Fudging the numbers? Landlords say NY gamed survey to save rent stabilization
Gov. Hochul signed legislation delaying verdict until mid-2022
Every three years, New York City checks the temperature of its housing market. Or at least, it’s supposed to.
The triennial survey, sponsored by the city’s Department of Housing Preservation and Development, counts apartment vacancies. A rate over 5 percent would mean the housing emergency, and thus rent stabilization for 1 million apartments, is over.
Of course, that has never happened. And landlords have long argued that the government would do whatever it takes to keep decades of regulatory handiwork from unraveling.
Recent events have reinforced that belief. The state delayed the vacancy survey, which landlords saw as an overt attempt to engineer a rate that perpetuates stabilization at their expense.
The legislature first pushed back the vacancy survey, slotted initially for 2020, to this year to avoid overlapping with the decennial census. The U.S. Census Bureau conducts both polls.
Then, the agencies overseeing the survey tweaked regulations for the pandemic. When the Census Bureau began collecting data Feb. 1, it was able to conduct interviews digitally, rather than in-person. Sample sizes were shaved from 30,000 respondents down to 12,000 to save time, according to a report from the Office of Management and Budget.
Those measures were not enough for State Sen. Brian Kavanagh. Ten days before the survey was to conclude, he introduced a bill to give the city and Census Bureau more time.
The legislation cited the need “to ensure sufficient time to complete the survey in the context of the Covid-19 pandemic.” Kavanagh’s office did not respond to a request for comment on why the Census Bureau needed the extension in light of the other time-saving measures.
CHIP executive director Jay Martin sees the wait as an obstruction — an attempt to stall so the city can keep counting until it can calculate a vacancy rate that preserves rent stabilization.
“It’s not really fair for property owners who had to operate with high vacancy rates early in the pandemic,” Martin said. “The survey should take a snapshot of what’s going on in the market. It shouldn’t be used by the government as a tool to keep instituting the laws they want.”
State law says survey results must be submitted 30 to 60 days before the determination deadline. Extending that deadline means the survey can keep going until May or even June.
And with that extra time, a spokesperson for CHIP said, HPD will be able to count the first quarter of 2022, when vacancy rates figure to be lower than they were earlier this year.
Advocates for rent stabilization consider the delays reasonable and appropriate. They say the vacancy surge caused by the pandemic was a temporary anomaly that should not determine the fate of a policy that benefits millions of tenants by tightly limiting rent increases.
Both sides agree that if the official vacancy rate were to surpass 5 percent, the legislature would come under immense pressure to redefine the rent emergency that sustains the law.
As of September, the vacancy rate in Manhattan had slipped to 2.2 percent, Douglas Elliman’s quarterly report by Miller Samuel found. That’s down from 7.6 percent in May, the month the official survey would have otherwise concluded. The reports use different methodologies, but vacancies do appear to be declining in the city.
A spokesperson for HPD confirmed that the vacancy rate is based on data collected throughout the survey period and that the law does not specify a cutoff date for fieldwork. Therefore the Census Bureau can keep at it through next spring.
CHIP postulated that the agency might even cherry-pick rates to achieve an average under 5 percent.
“If a government wants to come up with a number, they can,” said Martin.” [HPD] has shown that.”
The agency did not specify how it will average data collected from February 2021 through the beginning of next year.