Survey says: More rent-stabilized decay
CHIP poll shows where landlords are cutting corners
It’s no secret that owners of rent-stabilized properties have had a tough time funding repairs.
Facing restrictions on rent increases in the 2019 rent law and rising operating costs, landlords claim they have had to warehouse tens of thousands of units because they can’t afford to fix them up.
A new survey of the Community Housing Improvement Program’s 3,700 owner members revealed where they have cut corners.
Three out of four reported cutting back on essential building-wide repairs, such as a roof or boiler replacement, since the rent law passed. Nearly 90 percent said they had forgone kitchen or bathroom renovations.
Just over half decided against revamping their buildings’ security systems to include cameras or video intercoms or adding storage lockers for deliveries to thwart porch pirates.
Efficiency upgrades have also been pushed to the back burner. Over 40 percent of respondents said they would not replace lighting with LED fixtures that use 90 percent less energy — a budget saver for tenants.
A quarter said they opted against installing fuel computers, which better regulate heat and hot water systems and reduce a building’s energy consumption.
And among owners who have cobbled together the cash to refurbish buildings, many blame citywide delays for preventing them from starting.
The city’s Department of Buildings requires permits for any renovation that involves plumbing, electrical or construction work, as Brick Underground explained. https://www.brickunderground.com/guides/how-to-renovate/when-do-you-need-a-building-permit-to-renovate-in-NYC But with the Adams administration beset by staff shortages, 85 percent of owners said it had taken significantly longer to secure them.
“This survey highlights the difficult choices that property owners are forced to make as a result of a perfect storm created by regulatory changes, pandemic-driven inflation and an understaffed government,” CHIP’s executive director, Jay Martin, said in a statement.
The results also underscore the tradeoff for tenants under rent stabilization. The law’s reform in 2019 eliminated the 20 percent rent hike allowed when stabilized units became unoccupied.
It also prevented landlords from using rent hikes to recoup more than $15,000 in apartment renovation costs over a 15-year period. For major capital improvements such as a new boiler, the annual rent increase can now be no more than 2 percent.
These provisions have kept rents down. But a new boiler for a building as small as 10 units can cost $50,000, so landlords have been putting off such upgrades — and complaints about cold apartments are up 25 percent this year citywide.
Four out of five landlords reported their average operating expenses jumped 15 percent since 2019, a survey of the Community Housing Improvement Program’s 3,700 owner members revealed. During that period, the rent guidelines board okayed rent hikes totaling only 6.25 percent.
To correct course, CHIP has asked that owners be allowed a one-time rent increase to market rate once a tenant vacates a unit.
The group has been working on suggested bill language for the proposal, but nothing has been introduced in the state legislature. Tenant advocates have opposed the idea, saying landlords should fund renovations from profits earned before the 2019 law.