One thought on “Evaluating the Rent Crisis: 10 Facts from the Housing Vacancy Survey and Advocates’ Reactions

  1. several notable items here:

    1) That new stabilized units have been added to the housing stock doesn’t necessarily mean that they’re the same as ones in old buildings subject to rent regulation due to size and age. Newer units are almost exclusively added under the 421-A tax abatement program, in which the initial rents are set by the landlord ($$$) and many if not all have preferential rents. If you’re paying $2500/mo as a preferential rent but your legal rent is $9000/mo and your landlord can revoke the preferential at the end of any lease period can you really be said to be benefiting from the protections of the rent stabilization law?

    2) There are approximately 1.1m buildings in NYC. Taxes are levied based not on building but on block and lot. There are some block/lot pairs which have more than one building on them, so there are about 890,000 block/lot pairs. There are around 75,000 buildings that have 10 or more units. These buildings provide the lion’s share of the available rental units in the city (around 65%), and are required to file a document with the department of finance called the RPIE, in which they declare what they expect the total income and expenses to be in the upcoming year. The DOF uses this information to calculate property taxes, and the information is public on the NYCProp website. You can look up your building by its block and lot and see exactly how much money your landlord is making, and how much he or she is paying in property taxes. Let’s just say that almost none of them are losing money, even the ones composed entirely of stabilized units (partly because the income on stabilized units is lower and as a result the income is lower, bringing down the property taxes). It’s ironic to hear landlords complain that their taxes have gone up when this increase is a direct result of increased income on the property.

    3) Focusing purely on the monthly rent paid is somewhat missing the forest for the trees. Rent stabilization has many benefits above and beyond low rent (which not all of them have, particularly new construction as noted above). Tenants in RS units have a right to first refusal, which means the landlord must offer them a renewal. This benefit alone hugely outweighs the simple issue of a regulated increase. Cities like NYC which are highly in demand, have a functionally infinite number of people worldwide who wish to live here, and a limited amount of space in which to build and live, force tenants in market-rate units to live as serfs, subject to the landlord’s whim. Every year you have to be prepared to pack everything you own, spend a tremendous amount of money in moving costs (first and last months’ rent, security deposit, lost income from having to pack and move, possibly paying movers, etc). This does not lend itself to stable communities or a healthy population. It’s stressful, unnecessary, and costly, and serves one purpose and one purpose only: to feed the sucking rapacious maw of rent-seeking engaged in by the city’s few thousand large landlord class.

    4) The reason that vacancies are lower in RS units is because people who live in them hold on to them for dear life in order to avoid the issues I discussed in (3) above. Ironically, it is the system of “luxury decontrol” established in 1996 that has created this problem. Prior to that, if you were in a stabilized unit, you were perfectly content to leave because you could be ensured that your next apartment would also have the same protections. Moving from a stabilized unit to a market rate unit is a profoundly damaging decision for any tenant.

    5) A huge number of rent stabilized units that have been lost since luxury decontrol was introduced in 1996 have been deregulated unlawfully. There are a thousand shenanigans that landlords can engage in to avoid properly registering units in their portfolio, and they almost always get away with it. Failure to register with DHCR, claiming much larger IAI increases than what was actually spent, claiming an IAI on an apartment in which no work at all was performed, registering the unit as stabilized with DHCR but providing the tenant with a market-rate lease. It goes on and on and on. And the state level regulatory body does nothing. They won’t even confirm that the rental history as documented by the landlord is factually correct! It is incumbent upon the tenant to obtain a unit’s rental history, compare it to permits, familiarize himself or herself with the rent stabilization code and decades of case law, obtain legal representation, and then sue the landlord in order to correct an illegal deregulation. There is a four-year statute of limitation in many cases when fighting an illegal deregulation, meaning that every apartment that is now illegally market-rate is a ticking time bomb. DHCR does nothing. And the rent stabilization association (a Kafkaesque name) wants to prevent tenants from having legal representation in housing court. The whole situation is insane.

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