Rental vouchers are one of the few things on which tenants and landlords agree. Mayor Zohran Mamdani, not so much. And it cost him some bad press.
“Mamdani Reverses Campaign Promise to Expand Rental Assistance” is the kind of New York Times headline that feels like a gut punch to a mayor. Gothamist had the story two weeks ago, but its headline was tame (“Mamdani delays expansion of NYC housing aid program amid fiscal strain”).
The ostensible reason for the decision is that Mamdani has to close a $7 billion budget gap, and can’t add spending to a CityFHEPS program that has already ballooned from $176 million in fiscal 2019 to $1.2 billion last year.
But one political consultant said there’s probably more to it.
“The enormous fiscal aspect is of course a factor in the new mayor’s shift here, but I suspect there’s a deeper underlying ideological reason,” the source emailed me. “The mayor and Cea Weaver and the like have a default setting of being suspicious and not supportive of any program that addresses affordable housing instability and homelessness through paying landlords.”
Edited version: “The mayor and Cea Weaver don’t like paying landlords.”
In any case, they can’t pay landlords with money they don’t have. Remember, they cannot raise income taxes. Only the state can. And that is not going to happen this year with Gov. Kathy Hochul facing a Republican challenger.
But tax revenue continues to grow even without an increase in rates. Will Mamdani eventually expand CityFHEPS to comply with the law passed by the last City Council? That’s iffy at best.
Rather than fight the City Council’s lawsuit demanding full funding for the expansion, Mamdani is trying to negotiate a settlement with the City Council and the Legal Aid Society.
“It’s not just the money involved, it’s the mechanism and who gets paid,” the source said. “My thinking is that City Hall has other plans for this crisis. Anything they do in this space is not going to include rent payments.”
The Adams administration claimed the CityFHEPS expansion law could cost $17 billion over five years. The City Council insisted it would be less, but would be worth it regardless — in part because vouchers are cheaper than shelter beds.
Lost in this debate is an inconvenient truth: Rental vouchers don’t create housing. They do the opposite: They increase competition for the available supply. That pushes rents up.
Homelessness is not just about poverty or mental illness. Many cities have poverty rates like New York’s, but little homelessness because housing is available and inexpensive. Here, the vacancy rate for voucher-eligible units is about 1 percent.
A family in a shelter or crashing at a relative’s house will take its voucher and go apartment-hunting. The city should ensure it’s building enough homes to offset that increased demand.
What we’re thinking about: Michael Powell has been a New York City journalist for decades, but in the 1980s he was a tenant organizer in East Flatbush. That gave him a fascinating perspective to write about the struggles of renters and owners of rent-stabilized buildings — a perspective, he notes, that Mamdani lacks. Powell posted a free link to his article. Send your thoughts on it to eengquist@therealdeal.com.
A thing we’ve learned: Many readers emailed me to say NYCHA’s $54,000-per-apartment cost to install heat pumps was too high. But one real estate source, whose co-op spent $70,000 per unit to add heat pumps, thought it was too low. NYCHA told me the $38.4 million project included electrical upgrades, window work, radiator removal and more to accommodate 2,137 heat pumps in 712 units, as well as new hot water systems. Alternatives to cure the development’s heating problems would have cost as much or more, a spokesperson said.
Elsewhere…
The mayor’s new chief technology officer, computer scientist Lisa Gelobter, led the team that developed the animation technology used to create GIFs. She was also on the Hulu launch team.
With those credentials, she ought to be able to bring technology to the antiquated, cumbersome HPD violations process.
I have been gathering anecdotes and opinions on housing violations for a future column. From my discussions with landlords, the process is riddled with inefficiencies — and more than a little dishonesty.
Gelobter and her team could start by introducing technology to make it easier to clear violations after repairs are made.
Coordinating city inspectors’ follow-up visits with tenants is a full-time job for some property management employees. Even when they manage to get everyone on the same page, the inspector or the tenant sometimes misses the appointment, and it can be weeks or even months before the stars align again.
One landlord suggested that a superintendent could record and upload a video showing the completed repair, with the tenant validating that it was done. An HPD staffer could then clear the violation without ever leaving her desk.
Closing time
Residential: The top residential deal recorded Thursday was $16.4 million for a 4,962-square-foot, sponsor sale condominium unit at 211 West 84th Street on the Upper West Side. Alexa Lambert, Alison Black and Elizabeth Goss of Compass had the listing.
Commercial: The top commercial deal recorded was $5.9 million for a bulk sale of sponsor-sale condominium units, storage spaces and parking spots by the Permanent Mission of Canada to the United Nations.
New to the Market: The highest price for a residential property hitting the market was $9.7 million for a 4,592-square-foot, 25-foot-wide townhouse at 37 Garden Place in Brooklyn Heights. Jennifer H. Cooke of Brown Harris Stevens has the listing.
Breaking Ground: The largest new building permits filed were for a combined project at 680 and 690 East Fordham Road in Belmont. It would be 190 units and 116,822 square feet. Nikolai Katz filed the permit on behalf of Hen Vaknin of Bridge Asset Management.
— Matthew Elo