Arbitration & Mediation

Negotiating Power: NYC Tenants Organize Resistance to Private Equity Bullies

By Victoria Pynchon

Today's New York Times (Questions of Rent Tactics by Private Equity) reports that investment firms have been purchasing New York City rental properties for the avowed purpose of "turning over 20 percent to 30 percent of the units, five times the typical vacancy rate," to upgrade the rentals up and out of rent regulation, generating tens of millions of dollars of income for the investors.    

Tenants are complaining that the investment firms' tactics to "turn over" those units (i.e., evict low-income residents from their homes) are not only ruthless, but fraudulent as well.  See the full article here.

So what's the little guy to do when BigBusiness decides to set aside ethics to maximize profit?  What individuals have always done when their survival is threatened.  Organize.  According to John Medina, author of Brain Rules, there's more than one way to be the fittest survivor and collaboration has always been our species' strategy.  

"Suppose you are not the biggest person on the block," Medina writes,

but you have thousands of years to become one.  What do you do?  If you are an animal, the most straightforward approach is becoming physically bigger, like the alpha male in a dog pack, with selection favoring muscle and bone.  But there is another way to double your biomass.  It's not by creating a body, but by creating an ally.  If you could establish cooperative agreements with some of your neighbors, you could double your power even if you did not personally double your strength. 

Trying to fight off a woolly mammoth?  Alone, and the fight might look like Bambi vs. Godzilla.  Two or three of you, however, coordinating your behaviors and establishing the concept of 'teamwork,' and you present a formidable challenge:  You can figure out how to compel the mammoth to tumble over a cliff.  There is ample evidence that his is exactly what we did

Locating and deploying likely allies is not only good sense when the individual has no bargaining power -- like NYC's low-income tenants -- it's also an extremely savvy move for business negotiators.  As Lax and Sebenius explain in their ground-breaking book 3-D Negotiation

[w]here one-dimensional negotiators mainly focus on actions at the table, [the] third dimension, “setup,” extends to actions away from the table that shape and re-shape the situation to advantage. In deal after deal we’ve seen the same result: once the parties and issues are fixed, and once the negotiating table has otherwise been set, much of the game has already been played.

Therefore, before even showing up at the conference room, 3-D Negotiators take the initiative. They act away from the table to set up the most promising possible situation, ready for tactical interplay. This means ensuring that the right parties have been approached, in the right sequence, to deal with the right issues, that engage the right set of interests, at the right table or tables, at the right time, under the right expectations, and facing the right consequences of walking away if there is no deal.

If the setup at the table isn’t promising, this calls for moves to re-set it more favorably. As we’ll show you, a superior setup plus the right tactics can yield remarkable results that would be unattainable by purely tactical means, however skillful.

See the 3-D Negotiation strategy summarized in the online introduction here.

You don't need to grow larger, richer, stronger or even smarter to gain a bargaining advantage.  If you find the right allies, before you know it, you'll be roasting that woolly mammoth over charcoal briquettes in your own backyard.   

Full post as published by Settle It Now Negotiation Blog on May 09, 2008 (boomark / email).