More on Alleged Property Shark Amtrak
A few days ago, I posted a blog here on Amtrak raising the rent on backyard lots neighboring Amtrak’s railroad lines in New York. The rent in some cases went up by 100,000% (!) according to the website of Congressman Joseph Crowley.
Professor Bruckner posed the relevant question of whether the now hotly contested leases are truly new leases or the renegotiation of existing ones. I’ve been trying to find out, but not having seen the actual letter from Amtrak (yet), I’ve dug through news reports and website of legislators. This is the upshot as best as I can find out right now: It looks like Amtrak is upping the price on _existing_ leases after having had very low prices for years. See, e.g., these statements: “For decades, Amtrak has leased the property underneath the trusses to homeowners for a nominal fee which releases the agency from the burden of maintaining the premises. Residents were given a 30-day notice to accept an unconscionable annual rent increase – in some cases as much as 100,000 percent or tens of thousands of dollars” and “[i]n a letter addressed to homeowners, Amtrak argues that a review of the lease and the premises it covers, indicates the lease is substantially undervalued. For some, the rent will go up from $25 annually to over $26,000 annually. Failure to approve the new rental amount would result in the termination of the lease 30 days from the notice.”
To me, that does indeed seem if not outright unconscionable, then certainly in violation of reasonable contractual expectations and the contractual terms what appears to be an already existing contract.
As mentioned, Amtrak does have a good argument in its prices having been exceptionally low for decades, but perhaps market prices should be introduced over time as the lessees get replaced over time with the existing leases somehow being grandfathered in? Granted, the turnover in the NYC real estate market may not be high in the case of lucrative deals, but on the other hand, nobody lives in any home forever. Underlying this story does seem to be the fact that Amtrak got upset not so much about the low rents per se, but the fact that some renters were making profits off them.