Posted on Wednesday, December 1, 2010
In New York City real estate, there are few titles more thankless than guarantor. But they are needed by many.
People who do not make enough to afford their paycheck-devouring rents must find a wealthy relative, a benevolent family friend or perhaps a kidnapped and hypnotized multimillionaire to supply personal financial information and assume responsibility for their leases.
Rachel Wagner, Emily Coit and Taylor Jewell, recent college graduates and childhood friends from Portland, Ore., discovered that finding such a guardian angel was almost as hard as finding an apartment.
They had lined up a $3,400-a-month apartment on the Upper East Side, but could not meet the standard Manhattan landlord requirement that their combined salaries equal 40 times the monthly rent, or $136,000. So they would need a guarantor making 70 times the rent, $238,000.
Many landlords prefer guarantors who live nearby, because it is much harder to pursue judgments from afar, said Jamie Heiberger, a lawyer who represents landlords.
But in August, the landlord for the apartment the young women were trying to rent changed the building’s policy requiring the guarantor to live in the region. The women made awkward calls to relatives and friends. Ms. Coit was going to ask an uncle from Buffalo who is in his 70s. But she ultimately did not, because his income would not qualify. She asked a family friend from Connecticut, who declined because he felt uncomfortable providing his tax returns, bank statements and Social Security number. Ms. Jewell’s uncle, who has real estate investments here, also did not qualify under the income requirements.
Blair Brandt, whose referral company, the Next Step Realty, helped these friends find their broker and guided them through the process, said many graduates arriving in Manhattan had been facing this problem.
Ms. Heiberger said landlords were being extra careful because the recession had made the problem of unpaid rent so widespread.
“There can be the hedge fund guy that’s out of a job, or it could be the college student that can’t find a job,” she said.
The friends’ parents reached an agreement with the landlord by putting several months’ rent in escrow; the friends recently moved in.
But they still find the requirement strange. Ms. Jewell’s father, Steve Jewell, who is a landlord in Portland, does not require his renters to have guarantors.
“It’s far beyond certainly anything that would be done in Portland,” Mr. Jewell said. “But we understand it’s a different market.”
While it sometimes seems as if there is an endless stream of New Yorkers spending their Wall Street bonuses and inheritances on Classic Six co-ops and glassy condominiums, there are, of course, plenty of New Yorkers who want more than anything to buy, but simply cannot. As they wait for their fortunes to turn, some of them spruce up the homes in which they are, at least for now, stuck.
After Linda La Porte and Anthony Torres married in August 2009, they settled into an apartment they rented from a friend in Astoria, Queens, while they saved for a down payment.
But in June, their friend had to move back into his apartment. Then Mr. Torres received orders from the Air Force Reserve to head to flight school, leaving Ms. La Porte to move their belongings into a smaller, $1,900-a-month apartment nearby.
To distract herself from missing her husband, Ms. La Porte attended a workshop held by the decorator Jill Vegas to pick up some ideas. She replaced the red curtains she had hastily put up, chose a photograph of a geisha to place over the couch and bought turquoise and cream throw pillows. She kept her husband updated with photographs.
“It kind of helps me focus on something else,” Ms. La Porte said. “We didn’t expect him to be gone so long. That’s been very, very hard to deal with.”
Ms. Vegas said she had seen uncertainty among many of the 150 students who attended her decorating classes this fall, with many “wanting to snuggle in to what they have.”
One of her students, Virginia Foxton, wants to buy in the suburbs with her husband, Mark, and their 11-month-old daughter, Avery. But they had to wait, because they could not sell the condo they own in San Francisco, where they used to live; it had been tied up in a lawsuit, with the developer going bankrupt.
In October, they moved to a new rental in Williamsburg, Brooklyn, from the Upper West Side and tried to make the small space feel new by removing some clutter. They stored furniture and a barbecue and donated baby toys and a car seat to an expectant friend. Since the lawsuit has just settled, they hope to buy within a year.
“It’s definitely a transitional place, but it feels new,” Ms. Foxton said of the new apartment. “The focus is eventually on living in a space that we own.”
By CHRISTINE HAUGHNEY New York Times