This week on Housing New York, we're in trouble. Rent-stabilized housing can't get financing. We'll explain why this is bad for everyone. Plus, there is a new head housing honcho in the New York City Mayor's office. And we have a message for mayoral candidates: You need to ditch the ‘government-brain’ policies. They aren't working.  

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. 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.”

[INTRO]

 Welcome to the Housing New York podcast. I'm your host, Kenny Burgos. We're fired up this week to talk about housing policy, and there's a lot going on. But before we get into that, I wanted to comment on something unfortunate that happened last week. 

Following President Trump's March 4th address to a joint session of Congress, Democratic Congressman Adriano Espaillat delivered the party's response in Spanish. Espaillat was then attacked by the National Republican Congressional Committee in a vile and racist way, which is just unacceptable. 

We try very hard to be nonpartisan. I'm a former Democratic assemblyman, but in my role as CEO of the New York Apartment Association, I'm focused on working with anyone who wants to make housing better. Housing should never be a partisan issue. Democrats, Republicans, independents – we all need housing. But attacks like the one we saw on Congressman Espaillat only serve to shut down substantive debate, and that helps no one. We must do better. 

And with that said, let's get to the news. 

[01:42] [Lenders are refusing to finance older rent-stabilized buildings]

On Friday, Sasha Jones from Bisnow published a story that really highlights how bad things are right now for rent-stabilized buildings. The story is about a conversation at a Bisnow event where lenders flat-out said they're unwilling to provide financing to older regulated buildings. 

Specifically, the lenders said too many borrowers are just walking away from rent-stabilized buildings, because net operating income continues to decline and therefore the value of the building declines and the borrower is unable to pay their mortgage.

So banks are now requiring any building owner to put up personal assets as collateral if they want a loan. We're talking about the homes they live in, or their cars, for example.  

This is really bad. Each building is essentially its own business. The owner absolutely does not want to put up their personal wealth as collateral, and they are not going to do it.

So if a boiler breaks in a building and the bank won't give the owner a loan to fix it, it's not going to get fixed. The rents in thousands of buildings across the city won't cover this repair. The city could come in and fix it, and then send the owner a bill, but they won't have any revenue from the building to pay the city back.

All of this leads to the same place, which is owners walking away from buildings and banks being forced to take them over when they really don't want to. That's the future of rent-stabilized housing right now. And it does not seem like anyone in government has a plan to absorb the impact of thousands of buildings at imminent risk of failure, or to protect the tenants that live in those buildings.

That should worry everyone.  

[03:13] [Adolfo Carrión named new deputy mayor for housing]

Now we're going to talk about the staff shakeup at City Hall. Mayor Adams introduced four new deputy mayors, including former HPD Commissioner Adolfo Carrión. Carrión replaces Maria Torres-Springer and will head up all housing policy going forward. 

We expect Carrión to follow in his predecessor's footsteps and continue to fight for more housing supply through rezoning and expanding city investment in housing.

As HPD Commissioner, Carrión was out in front, advocating for solutions to the growing insurance crisis – which impacts all multifamily housing, but especially rent-stabilized buildings.  In his announcement, Carrión said the city would continue to produce, quote, “Record affordable housing.” Sadly, we think he is being a bit too optimistic.

It is clear to everyone in housing right now that the government is very limited in what they are able to do. Tariffs and federal budget cuts will undermine efforts to build affordable housing.  Under the Adams administration, HPD has stepped up the creation of affordable housing projects, and they deserve credit for that. But the reality is, they still produce maybe 10% of the housing we need, and they were only able to accelerate the pace slightly under the Biden administration.  

Carrión once ran for mayor as an independent, and spoke a lot about the need to let market forces grow the city and make it more dynamic. We think he is going to have to bring more of that thinking to his current role, just to maintain current housing production.  

[04:39] [Federal ‘chaos’ blamed for Section 8 delay]

We're going to talk about NYCHA now. When we were recording the podcast last week, we were also getting reports from our members that once again, Section 8 payments were delayed. 

Ultimately – and again – it was just by one day. It seems like this is a new standard operating procedure, which we aren't happy about. 

Neither were Congress members Richie Torres and Nydia Velazquez, who spoke to Gothamist about this. Torres told them, quote, “The threat of funding freezes creates massive uncertainty that destabilizes critical programs like Section 8.”

We couldn't agree more. 

There was also another story about NYCHA and Section 8 vouchers this week. Since the agency closed the wait list this summer, they have issued more than 2,400 permanent housing vouchers. Unfortunately, only 290 of those voucher recipients have found permanent housing. 

Just to recap, NYCHA has a waitlist of 200,000 households. More than 600,000 have applied since the waitlist was established last summer. It took NYCHA about 15 years to clear their previous waitlist.  

We think this story highlights the scale of the problem really well. There isn't enough housing, so even people with vouchers struggle to find apartments. We support voucher expansion and always will, but at this point, the best thing we can do for voucher holders is get more apartments online and fast.  

[06:00] [Gas detector compliance deadline is May 1]

We wanted to give our members a quick update on Local Law 157, which requires owners to install UL-certified natural gas detectors in all apartments that have gas appliances by May 1st of this year. 

As we told you before on the podcast, the only battery-powered option available is the DeNova Detect. There are others that have cords, but we all know they run the risk of tenants unplugging them. 

The DeNova Detect costs about $85 and the property owner can charge a tenant a $25 surcharge. But we should caution all of you that the cost is likely to go up due to limited supply and tariffs. 

Again, owners only have until May 1st, 2025 to comply with the law. 

As we head into the rent-guidelines season, we want to note that the Rent Guidelines Board will not consider this cost when setting a rent adjustment. But in older rent stabilized buildings, the cost of compliance with Local Law 157 amounted to roughly 0.5% out of last year's 2.75% rent adjustment for a one year lease. And last year's rent adjustment didn't even keep up with inflation. 

When we say the RGB and the government are systematically defunding buildings, this is what we mean.  

[07:12] Brad Lander & ‘government brain’]

We're going to end the podcast discussing the housing plan put forth by city comptroller, Brad Lander, who is currently running for mayor.

Here's a quick recap. He plans to declare a new housing emergency, and he's going to funnel as much money and subsidies as possible to nonprofits to try and build housing.  

New York City has been in an officially declared housing emergency for more than 50 years. That emergency is triggered by a vacancy rate below 5% and allows the city to keep rent stabilization in place.

Over the past 50 years, elected officials have attempted to keep the housing stock as close to a 4% vacancy rate as possible, and that is the goal of Lander's proposal. 

Brad Lander wants to push our currently insane vacancy rate of 1.4% up to just 4%, and no further.

He isn't proposing a second emergency because he wants abundant housing. He doesn't. He doesn't want the city to surpass a 5%vacancy rate, which would automatically trigger an end to the city's current housing emergency law. 

At least that's what he's saying with this proposal. If he wants to correct the record on this, we encourage him to do so.  

This proposal reflects what we call ‘government-brain.’ He, like many politicians in New York City, wants to centrally plan everything and control housing supply. This has been the mentality of politicians for my entire life growing up in the Bronx. His proposal is to build just enough housing to relieve some of the pressure on renters, so they don't blame politicians for the lack of housing supply. 

A 5-10% vacancy rate should be the goal for a healthy housing market.

To be fair, most of the other candidates for mayor have similar proposals that rely on the government building just enough housing to make things slightly better. We think more reporters should call them on their BS. 

Every mayoral candidate should be asked if they want to achieve abundant housing by surpassing the 5% vacancy rate. 

We'd be very interested to see what they say. 

[OUTRO]

That's the podcast for this week. We're going to end on a positive note. Looking at the forecast, temps will rise into the 50s and 60s this week and next week. That's wonderful news for building owners who saw their heating bills surge between 20% and 30% last winter. 

As always, you can follow us on social media. We are @housingny on all channels. On Blue Sky, 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.