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flapjack212 t1_jbk7tre wrote

Reply to comment by [deleted] in Newport Rental Crazy Price Increase 20-25%+ by recklessmax80

i just need to point out the obvious that while taxes increased 32% that number is not directly comparable to your 25% rent increase....

said simply, it is highly unlikely that a rent increase of 25% will not cover a tax increase of 32%. however i'm sure the property tax issue is indeed one of the major contributors to the rent increase

to OP: unfortunately there are only 2 options -- negotiate (and win), or move out, a lot of folks are stuck in the same situation because the increases have been so high

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[deleted] t1_jbk9cyi wrote

[deleted]

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micmaher99 t1_jbkdyne wrote

I work in commercial real estate. This is not true. Debt service coverage ratios on major commercial real estate never let a borrower pay 100% of the NOI in interest.

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flapjack212 t1_jbkajzw wrote

in your own example, if rent = mortgage + tax + maintenance and tax increases by 32% to balance the equation the rent side does not need to go up by 32%

how much the rent side needs to go up depends on the size of the tax component vs the mortgage + maintenance, which is again not directly related to each other. however you can make some directional guesses, in any case leading you to the conclusion that 25% increase in rent likely more than covers 32% increase in taxes.

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iron64 t1_jbkhqnb wrote

The property tax increases this year were unprecedented and contributed a lot to what you are seeing. Yes, there will always be landlords looking to bring their units in-line or just under the market rate for the brand new units in the city. But a lot of families that have owned for a long time (since the 90’s), who had their properties reevaluated in 2019 (probably had their taxes tripled then), and then got hit with the 30% increase in October are forced to either sell or increase rent to continue living here.

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pixel_of_moral_decay t1_jbkk3xo wrote

It is when you realize minimum wage climbs each year in NJ (for another 2 years?), and unionization across the river made labor way more expensive here.

Newport buildings have concierge and porters maintaining them. Their wages had to go up about 20% if they kept up with the region. A bit more if it was someone they really wanted to retain.

And wages are likely ~40% of the operating budget for any luxury building that age.

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recklessmax80 OP t1_jbm4252 wrote

In all honesty i am very friendly with the handyman and porters as i have lived here for few years and their wages have not gone up 20% or 40% from what they tell me. Infact they laid off staff during the pandemic and have since not hired the same number of them back to service the building . Even if some hourly inceases are factored in it still does not justify the monthly price increases of 20-25%

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pixel_of_moral_decay t1_jbmc2r6 wrote

They aren’t telling you the full story. Year over year it’s about 20% from 2021 to 2022 from the budget I’ve seen for door staff in my building. And still short staffed because you make way more if you take a job across the river, and there’s a ton of openings there.

You should do the right/ethical thing and suggest they job hunt then, because they can do way better in this economy.

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