The city of, I guess so? Mayor Adams zoning reform plan is now set to pass with several amendments by the council. As we predicted, it will cut down on the housing created. We'll tell you what it means.  Plus, we recap our conversation about vacant rent stabilized apartments with Fox 5's Bianca Peters. And we discuss the New York Times ongoing series of reports about the city's housing crunch.

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 thousands of people with rent vouchers and no place to use them. Housing needs to be addressed from literally every angle, and what that means is we're all going to have to compromise…”

[INTRO]

Hello friends, housing supporters. I'm Kenny Bergos, CEO of the New York Apartment Association. This is Housing New York, our weekly podcast, discussing all the stories and developments that impact housing policy in this great state. We're taping this on Monday, November 25th. It's Thanksgiving this week. At the end of this podcast, we're going to tell you about the food pantry that several members of NAYA have been supporting for years, and explain why everyone should support their local food pantries.

Now it's time to get to the news. 

[01:20: City of Yes]

We start the podcast off with the biggest housing story happening, arguably the biggest housing story of the year. We're talking about the City of Yes for Housing Opportunity. 

This proposal was put forth by the mayor's team more than a year ago. They met with community leaders, educated the public, and fought public relations battles around it all year. And the deadline for passing, or rejecting, this upzoning of the city is now only a few weeks away. 

Last week, a deal was announced that the City Council would pass an amended version of the plan in exchange for a commitment of $5 billion in funding for infrastructure projects. The amendments knocked down the potential housing estimates from 109,000 to closer to 80,000 units, roughly a 25% haircut. 

The biggest reason for the reduction was the decision to protect parking minimums in many parts of the city – as we predicted in last week's podcast. We refer to parking minimums as government forced overbuilding of unwanted parking spots. This is what it is. By adding this expensive mandate that provides no benefit to anyone, you kill projects.

And that's what many parts of the city were able to do – is carve themselves out of having any responsibility for addressing high rents, homelessness, or the shrinking population of the city.  We supported ‘City of Yes.’ We support this proposal because it is far better than doing nothing. 

But let's be real here. We've been in a housing emergency for 60 years, and I don't know many emergencies that go on for that long. So we need to do something fast. As long as we're in a housing emergency, we will have high rents and declining quality of housing, and we shouldn't be patting ourselves on the back for taking baby steps. It's time to take this issue seriously and be bold in proposing solutions.  

[02:58: Vacant Apartments]

Let's talk about vacant rent stabilized apartments now. Earlier today, I was a live guest on FOX5 at noon. I spoke with Bianca Peters about the thousands of empty rent stabilized apartments that need significant renovations in order to get back on the market.

We explained that in most cases, these units have rent below operating costs. That shouldn't surprise anyone. Let me throw out some government stats for you. RGB data says the median rent for apartments in older rent-stabilized buildings outside of the core of Manhattan is about $1,325. This is calculated by taking the number from 2022, the last year available, and adjusting for RGB rent increases.

So what's the cost to run an older apartment building? Well for NYCHA, it's $1,400 a month, but they don't have to pay any property taxes or make mortgage payments. In these rent stabilized buildings, roughly $300 of every rent check goes to the government as taxes. And the vast majority of the buildings have mortgages that suck up at least another $300 per rent check.

That leaves the property owner about $700, or half of what NYCHA spends, just to maintain the unit. The data is telling us that roughly 350,000 rent stabilized apartments – likely more – have rents that don't cover operating costs. 

There should be a base minimum rent to stabilize these units and the buildings. If the tenant can't pay, they should get a voucher to cover that cost. That would lead to better quality housing for all renters. This is a conversation we think is worth having.  

[04:21: New J-51 tax abatement program]

Talking tax breaks now: Next week, the City Council is set to approve the new J-51 tax abatement program. There was a lot of confusion around this bill due to some language that was unclear, but let us break down what it does. 

First, any upgrades to your building done between June 2022 and extending to June 2026 would be eligible. Second, buildings with more than half of their rent roll below about $2,000 are eligible – so most rent stabilized buildings would be eligible. Next, the reimbursement is only 70% of the money spent on the work.

The HPD cost schedule, which sets the reimbursement, is still way out of date. They haven't adjusted for inflation for like a decade, so in reality, the reimbursement is around half of what you spent on the improvement.

If the goal is to incentivize 100-year-old buildings to make improvements that will prevent deterioration, this program is a failure. It's a bad deal. But if owners have already made the investment, it could provide some relief to their bottom lines. 

What we really need is a program that housing providers are going to want to use. A true incentive. I drive a Tesla, mostly because the government gave me a bunch of incentives to switch to an electric vehicle. I'm happy that I'm also helping to reduce greenhouse emissions, but the government subsidy nudged me to get me there. 

We need a tax break for building improvements that really works for building owners. One that they would be excited to take advantage of, would lead to better housing for tenants.  

[05:43: NYT ‘Housing Crunch’ series]

We wanted to tell you about a series of articles The New York Times has been publishing on the housing crunch in New York City.

The focus has been on the complexities around creating more housing, including affordable housing. The fact that The New York Times has taken a vested interest in these issues is important. Their reporting still moves lawmakers. 

In this case, the reporting highlights a lot of the things we've been telling elected officials for a while now. How regulation delays and sometimes outright stops the building of new housing. How onerous regulations drive up costs and rents, and how the largest source of affordable housing in New York City remains older rent-stabilized buildings that are also taxed higher than any other housing in the city. 

We know all the flaws and failures of the current housing policy in the city. What we need is a large and constant discussion about those failures – the type of dialogue that elected officials cannot ignore. We do some of that on our own through social media and engaging with the press, but large series like this one from The New York Times also help force the conversation. 

We know some people don't want these issues talked about because they don't want the truth to come out about housing policy failures in New York, but we think transparency is the only way we move forward. 

[06:50: Giving back to our neighbors]

We're going to end the podcast this week telling you about our turkey giveaway on Saturday. For years, several members of NYAA have been funding a food bank in Inwood – paying the rent, and every year handing out hundreds of turkeys to the local community. 

This is important every year, but it's becoming more important. The Gothamist recently wrote that more New Yorkers rely on food pantries than before the pandemic. This even includes healthy people with jobs, according to the reporting. 

I was there Saturday, [and] we appreciate City Councilman Shaun Abreu, who stopped by as well. And we handed out 500 turkeys. We're all New Yorkers here, and this kind of involvement bridges the gap between owners and tenants. It's a great way for us to get out there and meet our neighbors, but also have discussions on affordability and housing.  

As long as I'm head of NYAA, we will be involved in supporting communities where our members own buildings. Our goal is to build communities, and providing safe, affordable housing is part of that. 

To this end, we want to cut operating costs for buildings so rents don't have to increase as fast. We want to make sure the quality of housing improves in these communities. That's how we'll make this city more affordable. 

[OUTRO]

That's the end of the podcast. You can follow us @housingny on most social media channels or also on BlueSky, which continues to grow in popularity: @housing.bsky.social. On behalf of everyone here at the New York apartment association, I want to wish you a happy Thanksgiving. 

I'm thankful to all of you who listen to this podcast each week. It's a proud product of the New York Apartment Association. Please keep sending us feedback on our website. You've been listening to Housing New York with Kenny Burgos, and remember, good housing policy starts with good conversation.