The legal question, pending before the 2d Circuit Court of Appeals is whether the lease is an asset like a car that can be part of the bankruptcy estate or whether it's like a welfare benefit (which would be exempt).
The widow’s lawyers argue that a rent-stabilized lease is a public assistance benefit, just like Social Security or disability payments, and should be exempt from the bankruptcy estate. Treating it like an asset, the lawyers said in court documents, undermines the intent of rent-stabilization laws in New York designed to protect tenants deemed in need of assistance with housing....You have to read pretty far into the linked NYT article to see that the landlord in this case is not trying to throw the woman out. His offer allows her to stay for the rest of her life. He does, however, want to block her 50-year-old son (who lives with her) from having "succession rights" to the place. Nevertheless, the article ends with a quote from the old woman:
“It’s an unfair money-grab,” said David B. Shaev, the New York state chairman of the National Association of Consumer Bankruptcy Attorneys. “To remove this foundation, this safety net, it’s unconscionable.”
“I’m afraid to find a white paper on my door,” she said with her head down, tearing up as she tugged at the edges of her plastic-covered chair.Any tears for the young people who are trying to live in NYC, looking for apartments and stuck entering a housing market skewed by the 2.2 million people in rent-stabilized places? No, because Mary Veronica Santiago is a specific person, crying here for you, and you're not supposed to notice that her real concern is for a middle-aged man who'd like to live out his years in one of the cheap apartments that make other apartments so insanely expensive in NYC. And no one cries for the creditors, owed $23,000. They're just credit card companies.
It’s an unfair money-grab... it’s unconscionable....
Why is a benefit that comes at the expense of a private landlord equated with "a public assistance benefit, just like Social Security or disability payments"? I know welfare benefits are paid for out of money that comes, via taxation, from private citizens, but that is pooled money, collected according to whatever tax policies the legislatures have seen fit to adopt. Government may create valuable rights for tenants under rent-stabilization, but the value is extracted from one individual or entity — a particular landlord. Isn't it strange to call the landlord's loss of income a public assistance benefit?
ADDED: Reason's Matt Welch is also talking about this: Like me, he highlights the son's interest. ("That's right — in New York City, you can put your rent-stabilized apartment in your will, and hand it off to the next generation of $703-a-month payers.")