New York City's war on housing could hinge on a political battle being waged this week. We break down the stakes of the City of Yes. Plus, we have an important update on housing discrimination, and the City Department of Investigation outlined the widespread corruption inside nonprofits providing homeless services. We'll explain why everyone should care. Let's start Housing New York. 

[THEME]

“We need 800,000 units to meet the demand today… What we have right now in the United States and what we have right now in New York City is almost a crisis of absurdity… We have to figure out a way to get these vacant units back online in a reasonable way that sets a rent that's affordable for most people… We will end America's housing shortage by building 3 million new homes and rentals…” 

[INTRO]

Welcome to Housing New York, I'm your host Kenny Burgos. We're taping this on Monday, October 21st, 2024. We are two weeks away from election day. Be sure to make sure you are registered to vote, make a plan to vote because early voting actually begins this Saturday here in New York city. And let me tell you folks, as a former state lawmaker, I know we're focused on the presidential election, but when you get down to it, it's your state lawmakers, it's your city officials.

Those are who decide the policies that shape the housing landscape in our city and state. And you have to get out and turn out to vote because at the same time we're voting for president, we're voting for our state lawmakers, our congressional representatives, and six ballot proposals. If you're not familiar with the Housing New York podcast, we recap the top stories from the past week and put them in perspective. We do this to help foster a conversation about how we can fix housing in New York so it is better for both renters and our housing providers. Let's get to the news.

[THE NEWS]

[City of Yes]

We are kicking off this podcast again with a discussion about the City of Yes for Housing Opportunity. That's because the public hearings are taking place this week and what we are seeing is rare in city politics. This proposal has garnered a coalition of support from a lot of unions, business community, and pro housing coalitions, and they are squaring off against many community-based groups that have much of the real power in the city over local elected officials. 

For those unaware, City of Yes is a small zoning change to the entire city with the idea that we could build a little bit more housing everywhere. It's the first city-wide zoning change that has been proposed since 1961.

This proposal, while ambitious compared to a lack of anything getting done for 40-plus years, is basically treading water on addressing the city's housing needs. As you all know, NYAA supports this proposal. We don't think it does enough to address our housing shortage, but we think it must pass for the sake of the city's future. If it fails to pass or is watered down by the City Council to render it useless, then the city has little to no hope of fixing its larger housing issues, or ever creating abundant housing.

[State audit finds Human Rights Division mishandled housing discrimination complaints]

We have to talk about housing discrimination for a minute. Last week, the state comptroller's office released the findings of an audit of the state division of human rights.

Specifically, it looked at housing discrimination cases and found that the DHR had failed to keep track of complaints and a lack of timeliness and appropriate communication with the people who have filed the complaint has eroded public trust in the agency. 

This agency exists to make sure that housing providers are not discriminating against prospective tenants or brokers are not discriminating against potential homebuyers. It's an important part of the housing ecosystem in New York, and if it isn't working, the public trust in government declines; then it makes it harder to implement better housing policy. 

So what does this mean? Well, in government, the squeaky wheel gets the oil. This audit could trigger action from the legislature or the governor. We could see an increased budget for the Division of Human Rights, or just an increased focus on processing housing discrimination claims. 

We take this very seriously at NYAA. We're going to be stepping up our efforts to make sure all members are up to date with the laws and understand best practices to comply with them. 

[Scaffolding Sheds & Local Law 11]

Let's talk about scaffolding. So on Friday of last week, we posted a video on social media talking about scaffolding sheds and the regulations around them in New York City. And I can tell you, when we shot this video, it wasn't very difficult to find a scaffold shed within the first 50 feet. 

We wanted to inform people that our organization, the New York Apartment Association, is working with the government to try and figure out a better way to do things in the city.

A couple of points of note: Local Law 11, or the Facade Law, is likely the strictest law in the world when it comes to inspecting and fixing building facades. The city wants buildings to be safe – we do as well, but at some point the costs and blight from scaffolding has become excessive when balanced with the safety that comes with it.

We know elected officials want to fix this issue. We also know that there are some in government who think simply increasing fines or penalties for building owners will somehow magically make these sheds get taken down faster. That is absolutely not going to work. It's just going to drive up the cost of operating housing. 

So we are already working with the city government and the city council on solutions. We think we can find a good balance to make sure that these buildings are inspected and safe, and when absolutely necessary, the scaffolding can still be put up. But in many instances, it does not have to be. We're hopeful that we will find that balance. 

[Housing Vouchers would ease our Homeless Crisis]

We wanted to take a little bit of time today to talk about the homeless crisis in the city. Specifically, we wanted to inform our viewers of the Department of Investigation report that detailed nepotism and huge executive salaries for the 51 nonprofits who work in the homeless services industry in New York city. For a sense of scale, the city gave these nonprofits $4 billion this last fiscal year. The DOI report outlines – and these are their words – corruption, fraud and waste in the system, and made 32 recommendations on how to clean up this system. 

We're outraged by this. Our members are outraged by this. And frankly, the general public should be outraged by this. Not just because taxpayer money is being wasted, but we're outraged because there is clear data and proven methods to reduce homelessness if the government just invested more money in creating and preserving permanent housing for homeless people. 

It's important that New Yorkers understand that there is another path. Instead of our tax dollars paying nonprofits to set up shelters that are generally horrible places to live, we could create a better housing policy that incentivizes investment in the creation of more housing and better use of the current housing stock, and then provide homeless people with vouchers so they can live in nice, safe homes. 

Just to give you another perspective, in Houston, Texas, they're operating with a homes first approach. We're providing homeless individuals with vouchers and generally getting them into nice, safe homes pretty quickly. This is the reason why places like Houston, Texas are regularly championed by homeless advocates as the progressive gold standard for dealing with this vulnerable community. It is clear we are failing on this issue and we need to change our approach. 

[California Proposition 33]

To wrap up this week's podcast, we want to take a quick look at what's happening in California. Currently, there is a ballot proposal to expand rent control. It's the third time in a decade that an AIDS non profit has raised tens of millions of dollars to get a referendum vote on the ballot.

If passed, it would repeal a law that was put in place back in 1990. The law is called Costa Hawkins, and it does several things, but mainly, it makes vacancy control of apartments illegal in California. The reason we bring this up is because when it comes to rent control schemes, there are really two different worlds.

Rent control without vacancy control, which basically means that when a tenant moves out of an apartment, the owner can renovate it and then rent it out again at whatever rent they can get.  And then there is rent control with vacancy control, which means that the apartment rent cannot be raised on turnover even if it needs significant renovations or investment.

As our listeners know, New York City has the strictest vacancy control scheme in the country, which is why more than 10, 000 apartments are sitting empty right now, and the owners have no pathway to bring them back online.  Earlier this year, reforms to the individual apartment improvements were made, and the Division of Housing and Community Renewal released some updated guidance on those last week. We don't anticipate these changes being helpful to bring the apartments in need of significant renovations back online, so our view is that New York City still has the strongest vacancy control scheme in the country.

So we are watching what happens in California in two weeks closely. If the measure, called Proposition 33, passes, then you will see local communities out there start to implement New York City-style rent stabilization. And then we will see more legal challenges arguing that it is unconstitutional. If election night wasn't exciting enough for you already, you can keep an eye out for the verdict on Proposition 33. Though, we should let you know that we probably won't have a final result on that until several days later. And here at NYAA, we will remain laser focused at bringing these thousands of vacant units back online in New York City.

[OUTRO]

And that's it for this week's episode. Be sure to follow us on all social media handles, at HousingNY. That's for Instagram, for X. We're producing tons of content, videos, and we are formulating conversations that are vital in our effort to move toward better housing policy. 

The Housing New York podcast is a proud product of the New York Apartment Association. We appreciate your feedback and you can leave us a comment on Substack or wherever you listen to this podcast. And remember, good housing policy starts a good conversation.