REBNY landmarking report a “false correlation”: researcher

Body claimed rent-regulated units in landmarked areas at higher risk

TRD New York /
Sep.September 15, 2015 04:45 PM

UPDATED, 5:30 p.m., Sept. 15: The war over a City Council bill that would put a timeline on the city’s landmarking process continues to heat up, with preservationists taking aim at a report from the Real Estate Board of New York that they claim misinterprets data on rent-stabilized apartments. And now, the researcher whose data was used in the REBNY report criticized its conclusions, calling them “meaningless.”

Using research compiled via open source data from Department of Finance records, the REBNY report asserted that a higher percentage of apartments in landmarked areas of the city had lost rent-stabilized status than apartments in non-landmarked areas.

But the author of the research has come out in criticism of REBNY’s use and interpretation of the data, describing the body’s analysis of rent-stabilized units in landmarked areas as a “false correlation.”

“You can’t say whether these losses are concentrated in landmarked areas because of [the landmarks process], or that landmarks tend to be concentrated in areas that are more expensive,” John Krauss told The Real Deal.

Krauss, who works at the GovLab at New York University’s Polytechnic School of Engineering, compiled the data as part of a side project depicting the loss of rent-regulated apartments in the city since 2007.

“If you look at the areas that have a lot of landmarks, they happen to be areas that are very desirable,” he added. “You need to do a lot of work to prove that landmarking is causing an effect. To simply say that this factor sometimes aligns with another factor is meaningless, and that’s essentially what REBNY has done with this [data].”

As an example, Krauss pointed to the Upper East Side, which bucks the trend asserted in the REBNY report. The neighborhood lost 34 percent of its stabilized units in non-landmarked areas between 2007 and 2014, compared to only 20 percent in landmarked areas.

Krauss also noted that REBNY failed to establish a research control for rent prices in neighborhoods “to see whether it’s high rent that’s a factor” in the loss of rent-stabilized units. “They’re not controlling for rental prices, and rental prices are the main way that rent-stabilized units exit [the market],” he said.

The real estate industry body has stood behind its report. “Advocates have claimed that landmarking helps preserve rent regulated units,” REBNY president John Banks said in a statement. “Our analysis shows there is no factual basis for that assertion.”

The organization’s report, released Monday, used Krauss’ data to note how the city lost 23 percent of rent-stabilized apartments in landmarked districts between 2007 and 2014, compared to only 5 percent of regulated units in non-landmarked areas.

It cited the Greenwich Village Historic District and Upper West Side/Central Park West Historic District — which lost 25 percent and 33 percent of their rent-stabilized units, respectively, in that seven-year span — as examples.

But preservationists are already pointing to Krauss’ critique of the REBNY report to fight back against the industry body in its support of a City Council bill that would increasingly regulate the Landmarks Preservation Commission.

The Bill Would Place a timeframe on the landmarking process for individual properties and districts, and has received support from real estate, union and affordable housing interests. The Greenwich Village Society for Historic Preservation and the Historic Districts Councils are among the entities vehemently opposing the legislation.

REBNY’s claim on landmarking’s effect on rent-stabilized units “is as ludicrous as it is irresponsible and false,” GVSHP executive director Andrew Berman said in a statement Tuesday.

“If they really cared about the loss of rent-regulated units,” Berman said, “they would be lobbying for the repeal of vacancy and luxury decontrol, which they helped get instituted in the 1990s, as affordable housing advocates have been doing for years.”


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