The New York City Council ignored this economic reality when it recently passed eight resolutions urging the New York State legislature to end vacancy decontrol, eliminate the 20 percent vacancy allowance increase, and extent rent regulations to all rental units, including those which are not currently regulated.
These proposals would essentially end all capital investment in New York’s rental housing – in turn jeopardizing the health and safety of tenants.
If enacted, this would upend a system that for a quarter century has protected 2.5 million New Yorkers, strengthened our city’s housing stock, and provided significant tax revenue that fuels the creation of local jobs.
That is why the Real Estate Board of New York is opposed to these measures, as should any responsible actor similarly committed to preserving and improving the quality of housing in New York City.
Turning off the source of private sector revenue, namely by eliminating regular market-based rent increases, would have a devastating impact on the quality of housing stock across the city. Revenue is essential to the operation and maintenance of safe and habitable apartments; unfortunately, one need look no further than to the current state of the New York City Housing Authority (NYCHA) units for evidence of this.
Many New Yorkers are old enough to remember a time when our city was governed by rules similar to those that were recently proposed.
After more than two decades of rent regulations, the 1970s saw a rapid decline in our housing inventory through tax foreclosures and demolition as rental housing was starved of vital capital. These were disastrous results for New York’s rental housing stock. The loss of rental housing was so dramatic that city officials made a decision not to publish statistics that showed high rates of housing demolition.
As the economic viability of rental housing had been undermined by rent regulations, rental building owners saw no remedy but to embark on what was an unprecedented number of rental apartments converted to co-ops or condominiums throughout the 1980s.
Our current system of rent laws were created out of that culture of disinvestment. These laws have had the intended effect of both protecting tenants and providing owners with the capital to maintain their buildings as rental buildings.
Conversion rates dropped significantly, owners and investors began to make capital investments in the city’s rental housing, and vacancy decontrol stimulated a wave of new construction that is a part of the solution to the ongoing housing crisis.
Twenty five years of progress has now left our housing stock in the best shape on record: the latest Housing and Vacancy Survey demonstrated that the quality of our rental housing has the lowest measured maintenance deficiencies since the first 1991 survey.
The latest Rent Guidelines Board Income and Expense report, too, showed a decline in distressed properties.
There’s no disputing that the vacancy decontrol and vacancy allowance provisions and other aspects of the rent regulation law which encouraged capital investment have improved and transformed the quality of our rental housing, and with it, New York City.
Moreover, those policies were created to solve problems stemming from policies very similar to what the City Council now wants to enact again.
If the Council gets its way, the entire rental housing stock in New York City will once again resemble the 1970s and 1980s – a disastrous outcome for millions of New Yorkers and a failure to learn from our past mistakes.
There is ample and overwhelming evidence that the provisions in the rent regulation law, many enacted in 1993 and which this Council asks to be undone, has improved and transformed the quality of our rental housing stock.
These bills want to undo this progress and place our entire inventory of rental housing — regulated and unregulated — on the path that will lead us back to the housing conditions of the 1970s and to the present housing conditions at NYCHA.
In Other REBNY News
Learn from top brokers and industry leaders at our Residential Brokerage seminar, “Road Map to Success: Identifying Your Route,” on Tuesday, May 22nd from 5:30 to 7:00 p.m. The discussion, hosted by our Residential Membership Committee and sponsored by Bank of America, will be moderated by Ken Scheff of Stribling & Associates and feature Mirza Avdovic and Kellee Buhler of Compass Real Estate, Joanna Mayfield Marks of Halstead Property, Jennifer Morcheles of REAL NY Properties, and Ilan Bracha of Keller Williams NYC. Register online.
Join Michael Rossi of Elegran Real Estate at our Sales Agent Boot Camp on Tuesday, May 22nd from 9:30 to 11:00 a.m. Hosted by our Residential Education Committee and sponsored by Bank of America, this boot camp will unpack best practices for winning deals in a changing market. Register now.
Network with and honor outstanding leaders in the field of commercial property management at our 15th Annual Commercial Management Leadership Breakfast on Thursday, May 31st from 7:30 to 10:00 a.m. at the New York Hilton Midtown (1335 Avenue of the Americas). Register now to attend and email [email protected] for sponsorship opportunities.
Save the Date! Our Finance Committee will host its 7th Annual Cocktail Party on Wednesday, June 6th from 5:30 to 8:30 p.m. at 230 Fifth Avenue, Rooftop Lounge. Tickets are $70 for members and $90 for non-members. Email [email protected] for more information and sponsorship opportunities.
Stay in front of New York City’s top retail dealmakers by sponsoring our 20th Annual Retail Deal of the Year Cocktail Party to be held on Tuesday, June 12th from 5:30 to 7:30 p.m. at Club 101 (101 Park Avenue). For more information on sponsorship opportunities, email [email protected]
Enjoy a summer day of golf and tennis while networking with NYC real estate professionals at our Annual Golf and Tennis Outing on Monday, July 30th at the North Shore Country Club. Take advantage of this opportunity to advertise your company, sponsor the event, and provide promotional items or raffle donations. Register online and email [email protected] for sponsorship opportunities.