The state of rent-stabilized housing is not great. That's the takeaway from the Office of Rent Administration's annual report. We break it down. And we will preview the State of the City Address coming up this week. As well as the State of the State address coming up next week. It's a stately podcast today. 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]

Happy New Year. We're excited to be back talking about housing with all of our friends and listeners. I hope you are all refreshed from the time off during the holidays. I'm sure you all reflected on how we can create more housing in New York like I did. 

If you're listening to us for the first time, I'm Kenny Burgos, the CEO of the New York Apartment Association. Every week I discuss the news and stories impacting housing policy, and we try to make things a little better. 

We're taping this on Monday, January 6th. Let's get to the news. 

[01:16] [ORA Annual Report]

We kick off the pod talking about rent-stabilized housing. The Office of Rent Administration put out their annual report promptly on January 1st. This report is required by law and outlines various metrics about rent-stabilized housing, but it's not the easiest thing to read. So we're gonna break it down for you and highlight some of the key findings.

First, there were roughly 920,000 apartments registered on time this year. We know from previous years that there are about 970,000 stabilized apartments [overall], and like previous years, roughly 50,000 apartments missed a deadline. Because there are strict fines for missing the deadline now, we suspect most of these stragglers quickly resolved this issue, but it likely has not been reflected in this report. 

This is important because this top-line number has been used by some to advance narratives about vacant units or owners intentionally failing to register apartments. The reality is that most professional owners register on time and have been doing so for decades. 

The report also has some other telling information. We calculate that the average cost of operating a rent-stabilized apartment is about $1,450. This is slightly less than what NYCHA spends on similar buildings, and they don't pay property taxes. Using that number, the report shows that 366,000 apartments have rents that don't cover operating costs. That's about 40% of all rent-stabilized apartments. 

I was recently in California talking to people there about rent control, and they were shocked that this was legal. In San Francisco, if an apartment has a rent below operating costs, an owner can petition the rent board for an adjustment. 

We did an Instagram video about this. Here's a quick clip:

(VIDEO: Operating costs: SF vs. NY)

We will drop the full video in the caption. 

The point is that you can't have a rent control scheme where a significant portion of the rents don't cover operating costs. This leads to building deterioration. We're going to be talking about this going forward. 

[03:18] [Preview: State of the City & State of the State]

Sticking with our state lead theme, we wanted to preview the State of the State Address and the State of the City Address, which will be delivered by New York City Mayor Eric Adams on Thursday, January 9th. 

These speeches are important because they set the agenda for budget negotiations. Any housing policy proposals or additional funding for things like vouchers would be mentioned in these speeches. Typically, if there is a big and bold proposal, it will get leaked to the news media a few days before, so we're keeping our eyes peeled.

Unfortunately, we don't anticipate any big and bold proposals from the mayor or the governor in their speeches. But we know both care about housing and believe that increasing housing supply is vital to the future of New York. 

We need another big step forward. 

If we're not making progress towards addressing that crisis every single year, the crisis will get worse every year. So we need the governor and the mayor to lead on housing again. And we really need the state Legislature and the City Council to follow and work to get something significant done in 2025. 

And when we say significant, let's put that into context. The City of Yes for Housing Opportunity was a great success in 2024, but anyone suggesting that that was a significant win for housing abundance is just lying to themselves. It was a small step focused only on zoning. Significant reform has to tackle the bigger hurdles to abundant housing, excessive regulations and inequitable property taxes. These things drive up the cost of housing and that makes housing affordability impossible to achieve.  

[04:42] [The 2030 Census]

Let's talk about the Census now.

We're halfway between Censuses, with the count kicking off in 2030. In 2020, New York lost a congressional seat by a margin of 89 people and experts are projecting that we are set to lose two more in 2030. 

The U.S. Census Bureau estimated that the state gained about 130,000 people between 2023 and 2024. But that doesn't quite make up for the nearly 300,000 people the state lost per year for the prior two years. This could be further impacted if the Census Bureau gets funding cut or a citizenship question is added to the survey.  

Since World War II, the state has gone from 45 congressional seats to 26. New York's declining political influence should be a concern for everyone. It means we will get less money for healthcare or schools. 

We hear a lot of politicians talk about how it is a bad thing, but let's be crystal clear why this is happening: 

It is because the state has horrible housing policies.

The number one reason people are leaving this state is because our housing policy prevents the state from growing and building affordable housing so it can grow. 

There's a lot to like about New York. We have some of the best schools in the world, and New York City is still a thriving economic center. But if we can't reduce the cost of living, the city will never grow. It's that simple. And the easiest way to reduce the cost of living is changing housing policy. 

Every conversation about the Census from today until 2030 is just noise if housing policy reform is not at the center of the debate. 

[06:12] [E-Bikes & Battery Safety]

We wanted to take a quick minute to talk about e-bikes and battery safety.

Last week, the Department of Transportation put forth new rules that allow property owners to apply for sidewalk space outside their buildings. The DOT altered the rules to make it available for residential buildings. (The original proposal required that only buildings with first-floor retail could apply.)

We talked about our view of this move to StreetsBlog. 

We're happy that DOT adjusted the rules and we're excited that they've taken this step, but we need to be clear about the expectations here. Just because building owners are now allowed to do this doesn't mean it would just happen. The reason is because we have no sense of what the cost would be, what the fees to the government would be.

Furthermore, the buildings that house many of the city's deliveristas are older, rent-stabilized buildings that have no capital to build out e-bike charging stations. 

These buildings have been systematically defunded for a decade; these buildings see rising property taxes still, despite the fact that they have declining revenues and many of them are in the red. These buildings are also regularly denied help from the government because there are limited subsidies to go around. So there is still much more we have to do if we want to make battery charging stations the norm.  

If we want to solve this problem, we really need to get out all the stakeholders to find solutions that work for everyone. This has not happened yet, and that's unfortunate – because the reality is that every day, e-bike batteries are being charged in decades-old apartments that need electrical wiring upgrades to handle the increased capacity required. And that is a recipe for disaster.  

[07:39] [Update: Kingston’s affordable housing standards]

We wanted to check in on Kingston quickly before we end this podcast.

Last week, the mayor, Steve Noble, sent out an open letter to address a proposal by his Common Council that would redefine affordable housing and the zoning code. 

The mayor has been a champion of increasing supply, but also pushed for rent stabilization to be put in place to provide immediate relief to his constituents.

[The] history of New York City has shown that even though the mayor was well intentioned, the result of implementing rent stabilization was predictable. Once it is in place, there will be forces that will fight to prevent the building of abundant affordable housing in a community. They do this because it will end rent stabilization.

The mayor rightfully calls out the Common Council proposal for what it is: a NIMBY-led poison pill. He writes that, quote, “Housing development in Kingston will grind to a halt if the Common Council passes this zoning change,” end quote. 

He's correct. Now that the rent stabilization is in place in Kingston, the city will never allow the vacancy rate to grow above 5% again, and the city will struggle with lack of supply for the foreseeable future. 

This is in part because New York has the only rent control scheme in the country – possibly in the world – that expressly ties housing scarcity to tenant protections. And the outcome is predictable. Housing abundance becomes impossible, and all the benefits of housing abundance – lower rents, more choice, better quality housing – are also impossible.

It doesn't have to be this way. 

There is a semi-viral TikTok post going around by a young woman who lives in Austin, Texas. She was shocked when her lease renewal had a $200 reduction in rent. The reason is because the owners are scared to death she will move out, because Austin has built so much housing in the past five years that rents dropped by 7%.  

This is what elected officials in New York should be advocating for. If you make it affordable to build and preserve housing in this state, then the quality will improve and rents will go down.

When we say we can do better, this is what we mean. 

[OUTRO]

That does it for our first show in 2025. We will be busy next week up in Albany for the State of the State Address. Before I head up, I'm going to tape a podcast with all the latest news. 

As always, you can get updates on what's happening by following us on social media. We are @HousingNY on most channels.

The Housing New York podcast is a proud product of the New York Apartment Association. Please keep sending us feedback on our website or in the comments below. 

You've been listening to Housing New York with Kenny Burgos, and I'll see you all next week. And remember, good housing policy starts with good conversation.