The lack of affordable housing has been an ongoing issue in New York City. Spencer Platt/Getty Images
Ask any woke politician worth his weight what the biggest crisis facing New York City is, and the answer will almost inevitably be the lack of affordable housing. And though there are more than 40,000 vacant apartments in need of major renovations that could significantly alleviate this problem within months, these same officials don’t want to acknowledge the economic reality of what it will take to bring them back on the market.
Unfortunately, the onus for restoring these units falls squarely on these legislators’ disinterest in correcting misguided housing policies, rather than on the “greedy landlords” — or whichever unhelpful scarlet letter they hang on the necks of the individual owners and small businesses providing well over 1 million units of affordable rent-stabilized housing.
To many New Yorkers, it comes as no surprise to hear that even the most basic economics lessons get thrown out the window the moment cars merge over onto Thruway EXIT 23 – ALBANY.
But before we even get into fuzzy capitol math, let’s recount the political narrative that drives an unnecessary fault line between all parties involved.
The story is simple and oft-repeated. A developer negotiates with elected officials on the scope of a new residential complex, then agrees to set aside a certain number of apartments as affordable. The politicians then take credit for this success! They send out newsletters. They show up at ground breakings and ribbon cuttings. Hard hats, golden shovels, oversized scissors, the whole shebang.
Tens of thousands of rent-stabilized units are empty. Getty Images
Yet the moment the first tenant moves in, the dynamic changes. The very same developer, or the building’s buyer, becomes an enemy of the state: the landlord. By any measure, elected officials reframe building owners of all sizes as archnemeses, rather than what they truly are: providers of affordable housing.
Again, we aren’t talking about a small subset of affordable units. We are dealing with the vast majority. The 1 million active rent-stabilized apartments are almost six times the number the New York City Housing Authority governs, and essentially all the governor’s and mayor’s housing plans involve a reliance on private development. The government doesn’t actually build much housing, despite the proclamations.
Of these 1 million rent-stabilized units, the city’s 2021 Housing and Vacancy survey pinpointed 42,860 that are vacant. By addressing the underlying reason these units aren’t online, we could restore the equivalent of a quarter of all NYCHA apartments — enough to house every family currently in the city shelter system.
Fixing NYCHA, moreover, will cost taxpayers $40 billion. Fixing the broken cost-to-rent increase formula to facilitate the repair of all rent-stabilized units at the end of their useful life will cost taxpayers nothing.
The roadblock to restoration lies in the law. Consider this example:
Last week I visited a two bedroom, rent-controlled unit in The Bronx that’s been vacant two years. The tenant resided there for 30 years, paying well below market rate, as she was covered by the state’s rent-stabilization laws right up until she passed away. The building itself was erected in the 1910s, and a lot of work needs to be done to bring it back online.
Access to affordable housing lies in the hands of public officials. Getty Images
We aren’t just talking about cosmetic repairs — this apartment needs new energy-efficient appliances, electrical cabling, piping, sheetrock, flooring, insulation, tile, windows, lead remediation and a fresh paint job. The owner estimates a $60,000 final tab.
Many of these repairs are not optional. They must be done to comply with a host of codes implemented by the same politicians now chiding the process, including the soon-to-be enforced Local Law 97, which will saddle massive and unnecessary costs on nearly every multiple-dwelling structure in the city, including affordable housing.
Until 2019, building owners were allowed to increase rent by 2.5% of these renovations’ costs, or $250 for every $10,000 spent. But new laws limit the increase to just the first $15,000 spent and lowered the cost-to-increase ratio to .59%. Thus, after spending $60,000, the aforementioned owner can only raise the rent by $89 while spending approximately $400 per month to finance that capital improvement at current rates.
Therein lies the problem: Housing “advocates” want the rent — and the apartment — to be stuck in some decades-old time capsule where nothing changes. That isn’t practical, nor based on economic realities.
We should view the fact a 30-year tenant paid less than 50% of the market rate for three decades as an affordable-housing success story. Instead of freezing the apartment in a state of 1990s disrepair, allow owners to rehab their units and lease apartments at new rates to give the next occupants the same opportunity to live there affordably for the next 30 years.
It’s a win-win only that only Albany could miss.