Building owners warned that Albany’s draconian 2019 rent-law changes meant to “protect” tenants would actually prove disastrous to them, as well as to landlords, and new data show how right they were.
The data comes in a study by two real-estate groups showing how the reforms made it financially impossible for owners of rent-stabilized units, especially smaller landlords, to make needed repairs and upgrades.
Instead, they’re forced to let those units sit vacant, creating “zombie apartments,” even as New Yorkers are desperate to find decent places to live.
The study — the largest of its kind, covering 242,000 units — shows “small-portfolio” owners (basically mom-and-pops with 10 or less units) getting slammed: Among those with more than 75% of their apartments subject to rent stabilization, a full quarter are vacant.
Compare that to the city’s overall vacancy rate: a mere 1.4%.
More than 26,000 rent-stabilized units sat vacant last year, amid sky-high demand.
The report also cites a stunning 99% of rent-stabilized units owned by those mom-and-pops in buildings needing “major capital improvements” — roofs, walls, boilers, plumbing, etc.
The big owners are also facing tough times: A full 29% of their units are in properties needing major work.
Landlords are forgoing even smaller-type improvements — new stoves, dishwashers, windows, etc.
Filings by members of the Rent Stabilization Association to make the major repairs and upgrades plunged 37% since 2019; to handle less expensive needs, a whopping 77%.
That’s not because the need for repairs fell, only the ability to pay for them.
Albany refused to consider the consequences in 2019, when it banned the 20% rent hikes once allowed for major, necessary work after vacancies and drastically capped how much in improvement costs owners could pass on to tenants via higher rent.
Meanwhile, other building expenses — for fuel, labor, insurance, property taxes — have risen, even as the city’s Rent Guidelines Board under Mayor Bill de Blasio held yearly rent hikes to near-zero.
Upshot: Repairs and upgrades are going unmade, with apartments (especially those no longer meeting city code) either left vacant or rented out in shoddy condition.
Folks looking for decent apartments get burned.
Oh, and Albany also scrapped a key tax break that made affordable-housing construction feasible. So few new units are coming online.
If the goal was to make life materially worse for apartment-seekers, tenants and landlords, it’s hard to think of a better way.
Some lawmakers, even Democrats, do get it and want to restore vacancy resets to enable owners to do rehabs.
Yet progressives won’t hear of it. And as long as they continue denying landlords the means to keep up their units, the city’s housing stock will continue to decline for everyone except the very rich.