“The rent stabilized building bubble will persist as long as there are greater fools to cash out bad bets. If Albany bails out this market now, with bad data and before the market has started to price buildings properly, they risk turning taxpayers into the greatest fools of all.”

Adi Talwar

Apartments in the Bronx.

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As the largest lender on New York’s rent stabilized apartment buildings, many analysts and commentators have blamed the collapse of New York Community Bank’s stock over the past few months in part on the Housing Stability and Tenant Protection Act of 2019 (the “HTSPA”), which tightened rent regulations on these buildings that serve as the bedrock of New York’s affordable housing stock.

As a landlord and broker who has been participating in and analyzing the market for rent stabilized buildings for 15 years, I believe that this tempting narrative misdiagnoses the underlying problem and that the market for rent stabilized buildings was in a bubble before the HSTPA, to some degree still is, and the distress we’re seeing was inevitable.

I am speaking out because, as City Limits recently reported, lawmakers in Albany are considering a number of measures that would effectively bail-out rent stabilized landlords and lenders who made bad decisions—and I am concerned that if they do so without taking the time to collect and analyze high quality data and let the market start pricing these buildings properly, they risk stoking the dysfunction that got us into this situation in the first place, all on the public’s dime. 

Back in the boom times of the market for rent stabilized buildings there were two prevailing investment strategies. The first was to buy rent stabilized buildings in neighborhoods that were relatively rich and deregulate units in order to capture the neighborhood’s market rents, which were far higher than regulated rents. The second strategy was to buy rent stabilized buildings in relatively poor neighborhoods where market rents weren’t high enough to reach the deregulatory threshold, but where one could still use various means allowed under the pre-HSTPA regime to jack up rents.

The regulatory regime that allowed for deregulating units and aggressively boosting rents in excess of the annual allowances from the Rent Guidelines Board began in 1994, and by the time the HSTPA passed in 2019, the market had practically run out of buildings to execute the first strategy on, leaving the vast majority of the city’s current stock of rent stabilized buildings/units in relatively poor neighborhoods.

Consequently, most distressed rent stabilized buildings are also in these relatively low-income neighborhoods in which the second strategy was executed, so it’s worth asking—did the investments in these buildings that are now going sour even make investment sense to begin with, before the HSTPA tightened rent regulations?

I think to any real estate investor looking at these deals objectively, without ideological blinders on or a compensation structure tied to fees rather than returns, the answer is clearly no, these investments never made sense. The investment yields at which rent stabilized buildings were being purchased and financed were relatively similar regardless of either the potential for increased income from deregulation or the credit quality of their tenants. Rent Stabilized buildings in Mott Haven in the Bronx (median household income of $24,500) were being valued as if they had similar income growth potential and credit risk as rent stabilized buildings in Murray Hill in Manhattan (median household income of $124,740.)

Most new multifamily buildings in relatively poor neighborhoods require subsidies to be able to operate—so why should all these ancient, inefficient, unsubsidized buildings with similar tenants be priced as if they exist in some parallel economic universe?

Given the age and tenant credit quality of these distressed rent stabilized buildings, many of them will have to be bailed out by taxpayers in one form or another eventually in order to avoid falling into serious disrepair. Different parts of the real estate industry are pushing different proposals that, despite their representations to the contrary, would have public money prop up these buildings either directly or indirectly.

One proposal would have the regulated rents on vacant units reset to U.S. Department of Housing and Urban Development’s standards and paid by vouchers in exchange for renovations, which could sometimes result in the public subsidizing higher rents than what the market would otherwise bear. Another proposal would increase the ability of landlords to recapture renovation costs via rent increases, which, if not designed properly, could risk incentivizing, among other things, over-improvement of units to the point of their rents only being affordable to tenants via increased public assistance.

The tenant movement, for its part, has proposed, among other things, a whole new public authority that, in addition to building new social housing, would be able to buy distressed buildings like these using public funding.

While all of these potential solutions have some merit, they are being considered by lawmakers without high-quality data on market, building, or unit-level distress. Different housing agencies can’t even agree on how many vacant rent stabilized apartments there are. The court system, which is a venue for a lot of the building-level distress, theoretically has lots of useful data on what has befallen these buildings but is notoriously opaque.

In addition to having a responsibility to deal with the other more urgent and fundamental housing items on their legislative agenda, given that only so much government money is going to be appropriated for housing, lawmakers also have a responsibility to make sure taxpayers get as much bang for our buck as possible by investing it on an informed basis and not on above-market terms.

The rent stabilized building bubble will persist as long as there are greater fools to cash out bad bets. If Albany bails out this market now, with bad data and before the market has started to price buildings properly, they risk turning taxpayers into the greatest fools of all.

Ben Carlos Thypin is the CEO of Quantierra.

In Italian, andiamo means “let’s go!”

That’s pretty much what I said to a group of girlfriends on a recent weeknight — all of whom gleefully signed up for a night full of pasta, red wine and other Italian delights at the new St. Paul version of longtime suburban favorite Andiamo.

Even though I haven’t visited a certain wildly popular Italian-American chain restaurant in years, Andiamo, in the former Buffalo Wild Wings spot, definitely gives off “When you’re here, you’re family” vibes, right down to the cheesy Italian music piped into the dining room.

(The restaurant also offers all-you-can-eat salad and soup during the lunch hour for a very reasonable $12. And yes, they have breadsticks.)

Happily, though, the food here is fresh, scratch-made, perfect for sharing and affordable.

Our group of five started with a chopped salad, and we immediately appreciated the care with which the components were prepared — all uniformly chopped, fresh and lightly dressed with a tasty vinaigrette.

Dinner comes with a bread basket, too, which features fresh, crusty Tuscan bread or, you guessed it, breadsticks.

The smattering of other dishes we tried were all satisfying and well-executed, from a lovely, creamy spaghetti carbonara, studded with crisp, smoky bacon pieces and peas to tender short ribs swimming in a bright tomato sauce.

In between, there was a decadent lasagna bolognese that disappeared so fast I barely got a bite, a pizza topped with pears, prosciutto and gorgonzola and chicken Andiamo, which consisted of tender breast meat seared and topped with a lemon butter sauce, prosciutto, capers and artichokes.

The space is large and clean, with an attractive, square bar front and center, and there are a few Italian wines on their list along with a full bar. Basically, it’s a great place for families and groups, and while the food isn’t breaking any new ground, it is as comforting as a warm hug.

Small Bites are first glances — not intended as definitive reviews — of new or changed restaurants.

Andiamo

Where: 80 N. Snelling Ave., St. Paul

Contact: 651-289-2002; andiamomn.com

Prices: Appetizers, $8.50-$16; soups, $5-$7; salads, $10-$13; pastas, $12-$20; sandwiches, $14.50-$15.50; pizzas, $11-$17; desserts, $6-$15

Good to know: Ample on-site parking; gluten-free pasta available, vegetarian options

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President Donald Trump recently scored a victory with the Supreme Court: The justices agreed to hear his case that his former role as president grants him immunity in the face of federal charges. Among the central questions in this criminal case: What does it mean for the president to “take Care that the Laws be faithfully executed,” as the Constitution requires?

Trump and his lawyers have argued that this constitutional clause grants him near-total immunity from judicial oversight, as opposed to being an accountability measure meant to hold the president responsible for enforcing the laws. While commentators on both sides have focused on what it means to “faithfully execute” the laws, few consider as closely the clause’s other phrase: the exhortation to “take care.”

A common reading of that phrase by legal scholars is that it simply means to “ensure,” as in to “ensure that the Laws be faithfully executed.” But that reading shortchanges centuries of political thought about a question that hangs over Trump’s prosecution, and the outcome of this year’s election: What does it mean for public officials to have a duty of care?

The public trust

That question was taken seriously in ancient Athens, where a 403 BC decree instructed one of the traditional governing councils, known as the Council of the Areopagus, to “Take caring charge of the laws, so that the office holders may employ the laws that have been passed.” The similarity to what’s in the Constitution is striking: Both speak of caring and link it to the laws’ execution.

Yet the Athenian instruction more explicitly references “caring” in the sense of being a caretaker or guardian. This suggests that the officials’ duty is not simply to ensure the laws are executed, but also to safeguard their spirit. To execute without caring, indifferent to the fate of the overall democratic system, is to fail to execute properly at all.

In the 18th century American context, such ideas also had resonance, as shown in debates over the Constitution’s ratification. Commentators in the government and media spoke of federal officeholders’ “public trust,” their role as “servants” or “confidential guardians” of the people, and of the president as the “supreme conservator of the laws.” Even the president’s constitutionally mandated oath to”preserve, protect and defend the Constitution” invokes a notion of guardianship, an idea of rule that goes well beyond the idea that the president is merely the nation’s chief executive (or faithful executor).

‘Keep watch over the laws’

To safeguard the spirit of the laws, one has to know the laws’ purpose (in Greek, their telos ). That telos is broadly understood in ancient Greek texts to be the good of the people. Accordingly, officials were described as stewards and guardians — in the poetry of Pindar, the comedies of Aristophanes and the oratory of Isocrates, among the works of other authors. These portrayals related to the roles of household stewards and legal guardians of children. As with legal guardians today, officials’ duty was to exercise their powers to care for the good of others.

The ancient Athenian philosopher Plato identified caring as a fundamental dimension of statecraft in his text “Statesman.” He argued in “Laws” that a good constitution requires a body similar to the Council of the Areopagus that can “keep watch over the laws.” Even in his dialogue “Republic,” rather than arguing for untrammeled rule by philosophers as many have thought, he proposed that a group of senior guardians should educate, select and supervise officeholders (and that the guardians should themselves be tested and selected by their predecessors).

This is constitutional rule, as suggested by the dialogue’s title in Greek ( Politeia, literally meaning “Constitution”), in which no individual official is immune to scrutiny as to whether they are taking proper care.

The good of the people

What might the U.S. learn from these ancient ideas? For starters, we might recognize that our own founding documents suggest that the telos of our democracy is, as it was for the Greeks, the good of the people.

Imagine, then, if we established our own group of senior guardians to weigh in on the suitability of presidential candidates to perform the role’s essential caring function. The group could include living past presidents, who know from experience what the role requires, and, if necessary to make up a quorum, other qualified retired public officials.

Just as the American Bar Association rates federal judicial nominees as “well qualified,” “qualified” or “not qualified,” this body could rate major party presidential candidates on the basis of transparent, preselected and nonpartisan criteria. Although such a council would have no official role in the electoral process, its rating would signal the deliberative judgment of a uniquely expert group of individuals.

Moreover, in screening potential members for its own ranks, a council of ex-presidents could send further messages about the conduct of past executives. Just as Plato’s guardians were tested and selected by other guardians, so too could this group self-police, determining membership based on factors including performance before, in and after office in terms of exhibiting appropriate care — or a lack thereof — for the health of the democratic process and constitutional system. Exclusion from membership might bear on the National Archives’ support for a presidential library and other honors conventionally bestowed on past presidents.

Fundamental to ruling

To be sure, such a council would be subject to the full range of human foibles and moral failures — at least a dozen U.S. presidents, after all, were or had been slaveholders — and voters may well disregard their judgments. And it perhaps sounds like a flight of fancy to propose a new functional cooperative body in this fractious era of American governance.

On the other hand, the collective experience of prior officeholders may be exactly what we need to safeguard the president’s constitutional duty to take due care. Their ratings would remind all Americans of a lesson that the ancient Greeks recognized: that caring is fundamental to ruling.

Jane Manners is an assistant professor at the Beasley School of Law of Temple University. Melissa Lane is a professor of politics at Princeton and author of the book “Of Rule and Office: Plato’s Ideas of the Political.” They wrote this column for the Los Angeles Times.

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For just the fifth time in its franchise history, the Timberwolves are a 50-win team.

Minnesota reached the milestone Wednesday at Target Center, downing the 12-win Pistons 106-91. It wasn’t impressive nor dominant, as Minnesota slept-walked through the first 2½ quarters.

Still, the Wolves got the win. And doing that 50-plus times over the course of an 82-game NBA season is a mark of true consistency. And Wednesday was another reminder of where that consistency stems from.

It was a night where the Wolves were sluggish at times and the offense stalled on occasion. For instance, Detroit went on an 11-0 run that allowed the Pistons to gain the lead in a second quarter in which the Wolves hit just four of their first 15 shots.

The offense was never truly great. Minnesota shot just 31% from beyond the arc. But the remedy for a poor shooting night can be as simple as hitting the glass. Minnesota did that relentlessly.

Or, more accurately, Rudy Gobert did that relentlessly.

The big man grabbed five offensive rebounds that directly resulted in 13 second-chance points. Minnesota finished with 19 second-chance points to Detroit’s two, which proved to be the difference.

Because even when Minnesota struggles, Gobert’s size and physicality on the interior gives the Wolves a high baseline that prevents disasters from occurring.

It didn’t matter that Anthony Edwards scored just nine points on 4-for-11 shooting, or that Detroit guard Cade Cunningham went off for 32 points. Gobert is an eraser of many issues.

He was again dominant defensively, serving as the primary reason Detroit shot just 40% from the field, including just 17 for 33 in the paint.

Gobert finished with 11 points and 14 rebounds, while going 5 for 5 from the field.

Naz Reid and Jaden McDaniels provided additional offensive support. McDaniels continued his recent scoring resurgence with 20 points on the strength of three 3-pointers, while Reid had 21 points and 10 rebounds as he continues to shine in his starting role.

Kyle Anderson added 14 points and five assists in just 23 minutes off the bench.

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