This week on Housing New York, a Section 8 scare as voucher payments were delayed for a day because of some federal government chaos. We'll explain what happened. Plus, energy costs are going up, which will raise rents… Funny how elected officials are not calling for a freeze on natural gas prices. And we will deliver our weekly Albany update. 

Let's start Housing in 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 we all must move from the position of No and say Yes. Housing will finally allow us to turn three generations of No into a city of Yes.”  

[INTRO]

Welcome to Housing New York. I'm your host, Kenny Burgos, CEO of the New York Apartment Association. We're trying to fix our housing crisis, so each week I talk about the top housing policy stories and we try to keep people Informed on this crucial issue. 

We are recording this on Monday, February 10th. I suspect most of you're recovering from last night's Super Bowl, and if you are a Chiefs fan, I'm very sorry for the week you're gonna have ahead of you. And to the Eagles and the fans, Congratulations. 

Enough football talk. Let's get to the news. 

[01:29] [Section 8 chaos]

We're kicking off the podcast talking about Section 8 vouchers. You may have seen our social media video explaining what happened last week, but we want to go a little deeper. 

To recap, early last week monthly payments for Section 8 were delayed due to confusion around federal funding. This was triggered by a memo sent by the Federal Budget Office directing various payments to be withheld. The confusion was resolved quickly, so the impact was minimal. But this episode is a good way into a larger discussion about vouchers and why it is vitally important that the government is dependable when it comes to processing of vouchers. 

Politicians often focus only on making sure there is funding, or passing laws to make sure that voucher holders are not discriminated against. But if you want a good voucher policy that actually helps renters, then you need to make sure the system functions and payments are protected. Passing laws from 30,000 feet with no understanding of what happens on the ground level doesn't help renters, even if it allows you to get a few good press ops.

For example, most people don't realize that if the government doesn't pay the voucher amount for a tenant, the property owner has no other option but to evict that tenant – unless the tenant can pay the full rent out of pocket. 

Typically, they cannot. And even if an owner asks the government to sort out the situation, a lot of times they still have to start an eviction proceeding just to get the matter resolved. This is a constant source of frustration for owners, and can be calamitous for tenants. 

We know one voucher holder who was friends with their landlord. They went to the government together to ask for the situation to be resolved, and yet the owners still had to start a non-payment case to get it sorted out. 

We would encourage all of the elected officials that care about good housing policy to be more aware of these on-the-ground realities when they're crafting voucher policy.  

[03:12] [Energy price spikes & political hypocrisy]

Let's talk energy prices. We teased this story on last week's podcast, but I wanted to go into more detail about why fuel costs are spiking and why that is bad for rent-stabilized building owners.

Con Edison is one of the two energy providers that operate in New York City. They just put in a proposal to the state agency that oversees energy pricing, asking for double-digit hikes starting in 2026. ConEd argues that the 11.4% hike for electric and 13.3% hike for gas is necessary to expand and maintain its infrastructure for extreme temperatures; to meet climate goals and to pay property taxes.

We aren't going to dispute their claims. But the proposed double digit increase comes after the State Public Service Commission already approved a 9.1% rate hike in 2023. 

Additionally, the PSC approved higher transmission fees for ConEd, which is why natural gas is significantly more expensive for its customers, compared to the city's other energy provider, National Grid. Property owners can't just switch. ConEd has exclusive rights from the state to sell natural gas in Manhattan and the Bronx, while National Grid covers most of Brooklyn and Queens.  

In theory, the Rent Guidelines Board would take these huge cost spikes into consideration when calculating rent adjustments. That's their job. But for a decade, they've kept rent well below inflation. 

In fact, in the past three years under Mayor Adams, RGB adjustments have come in at 2% below inflation on average. And operating costs for older rent stabilized buildings are increasing a lot faster than inflation. It's not just fuel costs, it's insurance, property taxes. The RGB's own data says rents should have been raised 7.5% more over the past three years to cover operating costs.  

We don't expect lawmakers to call on the Public Service Commission to freeze energy prices the way they like to call for rent freezes from the Rent Guidelines Board. 

It's been crickets for most elected officials on this issue, and that's telling. If they actually wanted to keep rents down, they would care more about the skyrocketing cost of maintaining housing. It suggests they actually just care about virtue signaling to renters so they can get their votes. 

There's a word for that. Hypocrite.  

[05:24] [Flood Report]

Moving on, we're going to dive into a pressing issue that could reshape the future of New York City: flooding.

The Regional Plan Association is projecting that in the next 15 years, New York City could face the loss of nearly 20,000 homes due to flooding. That's more potential destruction than what we experienced from Hurricane Sandy.  

The report highlights the city's escalating vulnerability to climate change, emphasizing the urgent need for comprehensive urban planning and significant investment in resilient infrastructure. 

What we like about the proposal is that it outlines a practical approach to handling this problem. When it comes to climate risk, lawmakers in New York have mostly just passed costly mandates onto businesses that aren't really going to help the situation.

For example, Local Law 97 is forcing property owners to invest billions of dollars to reduce their carbon footprint. But the impact of that law is a drop in the bucket on global emissions. It's not going to prevent future flooding, and it fails to create a pathway to help vulnerable buildings prepare against catastrophic floods. 

If we truly want to reduce carbon emissions and make the city more sustainable for the future, then we need to upgrade our old buildings into new ones that allow for more density. But all the laws currently in place make that virtually impossible. Even with the passage of City of Yes, thousands of 100-year-old buildings cannot be redeveloped because they are stabilized, or landmarked, or both. 

We applaud what the city is doing on climate change, but we need to start thinking bigger. And we need to accept the fact that the federal government and much of the world is not prioritizing this issue. So what we do in New York needs to factor that in.  

[07:00] [Will Good Cause Eviction raise New Yorkers’ rents?]

Turning to the fun topic of Good Cause Eviction.

The Good Cause Eviction law passed last year. It was intended to protect tenants from unreasonable rent hikes and unjust evictions by creating a “soft cap” on rent increases, allowing owners to raise rents between 5% and 10% annually, based on a formula that accounts for inflation. 

Yet The Real Deal argues that Good Cause Eviction could actually raise New Yorkers rents higher than they would have been otherwise, by triggering a phenomenon economists call “anchoring.” 

This is where the government-approved cap becomes a status quo increase. Property managers move to apply maximum allowed increases under the law, rather than what they would traditionally have done. 

In New York City, if you look at rent increases on most free market apartments over the last decade, you will see that they typically are 3% to 4%. The pandemic plunge and rapid recovery threw that off a little, but that's generally how rent increases went in the past. 

We're probably going to have to wait another six months or so to get really good data on whether or not lease renewals have seen higher increases under Good Cause Eviction. But economic history suggests the impact of the law likely will be higher rents over time. 

Another quick thing on Good Cause Eviction. The city of Syracuse recently voted to withdraw its proposal to implement this legislation locally. We aren't sure why they delayed, but maybe they saw that article in The Real Deal. 

[08:22] [Albany update: the Housing Access Voucher Program]

We started with vouchers and we're going to end with vouchers, as we bring you an update on what's happening in the state government.

Last week, it became clear the state Legislature is going to prioritize the passage of the Housing Access Voucher Program in this year's budget. In past years, Governor Kathy Hochul has blocked its implementation, citing concerns about the cost of the program. 

Known as HAVP, this will be a state-based voucher that is very similar to Section 8. Tenants will be able to take the voucher with them if they move to a new place, which is something you can't do with CityFHEPS vouchers and other programs. 

Here at NYAA, we love vouchers. They have proven throughout history to be the most effective and efficient way for the government to provide housing assistance to low income families.

They also guarantee that apartments are in good condition. When you compare vouchers to public housing, it is clear that renters are ending up in much nicer homes and the government is housing people at a lower cost than they are spending on maintaining public housing developments like NYCHA.  

One criticism of vouchers that popped up this week in a City Limits article is that CityFHEPS voucher holders face discrimination when it comes to choosing where they want to live.

While it is true that these voucher holders tend to live in certain low-income neighborhoods around the city, the story didn't really hit the nail on the head when it comes to explaining why that is. 

First off, the rents in those areas are lower, making the vouchers more competitive. Also in low-income neighborhoods, apartments turn over more often, which is a byproduct of larger hardship. People struggling to make ends meet are more likely to be priced out of the city, so they seek better opportunities elsewhere.  

The idea that voucher concentration in geographic areas is somehow a product of discrimination is absurd. The solution to this is increasing supply all over the city – it's basic economics. That will get more voucher holders placed in permanent housing and will strengthen the city overall. 

[OUTRO]

It's time to wrap up the podcast. 

Before we go, a friendly reminder to our listeners that Friday is Valentine's Day. I hope all of you are able to spend time with your loved ones. And being that Valentine's Day is on a Friday, I also hope you have your dinner reservation set up early in advance. 

Next week, we're going to tape the podcast on Tuesday because our office will be closed for Presidents Day. 

As always, you can follow us on social media @housingny, and on Bluesky, we are just @housing. 

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.