New York City Comptroller Brad Lander is throwing cold water on landlords’ claims of distress and arguments for a rent law rollback.
Owners claim that the 2019 rent stabilization reforms forced them to hold units off-market and caused financial distress. As a fix, they’ve pushed for a legislative tweak that would let them raise rents to pay for repairs needed to bring badly deteriorated units online.
But Lander said his findings refutes landlords’ tales of woe.
The report found the number of apartments unavailable for rent “fell significantly from 2021 to 2023,” few cheap units held vacant need major repairs, and values of rent-stabilized buildings are on par with pre-2019 levels.
“This report finds no evidence that the HSTPA led to an increase in vacancies or distress on the city’s rent-stabilized housing,” it says, referring to the Housing Stability and Tenant Protection Act of 2019.
“The proposal for the reintroduction of vacancy decontrol is a dramatic overreaction,” the report adds.
Jay Martin, who heads the Community Housing Improvement Program — the group pushing for the vacancy bill — called Lander’s report dishonest.
“The IAI proposal is a joke”
“If you use statistics to manipulate and mislead, you are basically lying,” he said. “That is what this report is doing.”
The report’s finding that vacancies declined after a pandemic-era increase is based on data collected by the 2023 Housing and Vacancy Survey, which the city’s Department of Housing Preservation and Development conducts in coordination with the U.S. Census Bureau.
The survey pooled data on 18,000 units, 5,000 of which are rent-stabilized, to extrapolate that less than 1 percent of rent-regulated units were vacant last year — down 3.5 percentage points from 2021.
CHIP called the sample size too small to provide an accurate read, as 5,000 units represent about 0.5 percent of the city’s rent-stabilized housing stock.
Other studies, including one by the city’s Independent Budget Office, found the number of rent-stabilized units held vacant for two straight years had jumped by 8 percent in 2022 from 2021.
The IBO report bucks the comptroller’s findings that vacancies have trended down, but uses slightly older data than the Housing and Vacancy Survey does.
“It will be important to keep a close eye on this data, to see whether it follows the pattern of the 2023 HVS,” the comptroller’s report said.
Landlords have claimed that the units most likely to be held vacant are cheaper apartments, as the rent is least likely to cover the cost of renovations.
The vacancy survey found that vacant rent-stabilized apartments that lease for less than $1,500 and are in need of repairs totaled 1,732, or just 0.5 percent of the total rent-stabilized housing stock.
CHIP countered that surveyors based the metric on whether they deemed a unit “dilapidated,” meaning a necessary fixture such as a toilet was missing. The group said that doesn’t account for units held vacant because the owner can’t afford to bring them up to code. It listed lead paint remediation, which can cost many thousands of dollars, as an example.
On building valuations, the comptroller found the value per unit in recent rent-stabilized sales had rebounded to pre-2019 levels.
Rent-stabilized brokerages including Ariel Property Advisors and Alpha Realty, however, have cited value declines of 50 percent to 60 percent for some buildings, and recent sales have borne that out.
Alpha’s Lev Mavashev said even “nice, pristine buildings” with solid rent collection and no deferred maintenance or violations are still trading at discounts of 35 percent to 40 percent.
Though the comptroller dismissed the idea of allowing a rent hike when units become vacant, he did recommend ways to help owners struggling to afford repairs.
They included hiking the cap on rent increases to pay for individual apartment improvements, or IAIs, to $25,000 from $15,000 over 15 years. That works out to $139 per month rather than $83 per month. The bump would match the funds available through the city’s “Unlocking Doors” program, which provides the money up front.
Critics of the city program have said the funding wouldn’t come close to paying for a gut renovation, which can run from $70,000 to $120,000.
CHIP also shot down the comptroller’s proposed increase, comparing it to the $110,000 maximum per unit the city offers nonprofits to fix up apartment buildings through the Neighborhood Pillars program.
“The IAI proposal is a joke,” said Martin, who often notes that NYCHA budgets $400,000 per unit for renovations.
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Industry says report proves the 2019 rent law was “disastrous”
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Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?