The city is launching a $10 million pilot program to help landlords repair vacant, rent-stabilized apartments, but some owner groups say it won’t be enough.
The “Unlocking Doors” initiative will provide up to $25,000 per unit to owners of vacant, rent-stabilized apartments that need work to be re-rented, Mayor Eric Adams announced Wednesday.
There are some strings attached.
The renovated apartments would be dedicated to formerly homeless tenants through the city’s voucher program, known as the City Fighting Homelessness and Eviction Prevention Supplement, or CityFHEPS.
The pilot program is expected to include 400 apartments, a fraction of the tens of thousands of vacant, rent-stabilized apartments in the city. The effort will test whether the funding level is sufficient to bring back properties that landlords say they keep vacant because the state’s 2019 rent law does not allow them to recover enough renovation costs.
The city program will not provide funds upfront, but rather reimburse landlords for qualifying expenses after repairs are done and have been reviewed by the Department of Housing Preservation and Development.
The Real Estate Board of New York commended the Adams administration for “putting forth creative solutions that seek to address the need for renovating and maintaining much-needed housing stock for voucher holders.”
But the program was immediately criticized by other landlord groups. In a joint statement, the Community Housing Improvement Program and the Rent Stabilization Association said $25,000 is insufficient for the repairs needed in stabilized buildings.
The groups also criticized the administration for not consulting “with organizations that represent the majority of rent-stabilized apartment building owners in New York City before announcing this pilot program” — that is, CHIP and RSA.
“Even if this pilot program was successful, it cannot be scaled up to address the growing problem of naturally occurring, empty, rent-stabilized apartments,” the groups said. “We need to be advancing bigger and bolder solutions to this problem, instead of suggesting it doesn’t exist or that it can be solved by a small incentive.”
Jay Martin, executive director of CHIP, said in an interview the program “solves zero problems” for rent-stabilized owners, noting that much of the grant money would be paid back to the city in the form of building permit fees.
“It is indicative, unfortunately, of folks who do not understand housing policy,” he said.
CHIP has been pushing for the state to pass a law allowing landlords a one-time rent reset for vacant, rent-stabilized units. The group is pushing for the policy’s inclusion in the state budget and expects a standalone bill to be introduced if that does not happen.
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Landlords have argued that the rent stabilization law’s severe restrictions on their ability to increase rents left them unable to profitably bring units up to code after longtime tenancies ended. A recent report by the city’s Rent Guidelines Board showed that owners’ net operating income dropped a record 9.1 percent in 2021.
The pilot will prioritize apartments with the lowest rent, that are “chronically vacant” and require “significant repairs to become safe and habitable.” CHIP has said such apartments commonly require $75,000 and sometimes well over $100,000 worth of work, including lead and asbestos abatement, yet can only be rented for around $1,000 a month or much less.
The city will begin accepting applications for the program this summer.