City to Rehab ‘Chronically Vacant’ Rent-Stabilized Apartments for Tenants With Vouchers

The initiative will invest $10 million to repair stabilized units that have sat empty, and turn them over to tenants with rental assistance vouchers—what the administration described as a “creative way” to boost the city’s affordable housing stock and increase options for voucher holders, who often facing discrimination from landlords and brokers.

Last year, 38,621 of the roughly 1 million rent-stabilized apartments in the five boroughs were registered as vacant—an affront, housing advocates say, at a time when the city faces record-high rents and more than 70,000 people sleeping in homeless shelters each night.

Mayor Eric Adams on Wednesday said his administration will spend $10 million to renovate 400 of those units this year so tenants with housing vouchers, who often face discrimination from landlords and brokers when searching for a rental, can move in.

The initiative, dubbed “Unlocking Doors” is the administration’s latest effort at “identifying creative ways” to address the city’s affordable housing shortage, in which apartments for low-income tenants are in particularly short supply: units priced below $1,500 a month accounted for less than one-percent of those on the market in 2021, the most recent vacancy survey found.

Empty rent-stabilized apartments—where rents can increase by only modest amounts each year, set by the Rent Guidelines Board—are a particular focus for housing advocates as a means of increasing availability. Some landlords have been accused of “warehousing” vacant units by intentionally keeping them off the market, holding out to either demolish them and build anew, or combine them with other stabilized units to remove them from stabilization rules.

Property owner groups have denied those warehousing accusations, saying rent-stabilized units typically sit empty because they require substantial renovations that landlords can’t afford, in part blaming 2019 state reforms that did away with a previous rule that let owners hike rents on new leases to fund turnover repairs.

The city’s new initiative, which will start taking applications from building owners this summer, will provide up to $25,000 for each of the selected 400 apartments. Though exact eligibility requirements are still being determined, it will targeted stabilized units with the lowest rents—around $1,200 a month—and those deemed “chronically vacant.”

Property owners won’t be reimbursed for the repairs until a tenant with a CityFHEPS voucher moves in. Under CityFHEPS, the city’s main rental assistance program, a tenant pays a portion of the rent—usually up to 30 percent of their income—and the subsidy covers the remainder.

The vouchers are a key tool in combating homelessness, advocates say, but their use is undermined by building owners who refuse to rent to CityFHEPS recipients, a practice known as Source of Income discrimination.

Though it’s illegal to turn a perspective tenant away because they have a voucher, it’s still common and under-enforced, and it can often take months for CityFHEPS recipients to actually land an apartment. Last fiscal year, families with children spent an average of 534 days in the shelter system before finding a permanent home.

“Through ‘Unlocking Doors,’ we’re getting urgently needed rent-stabilized apartments fixed up and ready for move-in for those who need it most desperately, so we can provide life-changing stability and security for 400 households experiencing homelessness,” Adolfo Carrión Jr., the city’s Housing Preservation and Development (HPD) commissioner, said in a statement Wednesday.

But some property owners said the $25,000 price limit isn’t enough to cover the “massive upgrades” that many rent-stabilized units need. Jay Martin, who heads the Community Housing Improvement Program, a group that represents landlords of regulated units, called the amount “completely unrealistic.”

In a statement, Martin pointed to the city’s lead paint abatement requirements and its landmark climate bill, Local Law 97, which beginning next year will set caps on the amount of carbon emissions buildings can produce—requiring owners to upgrade their properties or face fines.

“The cost for permits to do this work is between $7,000 and $10,000, before you even start the process of lead-remediation or upgrading the electrical wiring,” Martin said, saying the city needs “bigger and bolder” solutions than the “Unlocking Doors” plan.

“Even if this pilot program was successful, it cannot be scaled up to address the growing problem of naturally occurring empty rent-stabilized apartments,” he said.

Sue Susman, a housing activist who’s pushed for enforcement against apartment warehousing, told City Limits “it’s a good thing” Adams is paying attention to the issue, but that “the devil is in the details.” For one, the city should make sure it doesn’t select landlords with a history of harassing or displacing rent-stabilized tenants, she said. And since the units are being rehabilitated with public funds, they should be set aside for voucher holders permanently.

Owners of rent-stabilized properties who are struggling financially can apply for a hardship declaration to raise rents above the allowable limits, and very few do, Susman added, which “makes me doubt why a subsidy is needed.”

Either way, the pilot program’s 400-unit target would impact only around 1 percent of the estimated vacant stabilized units that are out there, Susman noted.

“Since warehousing is a larger problem, often related to predatory real estate behavior, that must still be addressed.”