The level of quality is irrelevant as the landlord can renovate and ask for as much as $3000 per month if he were to ocnvert it to a two bedroom. 450sf sounds too small to do this, but your calculations don't really make sense. Most railroad style units are from 500sf and upwards. The floor plan would help, if even just hand sketched with GIRDER to GIRDER hard measurements, as opposed to livable/usable space which it sounds like you have offered.
$150K is a minimum and perhaps he could command way more. Prime Chelsea location is somewhat vague as well. Is this a block from subway access? How well maintained is the building itself? Are there laundry facilities in the building? Is there any private outdoor space? Are pets allowed?
I believe in a rent control situation, the tenant DOES NOT have the right to pass a unit onto any children if they have not lived in the unit before 1971. http://www.housingnyc.com/html/resources/faq/rentstab.html

I hope that this helps you. You need to really find out a lot more details for a specific figure in mind.

Sat Mar 29 2008, 22:45

Sandy,

What his position is worth is pretty much a net present value problem. The value is what the unit would rent for uncontrolled, minus the current “rent-controlled” rent, discounted at some percentage over his expected life.

Example: Market rent is $2000. So, he's netting $1650 a month in savings. At 5 percent, for 20 years, his position is worth about $250K. I.e., in a perfect world with perfect information, that's about what the landlord would be willing to pay him to leave so he could get that additional ~$1650 in rent.

If he can make more than 5% with his monthly savings, or live longer (or die sooner) then the equation changes.

Hope this helps.

-John

Wed Mar 26 2008, 21:25

Call NYC Rent Control for answers.

Wed Mar 26 2008, 21:03