A provision in the new rent regulation law requires that 51 percent of existing tenants agree to buy their apartments before a building can be converted into a condo or a co-op, according to the WSJ. State legislators who favor the anti-conversion language say it was meant to kill off a practice they believe harms the living conditions lower-income residents when renovations are being done to upgrade the units.
- Absurdity explained… Conversions have a positive effect! Co-op and condo boards invest in improving their buildings to keep it to the new standard of living. These conversions also provide a new source of wealth to renters who bought their apartments before a huge run-up in prices, or received cash payments to move out.
- Immediate fallout: The new restrictions will help condo developers by cutting off a source of new supply, and lead to price increases.