Since persuading the state to overhaul New York’s rent law in 2019, critics of the real estate industry have not pushed any important legislation through in Albany. Then again, neither has real estate. The two sides have merely defeated each other’s initiatives, battling to a stalemate.
Progressives stymied efforts to tweak the new rent law, blocked a measure allowing building owners to avoid fines by buying renewable energy credits, and ensured that 421a expired. Landlords, meanwhile, have prevented good cause eviction, a pied-à-terre surcharge and a vacant-apartment tax from coming to a vote.
One attempt at compromise — packaging good cause eviction with a 421a replacement — was rejected by the landlords who hate good cause because they don’t care about 421a, a tax break for developers.
There is one issue, however, that should unite the two sides: housing supply.
The scarcity of available homes is terrible for tenants because it pushes prices up and limits their ability to move. It’s good for owners of market-rate apartment buildings, which is why investors pay more for such properties in supply-constrained markets.
Even though landlords benefit when housing is scarce, they don’t pressure lawmakers to keep it that way, for two reasons.
First, NIMBYs do a fine job of that on their own. Pitchfork-toting homeowners have kept housing production in New York among the lowest in the nation. Second, the developer wing of the real estate lobby wants more opportunities to build. So the official position of the Real Estate Board of New York is that the government should allow more housing.
If the tenant and real estate lobbies united on this issue, it would be a formidable combination. Each side has enough friends in the legislature that, together, they could probably get Gov. Kathy Hochul’s Housing Compact passed.
Divided, they will likely lose out to the single-family homeowners favoring the status quo, which is a tight housing market, high prices and extremely limited growth. These suburbanites are already halfway to killing Hochul’s housing plan, and it’s only been a month.
If more housing would help both tenants and the real estate industry, but neither side by itself can make it happen, why don’t they come to Albany as a united front?
Let us count the reasons.
The lack of trust between the two sides is a major impediment. To the extent that a relationship even exists between tenant and landlord groups, it’s hostile. Vladimir Putin and Volodymyr Zelenskyy will probably work things out before Cea Weaver and Jim Whelan do.
Often, they can’t even agree on facts. Some tenant activists don’t accept that adding housing reduces rent growth. The research is wrong, they insist, because they can see projects, gentrification and rents rising at the same time. Surveys have shown that 30 percent to 40 percent of Americans believe development raises housing prices, though economists say the opposite.
As Weaver put it during a panel discussion Thursday, people are “not moved by studies.” She seems wholly uninterested in changing their minds. Other than Aaron Carr of Housing Rights Initiative, tenant activists either stay away from the Yimby camp or attack it.
As a result, the advocacy community demands that most or all new apartments have below-market rents. If developers cannot build them on their own — which they can’t, because investors won’t fund and lenders won’t finance money-losing projects — then the government, the advocates say, should step in with massive subsidies.
New York’s housing subsidies already dwarf those of other states, and Hochul and Mayor Eric Adams say they are increasing them by billions of dollars. But they won’t jack up taxes or defund the police to answer the activists’ calls for billions more.
Some folks on the tenants’ side accept that more housing production would help, but say it would take too long (although studies show immediate effects). The housing crisis, they argue, demands an immediate remedy such as good cause, aka universal rent control.
But the good cause bill would be permanent. Even if the legislation promised that it would go away when the housing emergency abates, landlords would not accept it. They know that rent control in New York was also pitched as a temporary response to a wartime demand spike from returning soldiers, but 80 years later, it’s still here. It became essentially permanent because its constituency grew too powerful for politicians to defy.
Nor will landlords take any comfort in clauses that the tenant lobby has offered to put in the good cause bill.
“Every time we talk to landlords, they say they just want to get bad tenants out,” the Legal Aid Society’s Ellen Davidson told The City. “We tell them we are happy to add those provisions and ask them what’s missing from the list, and the landlords say there is nothing, we just want the right to decide not to renew a lease.”
Landlords know a disingenuous offer when they hear one. Leases already give them the right to get bad tenants out, but it’s expensive, time-consuming and difficult to win a nuisance case against a tenant, especially with housing courts backlogged and Legal Aid attorneys opposing them.
Gathering evidence, hiring private detectives and persuading scared neighbors to testify is a far more challenging method of eviction than letting a lease expire. So when landlords see a quote like Davidson’s, they lose faith in negotiating.
By the same token, tenants have plenty of bad-landlord stories, which appear in the media more often than bad-tenant ones. A NY1 article Tuesday featured a Sunset Park tenant who, following four incident-free years of paying rent, got an eviction notice after she “called out” the property manager for not telling her about bed bugs in a neighboring apartment.
Rather than embrace Hochul’s Housing Compact, tenant groups attacked it because it doesn’t include good cause eviction, which they can’t seem to pass as a standalone bill. The result could well be that neither one becomes law.
Tenants would be deprived of opportunities to move to new buildings near Metro-North and Long Island Rail Road stations, or to move into apartments vacated by others who move to the new buildings, because they will never be built.
One possible solution is to amend the good cause bill in a way that landlords can accept. They seem to be tolerating the versions adopted in California, Oregon and New Jersey.
“There’s a version of it that can be too extreme,” Open New York executive director Annemarie Gray said at the Thursday forum. “There’s a version of it that can work.”
Her Yimby group has endorsed good cause. But tenant activists have not reciprocated by backing Yimby. Either they have tunnel vision or just don’t want to tell their gentrification-fearing constituency that building mixed-income housing benefits them, even if not every unit in a project is deeply affordable.
Another obstacle is socialist ideology — the belief that for-profit housing only benefits developers, and that the city’s real estate market is broken not because of restrictive zoning or rent regulation but because an unlimited supply of rich people would fill whatever is built.
“Housing is a human right,” they say, but what they mean is, “Get the profiteers out of housing and let government and taxpayer-funded nonprofits take over.”
Anything short of that highly unlikely outcome is opposed, and the status quo continues.
Racial tension also gets in the way. Anyone who proposes market-rate housing in a community of color is accused of displacing people or destroying Black culture.
That makes it nearly impossible to rezone neighborhoods such as Harlem for more housing, for example Bruce Teitelbaum’s One45 project or the Olnick Organization’s Lenox Terrace redevelopment.
On the plus side, race has made it easier to upzone white areas such as Soho, Gowanus and Throggs Neck, because most City Council members won’t support a colleague trying to keep out a disadvantaged population. An upcoming test of this dynamic is in Homecrest, Brooklyn, where locals have mobilized against a Plaza Realty project only eight stories high.
Open New York is trying to rally support for it. Will other progressives answer the call? Probably not. They are busy watching suburbanites drown the governor in their backyard pools. Indeed, they’ve brought a hose and cement shoes to the scene.
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