Landlords called it: Vacancy rate jumps, rent-stabilization stays

Long-awaited survey also shows 42% jump in unusable rentals

New York /
May.May 18, 2022 03:49 PM
CHIP executive director Jay Martin (LinkedIn, iStock / Photo illustration by Priyanka Modi)

CHIP executive director Jay Martin (LinkedIn, iStock / Photo illustration by Priyanka Modi)

When Gov. Kathy Hochul extended the deadline to complete the 2021 Housing and Vacancy Survey, landlords decried the move.

They predicted the city would use the extra time — which the state said the pandemic made necessary — to wait for more renters to return, pushing vacancy rates below the 5 percent threshold required to preserve rent stabilization.

Looks like the landlords called it.

The survey, released this week, revealed a vacancy rate of 4.54 percent in 2021, above the 3.63 percent in 2017, and just below the 5 percent mark that constitutes a housing emergency and justifies rent stabilization.

Owner group the Community Housing Improvement Program initially warned that the state’s extension, which gave the city until July 2022 to publish the survey, would allow counting to continue into early 2022.

The survey’s methodology shows some of landlords’ fears were overblown. The city’s Department of Housing Preservation and Development writes that surveyors collected data from February to July 2021.

By February, vacancy rates in Manhattan had dropped to 5 percent from a pandemic high of 6.14 percent recorded in October 2020 by Jonathan Miller for Douglas Elliman. However, that February figure is a far cry from the 1.3 percent vacancy rate Miller found in February 2022.

Collection windows aside, CHIP notes that the survey highlights a more dire problem for the city: a shrinking stock of available rentals.

The survey’s vacancy figure does not include all unoccupied city units. Apartments pulled from the market for renovations or used as second homes, for example, are excluded.

So when the city tallied 103,200 vacant units, that figure excluded 353,400 apartments that it considers unavailable.

Since 2017, the number of vacant but unavailable units has surged by 42 percent.

CHIP points out that 42,860 of those apartments, about 12 percent, are rent-stabilized, have been vacant for over one year and are still cannot be rented. That’s enough to house the city’s entire homeless population.

The group contends that the Housing Stability and Tenant Protection Act of 2019, which severely curtailed owners’ ability to raise the rent, has decimated revenue streams and made it impossible for some to recover the cost of renovations.

“The law has effectively forced these units off the market,” said Jay Martin, executive director of CHIP.

To be fair, the survey does not break out the reasons rent-stabilized units are unavailable. And among all off-market units, the primary cause is occasional use: The apartment is a pied-a-terre or seasonal rental.

Still, CHIP says the sheer number of unusable, rent-stabilized apartments should be cause for concern. A separate survey the group conducted last year found at least 20,000 rent-stabilized apartments had been pulled from the market.

The city survey shows more than twice as many.





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