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I Tracked Down My Anonymous Landlord... Here's What Happened
Inside the shadowy legal world of housing, where landlords conceal their identities to exploit tenants and keep rent high.
By Chai Dingari, director of The Class Room series at More Perfect Union
My wife and I were recently kicked out of our apartment after trying to negotiate a whopping 25% rent increase with our anonymous landlord… and then we made a video about it.
Starting out, we didn’t even have a name to go off of. We paid rent to an LLC with just the building’s address on it, which is becoming a common practice. Why? It’s right there in the name — limited liability company. Landlords use LLCs to shield themselves from liability for not paying taxes or letting properties fall into disrepair.
And LLCs let landlords conceal their identities, so you don’t know who’s evicting you or raising your rent. Instead of communicating with a person, you’re answering to “I Love My Landlord LLC.”
You can watch our piece below to see all the twists and turns of our journey below.
In the video, we highlighted two bills in the New York state legislature that would protect renters from situations like the one I went through.
The LLC Transparency Act, a historic bill that shines a light into the shadowy, corrupt world of corporate anonymity, has passed the New York State Senate and has a good chance of passing the Assembly. If you live in New York, call the Speaker of the Assembly to ensure this bill gets to the floor.
A second housing bill we talked about, Good Cause, is still being debated. If you live in New York, take action here: http://hj4a.org/TakeAction
Our video seems to have resonated with a lot of renters…and landlords! They’ve been debating the nature of transparency and rent stabilization in our comment sections.
So I thought I’d respond to a few comments and talk about some of the nuances it’s hard to get to in a 13-minute video.
Part 1 — Debating LLC transparency
The first part of our video focuses on anonymous landlords.
I’ve lived in New York for 15 years and in the past, I’ve always met or spoken directly to my landlord. But in this building, I just paid an LLC with the building’s address on it and the only person I met or spoke to was a middleman from Compass Realty.
Many of our viewers shared similar experiences with LLC landlords. But a select few came to their defense. I was struck by this comment on our video urging, “Take a minute and educate your viewers about the purpose of an LLC. There’s nothing sinister about them.”
Our Senior Writer Sean Morrow got obsessed with LLCs when we were covering Dr. Oz’s doomed Senate race and kept coming up against dozens of completely anonymous donors who secretly influenced elections by giving through LLCs. Here’s some educational background information he gathered:
LLCs were invented in the 1970s through the influence of a few oil barons who wanted the freedom from taxes of certain existing corporate structures, and the freedom from personal accountability of others. LLC regulations were left up to states, meaning states with lax laws like Wyoming and Delaware became havens for thousands of anonymized businesses.
LLCs have been used by the world’s ultra-wealthy to avoid taxes and shield themselves from personal responsibility. International oligarchs like Oleg Derispaka hold NYC real estate investments worth millions of dollars despite being under federal sanction…because of LLCs! (We made a whole video about that you should check out as well)
But a few commenters had misunderstandings about the scope of the LLC Transparency Act, and were specifically concerned about what it would mean for privacy.
Anonymous landlords are a relatively new phenomenon. In 1991, 92% of the rental properties in the United States were owned by individual investors whose identities were a matter of public record. Today LLCs and partnerships own 40% of all rental units in America.
With this new law, LLCs in New York would simply be required to provide the same information as every other type of corporation—the name of the owner(s) and a business address. The law doesn’t ban LLCs outright or prevent landlords from using them to protect their finances from business risks. Personal privacy is taken into consideration as well.
The bill’s lead sponsor is Assemblymember Emily Gallagher. Her chief of staff Andrew Epstein told me, “If someone has a compelling privacy claim, they can apply for a waiver which, if granted, would assign an anonymous unique ID to be published instead of their name. That would still allow the public to cross-reference ownership of multiple companies, without revealing the owner(s) name(s).”
And lastly, let’s get real here about this fear of transparency.
Because, on the flip side, tenants have no choice in the matter. Asm. Gallagher made this great point in our conversation that we weren’t able to fit into the video:
“Not only is [applying for a rental] incredibly time-consuming, but it's also really in some ways humiliating because you have to provide so much information and capital to prove that you are going to be a good tenant. But we require nothing to prove that the landlord is going to be a good landlord. This is truly a one-sided relationship.”
Tenants have to submit themselves to credit checks, hand over bank account info, and provide numerous references (even from previous landlords!), while their landlords get to decide whether or not they can have a pet and other key parts of your life.
And in exchange, what do tenants get? Potentially just an address and a name like “I Love Your Landlord LLC” to send their rent money to (h/t Sarah Jaffe for that 100% real LLC name).
Part 2 — Debating Good Cause
But let’s get back to my 25% rent increase.
Before this apartment, I had lived in a rent-stabilized apartment, so my typical experience with renewing my lease was always pretty painless. This is the first time I’ve lived in what’s called a “market rate” apartment, with basically no regulations at all.
New York’s Good Cause eviction bill isn’t a rent stabilization bill per se, but it would prevent a tenant from being removed from their home due to an unreasonable rent increase.
Contrary to some of our commenters’ misinterpretations, the bill doesn’t strip landlords of the ability to keep up with their own rising costs and property taxes:
Ritti Singh from Housing Justice For All told me:
“If a landlord has increased costs — whether from taxes, repairs, or increased insurance, they can still raise the rent over 3% [or 1.5x the Consumer Price Index, whichever is higher] they just have to demonstrate the increased expenses and the rent increase will go through! Tenants have to open our books all the time to get housing — giving our credit scores, giving pay stubs, and bank statements. It's only fair that if a landlord wants to hike up the rent, they should have to justify it too!”
Other comments (some from landlords) expressed the notion that such legislation would bind them to “bad tenants,” with no recourse for the property owner.
The Good Cause bill still allows for tenants to be evicted.
The bill’s lead sponsor, Julia Salazar put it this way:
Evictions are legal proceedings. This is true under current law. Good Cause would not change this fact… Nuisance, criminal acts, etc also constitute Good Cause to evict in this bill.
Nonpayment of rent is also still a “good cause” for landlords to evict!
Both these bills are not radical when it comes to the way we expect other corporate entities in our country to behave.
Part 3 — Why we made this video
Lastly, I want to point out that the overwhelming majority of the comments on our video were positive and insightful! We’re glad this piece is finding an audience and sparking conversation.
Housing is a human right. Corporate consolidation and unfair legal loopholes have shifted the power too far away from working class tenants and into the hands of a few bad actors.
As our Motion Designer Gerald Lane pointed out, his landlord who lives above him actually undercharges him for rent, and when he needs repairs Gerald and his sister hold off from informing their landlord because he comes upstairs extremely quickly to address their concerns.
There was a time when housing was a contract between a human and another human. The LLC Transparency Act and Good Cause legislation would simply help us make that dynamic equitable again.
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