed conference room at last week’s B’nai Brith luncheon at the Cornell Club.
Instead of blaming complex, global market forces, he found a series of laws responsible for the fact that office vacancy rates in Manhattan are six times higher than residential vacancy rates. Changing these laws could go a long way towards solving the housing shortage, Meister said.
Rent protection topped Meister’s list of stupid laws. “It’s good for those tenants who win the lottery but not for all other tenants looking for space,” he argued.
According to Meister, laws encouraging developers to make 20 percent of new units affordable “sound great in concept” but only ends up making apartments more expensive for the remaining 80 percent.
The attorney called succession laws, which allow people to inherit rent-protected housing from their parents, “particularly insidious” because they can block new development. He cited the example of the Zeckendorf Organization’s 15 Central Park West, which was delayed by a rent-protected tenant who eventually had to be bought out for $17 million.
Equally bad for housing, according to Meister, are historic districts. He blamed them for causing “rampant nimbyism”, allowing residents to abuse laws and block development out of selfishness.
“Historic districts make any neighbor a de-facto attorney general,” Meister lamented, decrying the fact that they have grown in number from 64 to 110 under Mayor Michael Bloomberg.
In order to solve New York’s housing crisis, Meister called for an end to both historic districts and rent-protected succession laws. This would open up new sites for development and allow rent-protected units to return to the free market once the resident moves out. Moreover, he suggested free-market tenants should organize to build a counterweight to powerful rent-protected tenant groups.
A partner with law firm Meister Seelig & Fein, Meister has made a name by fighting high-profile real estate cases in New York City. He is currently representing former investors in the Empire State Building in one of several suits against Peter and Anthony Malkin.
The lawsuits claim the Malkins neglected their fiduciary duty by taking the famous tower public last October rather than selling it to private bidders.