In a housing shortage, this doesn’t seem like a good thing:
The multitude of regulations that New York piles onto buildings with three or more units — and the steady increase in such requirements — is an incentive to convert a multiple dwelling into a two-family.
“I’m shopping for an architect to turn my 3 into 2,” one owner messaged me on LinkedIn. “The layering of regulations onto the MDL hits these buildings super hard, and I don’t see that stopping.”
The MDL, or Multiple Dwelling Law, applies to homes with three or more units. Not only do the regulatory burdens that the city and state keep placing on multiple dwellings spur some owners to downsize to two units, it dissuades others from upsizing to three or more units.
“The MDL imposes a series of costly requirements, including fire sprinkler systems throughout the building and its units,” wrote the Manhattan Institute’s John Ketcham. “When owners of a two-family home wish to add an additional unit, such as by legalizing a ground-floor ‘walk-in’ apartment, they must install sprinklers throughout the entire home.”
The rationale for stricter safety measures in multiple dwellings is that a fire in a single unit puts everyone in the building at risk. But where should the line be drawn? Between two units and three seems like the wrong place.
Given the housing affordability crisis, the government should at least review some of the obstacles that deter the creation of units or incentivize the removal of units.
Speaking of removing units: Former Council member Ben Kallos told me that when New Yorkers combine apartments, which happens a lot in the Upper East Side co-ops and condos he represented, it reduces the unit count but doesn’t worsen the supply shortage because the number of bedrooms stays about the same.
In his view, combining apartments just turns housing for couples into housing for families — keeping people from moving to the suburbs for more space. I am sure that explains some conversions, but I suspect many of these projects are by people who see an opportunity to buy the unit next door and have money to burn, so why not?
What we’re thinking about: One real estate lawyer told me that despite the Division of Homes and Community Renewal’s rejection of deregulation attempts that were once routinely approved for substantially rehabilitated rent-stabilized buildings, sub-rehabs continue to happen. Is that market frozen? As busy as usual? Somewhere in between? Send thoughts to eengquist@therealdeal.com.
A thing we’ve learned: At co-housing space Lighting Lofts in Bushwick, a room with an elevated loft bed and use of common areas costs this geologist $1,400 a month, plus $250 for utilities and weekly cleaning. That’s about what it costs New York City to house someone in a standard shelter bed, and one-third what it pays for hotel rooms for the homeless.
Elsewhere…
Dr. Mehmet Oz, the Trump administration’s administrator of the Centers for Medicare & Medicaid Services, claimed on March 3 that New York’s Medicaid program last year provided 5 million people with personal care services, which assist people with things like bathing and meal prep.
That would be nearly three-fourths of the state’s 6.8 million Medicaid enrollees. “That level of utilization is unheard of,” Oz said in a video, adding that New York needs to “come clean about its Medicaid program.”
But the real number of New Yorkers who used those services last year was about 450,000, or 6.6 percent of total enrollees, a CMS spokesman Chris Krepich told the Associated Press last week. He said the agency had misunderstood New York’s billing codes.
Obviously, Oz should have checked with the Hochul administration before going public with such an accusation. But perhaps that was intentional, because he knew more people would see the initial story than the retraction.
Gov. Kathy Hochul initially responded to the fraud claim by saying, “I will have to stand up and show them the truth and show them the facts, that they’re wrong.” But she never did, at least not publicly. The error was revealed 27 days later by the Fiscal Policy Institute’s Michael Kinnucan.
Closing time
Residential: The largest residential sale Tuesday was $7 million for 381 Union Street. The multifamily townhome in Carroll Gardens is 4,000 square feet. Compass’ Carl Gambino has the listing.
Commercial: The largest commercial sale was $10.4 million for 76-09 34th Avenue. The Jackson Heights rental has 83 units across six stories and is 100,900 square feet.
New to the Market: The highest price for a residential property hitting the market was $60 million for Unit PH1 at 16 Fifth Avenue. The new, Greenwich Village triplex condo apartment is 8,300 square feet. The Corcoran Group’s Tara King-Brown and Ryan Kaplan have the listing.
— Joseph Jungermann