Opinion: We Can’t Regulate Our Way Out of a Housing Crisis

“Ending the ability to combine units will lead to less housing, not more. You cannot regulate your way out of a housing affordability crisis. You need to build your way out.”

There is an old cartoon you’ve probably seen. There is a leak in a boat, and the character puts their finger in the hole to stop the leak, then two more leaks pop up. This continues until the character’s hands and legs and head are blocking leaks, as more and more pop up.

This is basically how New York’s state government has been handling housing policy for decades. They think more regulations and more government involvement will somehow make the existing housing affordable and abundant. More fingers to plug holes, when the actual answer is to build new boats.

There are several housing bills currently before the governor, including S2980/A6216 and S2943/A4047. None would increase housing or make it more affordable. In fact, they would do the opposite. Alterations and combinations are not a loophole or scheme, they are a natural part of a functioning rental market. Sometimes more studios are needed in the rental market. Sometimes more three-bedroom apartments are needed.

And the state housing agency is poised to adopt regulations addressing these so-called “loopholes.” These bills are duplicative in that regard, and a waste of legislative efforts. But no matter what happens regarding apartment combinations, apartments that have been occupied for decades usually need upwards of $100,000 in renovation work to meet government-imposed requirements on apartment turnover. 

When the state legislature implemented vacancy control on rent-stabilized apartments in 2019, units coming off long-term tenancies had no pathway to get back on the market. If two apartments ended up empty next to each other, some owners would combine them and create an entirely new apartment. Because this was considered a new unit with no prior rental history, the Division of Housing and Community Renewal (DHCR) permitted the owner to set a first rent that would cover the cost of the renovations. If the governor signs S2980/A6216, or the DHCR advances rules ending this practice, it will not create more housing. It will create more empty apartments in need of significant renovations.

This is why our organization continues to fight for a small change to the law to bring empty rent-stabilized apartments coming off long-term occupancy back onto the market. If an apartment has been occupied for a decade or more, it should be eligible for a first rent if significant renovations and code upgrades are performed. In most of the city, the new rents will be in line with rental voucher amounts. If lawmakers want to give voucher holders the first chance to rent these new apartments, we would support that. If lawmakers have an alternative proposal, we will gladly hear them out. But this pipeline of rent-stabilized units should not be ignored. 

Let’s be clear. Ending the ability to combine units will lead to less housing, not more. You cannot regulate your way out of a housing affordability crisis. You need to build your way out. All over the country there are cities that have incentivized more housing development, and they have seen rents drop, or at least hold steady.

ANOTHER VIEW: Opinion—To Solve NY’s Affordability Crisis, Expand & Protect Rent Stabilization

The lack of supply is arguably most noticeable for voucher holders. New York has a robust voucher program to support tenants in need, but at least 20,000 voucher holders still can’t find permanent housing because there is no housing available. Source of income discrimination exists, but is not the root cause. There is a severe lack of rental units available at those price ranges and the policies being advanced by the state legislature are preventing tens of thousands of units from being restored to the rental market. Government regulations are limiting supply and making the situation worse.

Despite Gov. Kathy Hochul’s best efforts to advance a bold and ambitious proposal to increase the supply of housing, she couldn’t reach an agreement with the state legislature last year. Or the year before that. Yet state lawmakers continue to advance bills that will reduce housing supply, like the two mentioned above, and discourage participation in affordable housing programs.

Every day that goes by, the housing situation gets worse. Rents continue to rise for most. Homelessness grows. And renters have fewer options to find housing that fits their needs. 

The governor has the right idea to focus on increasing supply. That’s why she should stay the course and veto any legislation that would decrease the supply of affordable housing—including these bills. If she doesn’t hold the line the outcome is inevitable: higher rents for most people and an increase in the record high homelessness that is gripping New York City.

Jay Martin is executive director of the Community Housing Improvement Program (CHIP).