The Really Worst Landlord

New York City will have to spend $1.2 billion more than planned to fix public housing over the next five years, under a settlement reached with the U.S. Attorney’s office this week. The U.S. Attorney found, among other problems, that the New York City Housing Authority: “undermined HUD’s inspections by disguising the true condition of its properties. This deception included turning off water to developments to prevent HUD inspectors from observing leaks; posting “danger” signs to keep inspectors away from troubled areas; and temporarily hiding improperly stored hazardous materials. NYCHA management even included a document with suggestions for deceiving inspectors in NYCHA’s official training materials. This cover-up “how-to” guide was only removed in Summer 2017, after this Office called its existence to the attention of NYCHA’s outside lawyers.”

The City Budget for fiscal 2019, beginning July 1, 2018, was adopted by the City Council, Thursday, anticipating a $1.7 billion increase in property tax collections from 2018. Property taxes have risen more than 37% since 2013, not including this new hike.

Rent Guidelines Board hearings in the Bronx and Brooklyn began this week with little fanfare. The main lower Manhattan hearing begins at 4 p.m. Tuesdayat the Great Hall at Cooper Union, 7 East 7th Street.

Housing Court Judge Susan Avery has been booted from the bench for “lack of judicial temperament.”

One year after the 421a benefit was replaced with the Affordable New York plan, only four buildings have been awarded tax breaks.

With the State Legislature likely to adjourn next week, the New York State Builders Association and New York State Association for Affordable Housing are sounding the alarm about possible last minute action on a bill that would impose prevailing wage requirements statewide on any project receiving any level of government assistance or tax breaks. The bill passed the Assembly and has a Republican sponsor in the State Senate.

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Fewer than half of the buildings with water tanks are in compliance with annual inspection and filing requirements, according to a City and State NY investigation. Reporters identified both City-owned and private buildings with obvious health hazards from, among other things, dead animals and exposure to the elements. Owners can check their filing status on this map.

The City Department of Buildings has announced that a new PW2 work permit application form will be required as of June 18th.

The New York Times continued its series on evictions and housing court this week with a lengthy piece on the Brooklyn housing part. Unlike earlier pieces in the series, this one reported owners’ problems with the court as well as tenants, and quoted judges complaining about tenants who appeared before them “umpteen” times. The reporter found some “textbook bad landlords, but also plenty of dishonorable tenants.” The Times also ran several letters to the editor on the series, including one from ABO.

Speaking of deadbeat tenants, the New York Post reported this week that New York City is late paying hundreds of millions of dollars to non-profits that provide homeless services, some of which, in turn, is owed to building owners who contract with those organizations to house the homeless.

We don’t know if the free range chicken or organic egg came first, but rents are higher within one tenth of a mile of Whole Foods supermarkets in Manhattan. The premium is about $1 a foot per month according to a CoStar analysis.

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Signs of the Times

Every employer in New York City will have to post an anti-sexual harassment sign where workers gather by 120 days after new legislation was signed by Mayor de Blasio Wednesday. The Commission on Human Rights is supposed to promulgate the rules and sign before the effective date. The Mayor also signed a law requiring every employer with 15 or more employees to require the employees to take anti-sexual harassment training classes, effective April 1, 2019.

In addition, the City Council, Wednesday, passed a slew of new fire safety bills that the Mayor is expected to sign into law. Int. 608 will require building owners to post a notice to tenants to close doors behind them when escaping a fire. Int. 602 requires all apartment entry and stair doors to be self closing by July 31, 2021. There were exceptions previously depending on year and type of construction. Int. 604 provides that after January 1, 2021, new or replacement smoke detectors within 20 feet of a kitchen meet reference standards for limiting false alarms when cooking—a standard some photoelectric detectors may meet now. Finally, Int. 610 will require annual notices to tenants that if they have children under six, the owner will provide stove knob covers for gas stoves, unless there is no cover that fits the stove model. This is the Council’s reaction to a recent tragic fire started by a child playing with a stove, although there is no research that shows that the covers work or for what aged children. It will go into effect 180 days after the Mayor enacts it.

Building owner Kamran Hakim is appealing the dismissal of his libel suit against Public Advocate Letitia James for putting him on the Worst Landlords list despite the fact that the buildings cited were vacant and slated for demolition. The judge apparently said it wasn’t libel because it was only her “opinion” that she published.

James, meanwhile, is lobbying hard to get named as a replacement for disgraced State Attorney General Eric Schneiderman.

New York City is planning to end contracts on 1700 cluster housing units for the homeless by August, with the expectation that most of the units will fall back under rent stabilization after being temporarily exempt.

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Drip, Drip

The New York City Water Board is considering a 2.36% increase in water rates effective July 1st. Hearings are scheduled later this month, with a final vote May 31st.

Repealing the Urstadt Law, ending vacancy allowances and luxury decontrol, and regulating currently deregulated units are all on the New York City Council’s wishlist. The Council Housing Committee, Wednesday, approved eight home rule resolutions asking Albany to tighten regulations and the full Council is expected to pass the resolutions next week.

The State Division of Housing and Community Renewal this week posted Operational Bulletin 2018-1:”The Effect of Defective Work on the Disposition of an Owner’s Application for a Major Capital Improvements (MCI) Rent Increase,” outlining how the Division would treat MCIs where there was evidence of defects such as leaks in a unit after buildingwide waterproofing. In general, the policy will be to treat defects in less than 20% of the apartments with individual unit exemptions from the MCI, but the Bulletin goes on to say that DHCR is “not strictly bound by this percentage.”

The City Department of Buildings is looking for owners, architects, engineers and other qualified professionals to volunteer for NYC Energy Conservation Code Advisory Committees. The Code is reviewed every three years, but this year the City Council has mandated stricter standards that will have to be incorporated. Apply by May 29th.

Airbnb is responsible for 9.2% of the 25% increase in citywide rents between 2009 and 2016, according to a statistically interesting report released Thursday by Comptroller Scott Stringer.

Ossining, in Westchester County, is planning a vacancy study to determine if it can justify adopting rent stabilization. Coincidentally, a market analyst in Westchester this week noted that new construction coming online would cause countywide vacancy rates to increase from about 3% to 5-8% next year.

Rent control leads to a reduction in available rental housing, higher rents for unregulated units, causes renters to occupy apartments that are too large or small for their circumstances, results in longer commutes, and poorly targets needy renters, according to an exhaustive review of 60 years of empirical studies published this week.

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Cuomo Pushes Rent Control

Governor Cuomo wants to move quickly this Spring to end “vacancy decontrol,” presumably meaning either luxury decontrol or vacancy allowances, if Democrats take a Westchester Senate seat in a special election next week. It’s part of his plan to move left to undercut his primary challenge from Cynthia Nixon and to pressure State Sen. Simcha Felder to rejoin mainline Democrats.

Discounting rent increases based on tenant rent burdens “confiscates property…In so doing, the RGB has transformed a statutory price control into a public assistance program funded directly by property owners,” according to testimony submitted by CHIP Counsel Joseph Condon to the Rent Guidelines Board, Thursday. The Board, meanwhile, has announced public hearing dates in June and a final vote June 26th. Plan to testify at one of the hearings!

New York City is developing regulations for posting Energy Letter Grades in apartment buildings  beginning in 2020, but the Energy Star scores the ratings are based on are being modified this month in a way that will lower scores based on the source of energy used—a factor pretty much up to utilities and out of owner control.

The City’s plan to “preserve affordability” at the Linden Plaza Mitchell-Lama complex is too expensive, according to a lawsuit brought by the tenants council. They say the improvements and rent increases provided by the plan are more costly than if the buildings had simply exited Mitchell-Lama and were just subject to rent stabilization.

The City Department of Environmental Protection has announced grants up to $250,000 and 25% rate reductions for projects that allow buildings to re-use water.

Two pyrrhic court victories for owners were reported in nuisance eviction this week. The court in Westchester Plaza Holdings v. Furlow agreed that a tenant who had to be brought to court for non-payment eight times in 30 months should be evicted, then stayed its own order to see if the tenant could manage to pay on time for the next six months. In 529 W. 29th St., v. Reyes (subscription required), the Court acknowledged that a tenant with mental problems had caused two fires, but ruled he should be allowed to remain in occupancy to see if new medications helped.

Just 140 apartments in several projects either built or proposed prompted the Village of Mamaroneck in Westchester County to declare a six-month moratorium on multifamily housing, in the latest kneejerk reaction of Not In My Backyard.

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Apartment Price Index Up 4.5%

The Rent Guidelines Board Price Index of Operating Costs rose 4.5% since last year, according to a report issued Thursday. The “commensurate” rent increases suggested by the analysis range from a low of 1.75% and 3% for one and two year renewals to a high of 3.5% and 6.25% depending on assumptions about inflation and lease renewals vs. vacancies. The Board will vote on proposed guidelines April 26th, with a final vote after hearings in June.

The RGB also received a Mortgage Survey indicating that rates were up about a half percent in 2017, and vacancy and collection losses dropped to the lowest level ever at 2.83%. Stabilized building sales dropped 32% from 2016 to 2017, to 793 buildings.

Local 32B-J building employees authorized a strike Wednesday night at a rally attended by both Governor Cuomo and Mayor de Blasio (at separate times), but the Realty Advisory Board, the industry organization negotiating the contract that expires April 20th said talks are continuing and noted that the union has voted to strike during every negotiation since 1994.

The New York City Council, Wednesday, approved legislation effective April 1, 2019 that will require every employer with 15 or more employees to conductannual anti-sexual harassment training. The training could be an online course to be developed by the Human Rights Commission.

Cynthia Nixon, who is challenging Andrew Cuomo for the Democratic gubernatorial nomination, was endorsed this week by New York Communities for Change (formerly ACORN) for her pro-tenant positions. Based on past history, Cuomo is likely to adopt a more pro-tenant stance going forward to undercut the challenge.

City Council Speaker Corey Johnson is pushing for a new homeowner tax credit for low income families, at the same time seeking tax reforms which would probably raise rates on one-two family homes.

Beleaguered NYC Housing Authority Chair Shola Olatoye finally quit this week, and will be replaced temporarily by 80-year-old Stanley Brezenoff.

ABO/CHIP members can get a discounted admission to a full day Tri-State Conference on Changes to Federal and State Regulations Governing Lead-Based PaintJune 26th.
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Facebook F*iends

Sure, Facebook lets foreign governments manipulate you, but now the social media giant is accused of fostering housing discrimination. Seems the ability to target your apartment ads to young singles with no kids, or not show it to people self-identified as Hispanic, or who “like” handicapped parking permits, could be misused.

If you didn’t protest your property tax assessment last year you didn’t share in $577 million in New York City tax savings agreed to by the Tax Commission.

$1.1 Billion in tax dollars will go to house the City’s homeless in hotels over the next three years, at an average of $174 a night (more than $5,000 a month). The City’s plan is reported to be “controversial.”

Buildings Commissioner Rick Chandler said Wednesday that he is trying to figure out how to implement new construction safety training requirements without creating records that would expose undocumented workers to federal authorities.

Fifty percent more people aged 26-34 left New York State as moved here in 2016, and more than twice as many people over 34 left than came here, according to a new analysis at the Harvard Joint Center for Housing Studies. Even Brooklyn lost population.

NIMBYs on the Upper West Side are fighting against a 51-story apartment building already under construction at 69th and Amsterdam. The Buildings Department issued a permit for the building as-of-right, but neighbors complain that the method of calculating air rights (used by the Department for forty years) was flawed. The new tower will be just three blocks north of a 60-story building.

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The Usual Emergency

There will be a rental housing emergency through April 1, 2021, according to legislation approved by the New York City Council, Thursday. The Council extended the local declaration of emergency for three more years, subject to State renewal of local authority in 2019.

The emergency in public housing continued with thousands of tenants losing heat and hot water before and during this week’s snow storm and the Governor and Mayor bickering over who will pay for repairs and manage the work, and when.

Subsidized housing programs will get increased federal aid under the bi-partisan budget deal announced this week, including more Section 8 vouchers, increased capital funds for public housing, and the option to use income averaging in determining Low Income Housing Tax Credit eligibility.

LIHTC eligibility is at issue in a Mount Vernon property where the non-profit that vetted tenants is being sued for mistakes that cost the developer tax benefits, and tenants who don’t meet the criteria are fighting eviction…a cautionary tale for other projects.

The Kushner Companies were attacked this week for allegedly failing to disclose regulated tenants in occupied buildings for which they sought building permits. Failure to check the right boxes on the PW-1 application is a common problem that was explained in detail in the November 2016 New York Housing Journal.

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No “Right” To Housing Quality

A federal judge has denied a request by New York City Housing Authority tenants to appoint an independent monitor over the Authority’s lead abatement and maintenance efforts, noting that there is no federal law or constitutional right guaranteeing “a certain quality of housing.”

State authority over NYCHA was also in play, as Governor Cuomo held press events and meetings to variously criticize the de Blasio administration, push for an independent board and construction manager to take over responsibility for dealing with lead paint and heating issues, and try, with limited success, to split de Blasio and Council Speaker Corey Johnson on the issues.

Johnson, meanwhile, this week proposed spending $2 billion over four years to build senior housing on vacant land in NYCHA developments. It is not clear how this will mesh with Mayor de Blasio’s existing plans for private development of affordable housing on the same sites.

Any new housing construction will be more expensive thanks to tariffs on steel proposed by President Trump. Crain’s New York is reporting a 10-20% increase in steel beam costs even before the tariffs have gone into effect.

New York City is rolling back 421a tax benefits for 1788 properties, ranging from condos to entire buildings, that allegedly never filed final certificates of eligibility. Owners have until May 1st to clean up the record.

About 48% of new Manhattan, Brooklyn and Queens leases in February had some sort of landlord concession, according to the latest Elliman Report by Miller Samuel. Owners are getting creative with offers of reduced security deposits, free cable and wi-fi, and incentives for tenants to bring their friends to a building.

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Mayor de Blasio responded honestly, Monday, to a radio interviewer’s question about “affordable housing”. “ ‘If you are saying ‘100% affordable,’ you are saying ‘all taxpayer-funded.’ Let’s be honest about this,’ ” the Mayor said.

The City Council Housing and Buildings Committee will hold a public meeting March 19th to decide if a 3.63% rental vacancy rate means there is still a “housing emergency.” The latest Housing Vacancy Survey also shows a 7.4% vacancy rate for apartments with rents over $2,000 a month, and 8.74% for apartments with rents over $2,500. The survey authors also made a judgment that more than 78,000 apartments being renovated or awaiting renovation are “unavailable to rent.”

Politicians continue to pile on the New York City Housing Authority for failure to maintain heating systems or deal with lead paint problems. The State Senate Independent Democratic Conference compared the lead situation, hyperbolically, to Flint, Michigan’s water woes, and tenants announced a lawsuit to have the courts appoint an independent monitor for the Authority.

If you want to turn thin air into housing in the West Chelsea neighborhood, the City is willing to sell you air rights at $625 a foot.

And if you have a private site that might be suitable for modular housing construction, HPD will consider expediting approvals for affordable components.

Sticking to the subject of affordable housing, a court decision reported this week in DD 11th Ave. v. Sands stood up for the proposition that someone who claims they make $25,000 to qualify for a $722 a month apartment should not really make $238,000 or more.

In Royal Terrace v. Singh, also reported this week, the building owner got possession of a stabilized unit and a judgment for eleven months rent after seven years of litigation over whether the unit, a garage space, was stabilized and whether it could be used for storage.

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