This week on Housing in New York, Mayor Adams has 99 problems, and at least one is bad for housing policy. Plus, SCRIE and DRIE are great programs that should be expanded, and we'll tell you why. And we have to do a mea culpa about our comments on energy prices last week. 

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. Our housing crisis has been so long in the making, and the severity of this crisis is now so dire, that to change the trajectory of this problem, we need to do Everything, Everywhere, All at Once.”

Welcome to Housing New York. I'm your host, Kenny Burgos, the CEO of the New York Apartment Association. Each week we talk about the top housing stories from around the state, and make the case for smarter housing policy. 

We're taping this on Tuesday, February 18th, the day after President's Day. My favorite president was FDR because it was a time in America where we actually built things and I think we're in desperate need for some of that New Deal energy. 

Okay, on to the news. 

[01:32] [What’s happening at City Hall]

We kick off the podcast with the story dominating the news, the chaos at City Hall. To recap, Mayor Eric Adams was facing federal prosecution. Then the Department of Justice ordered the U.S. Attorneys prosecuting the case to drop it. One of those attorneys, a conservative, sent a scathing letter claiming that the DOJ's deal with Mayor Adams was a quid pro quo, and that Adams had agreed to implement Trump administration policies in his capacity as mayor. 

This triggered a political backlash among Democrats. Some are calling for Adams to resign. Others want Hochul to remove him from office. And over the weekend, a handful of deputy mayors resigned in protest, though they appear to be sticking around for a few weeks to enable a smooth transition. 

Mayor Adams has denied any quid pro quo, he said he is not resigning, and Governor Hochul was currently having a meeting with state and city electeds to discuss the fate of Mayor Adams. 

These developments are important because they are clear distractions from addressing the major problems facing the city, like the lack of affordable housing. The city government is massive, and many parts of it function on autopilot, but a strong mayor can make things run a lot more smoothly. 

The mayor can put pressure on the Department of Housing Preservation and Development when they are unresponsive to rent-stabilized building owners in dire need of support. A mayor that is not distracted could pressure the Department of Buildings to work with the City Council to reform laws around scaffold sheds, saving buildings tens of thousands of dollars. And a mayor that is not distracted would be able to put pressure on the Department of Finance to finally reform the city's unfair property tax system. 

We have a lot of problems here in New York. We need the mayor and the administration focused on solving those problems. We aren't advocating for any specific resolution to this current situation, but the status quo is unacceptable.  

[03:18] [SCRIE & DRIE Hearing]

We're going to take a moment to talk about SCRIE & DRIE. For those unaware, this is the Senior Citizen Rent Increase Exemption and the Disabled Rent Increase Exemption.

The program has been a tremendous success. It helps people on fixed incomes have their rents basically frozen. For building owners, it's also amazing. They get property tax relief to offset their biggest building expense: property taxes. And the owner doesn't have to worry as much about the tenant's ability to pay rent. 

This week, our staff is testifying about the importance of the program and suggesting ways we can even improve or expand it. 

This is a program that is in place and that everyone likes, so letting more people into the program seems like a great idea. Maybe it is reducing the age for SCRIE, or expanding the list of disabilities that could qualify for DRIE, or even creating a pathway for certain low-income renters to apply as well.

We would be open to any expansion of this program. We also think the city and state should continue to do more to get those who do qualify for the program signed up. And NYAA will definitely be doing some outreach to renters this year to let them know about the program.  

[04:21] [HPD launches ‘J-51’ portal]

Keeping in line with our tax stories, last week the Department of Housing Preservation and Development, or HPD, rolled out a portal for buildings to apply for the new J-51 tax abatement.

Here's the thing though: The rules around the law have not been finalized, but because the City Council passed the bill so late, the timeline to apply for relief is closing for buildings that did work between July 2022 and December 2024. So HPD needed to start the process before rules are finalized, and naturally, we don't anticipate the rules to change much. 

As part of the opening portal, HPD also released a cost schedule. This is how much you can be reimbursed for the work you do. Unfortunately, HPD thinks it doesn't cost nearly as much to renovate a building as the Division of Housing and Community Renewals, or DHCR – which is kind of laughable because DHCR is calculating prices on a statewide basis and even provides waivers to go above the costs, when buildings in New York City do work and it costs more than the listed price. 

We're going to let you in on a little insider secret here. Everyone who works in housing or financing around housing laughs at the HPD cost schedule. It never accurately reflects the cost of upgrading apartment buildings. For example, DHCR has the cost of wiring an apartment at about $18,000, while HPD has the cost at just under $10,000.

It's routinely referred to as a joke, or ridiculous, and that's unfortunate. This is a critical city agency. It's the city's main agency on housing, and they continually suggest housing costs are around 75% of what they actually are. 

We're probably starting to sound like a broken record here, but we're going to say it again: Housing has costs. Lying about those costs doesn't help anyone.  

[06:06] [NYC Charter Commission]

We're going to talk about the New York City Charter Commission now. Just a quick recap, the City Council had started to make moves to form a charter commission. This led Mayor Adams to rush the creation of one. Under city rules, if the mayor convenes a commission, it preempts the City Council.

So this commission has already been tarred by political fights. Setting that aside, the mayor's commission has made it clear that they want to put substantive regulatory reforms before the voters, with an argument that it will allow the creation of more housing. Last week, there were proposals put forth to change the uniform land review process, eliminate parking minimums, and much more. Those hearings continue this week.  

We obviously need more housing, and we think it's past due that voters should be able to say if they want more housing. So the City Charter Commission could be a good thing, and everyone in this city should push the commission towards including questions that will lead to more housing.

Let's hope that happens.  

[07:01] [ConEd & Gov. Kathy Hochul]

Okay, we're ending the podcast with a mea culpa. Last week we told you about the proposed hike in energy prices by ConEd, and we made it clear that we did not expect any elected officials to call for a freeze on those hikes. We assumed they would just show up to the RGB hearings in a few months and call for a rent freeze, and they would act like they had no control over the rising energy costs.

We were slightly wrong. Last week, Governor Kathy Hochul publicly called for the state agency overseeing energy prices to reject ConEd's proposal. 

The Public Service Commission doesn't have to listen to the governor. The members of the agency are appointed by the governor, but they are not beholden to her, so we don't know if they will follow her calls. 

We thank the governor for recognizing that rising energy costs will harm renters and many homeowners as well. We would hope that other elected officials who claim to care about tenants will also recognize that increasing energy prices on housing providers is also an increase on tenants. 

We're a few months away from the start of hearings with the Rent Guidelines Board. I would hope the board takes into consideration what happens with these price hikes when they determine how much rent should be adjusted. 

[OUTRO]

That's going to do it for the podcast this week. Full disclaimer, the news coming out of City Hall is moving at a mile a minute, so it's likely when you hear this podcast that some of this news may be outdated. But its impact on housing is timeless. 

Be sure to tune in next week and we'll be sure to have all the newest updates coming out of City Hall, the state and everything housing-related.

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 Bergos and I'll see you all next week.

And remember, good housing policy starts with good conversation.