Bezos Rejects Another Extortion Attempt

Amazon announced, Thursday, that it was withdrawing plans for HQ2 in Long Island City due to local political opposition.
The preliminary New York City budget for 2020 anticipates a 6% increase in property taxes generally and more than a 10% increase in billable assessments on class 2 apartments.
 
In a side note that might be of interest to owners preparing tax appeals in Ossining, which just adopted rent stabilization, or other ETPA communities, the 2020 City Department of Finance assessment guidelines suggest that the median outer-borough rent stabilized pre-1974 apartment building is worth about 22% less than a comparable unregulated building.
 
The City Council, Wednesday, passed a bill that requires owners to absolutely correct mold, mildew and indoor allergen conditions, amending last year’s law that simply called for owners to take “reasonable measures” to correct the conditions.
 
Councilman Keith Powers introduced two bills, Wednesday, that would limit security deposits and brokers fees to one month’s rent. Both bills are brief. Read literally, it seems that the broker’s fee bill would limit the total of commissions and fees for, say, credit applications, to the value of one month’s rent.
 
The development of 9000 apartments, plus millions of square feet of office and retail space at the former Pilgrim Psychiatric Hospital in Brentwood is being stalled by the unprecedented failure of a Suffolk County Legislature committee to approve a sewer connection. The developer is suing.
 
The Oregon State Senate, Tuesday, approved a statewide rent control bill limiting annual rent increases to 7% plus the change in the consumer price index. It now goes to the State House of Representatives, which also has a Democratic majority.
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Statistics, Shmatistics

Mayor de Blasio announced Monday that, due to increased tenant legal services, evictions dropped to a record 18,000 in 2018. But, on the same day, Council Speaker/Public Advocate Corey Johnson announced an interactive map of where evictions occur showing 19,970 evictions in 2018. And, looking at the underlying database the Public Advocate map links to, the actual number was 21,811—not a record and consistent with good economic times of the past.
Crain’s reported exclusively this week on a secret deal between the de Blasio administration and Local 32BJ to require prevailing wage rates for building workers in new affordable housing over 30 units, despite the administration’s long opposition to prevailing wages in subsidized housing construction.
The leadership of the City’s housing team continued to jump ship this week with the departure of Commissioner Maria Springer-Torres from the Department of Housing Preservation and Development.
Perhaps that’s why the Mayor turned to Sanitation Commissioner Kathryn Garcia to take over as temporary chair of the New York City Housing Authority. Even she expressed surprise at the choice, and was immediately faced with new claims of previously unreported issues of lead in paint and water in Authority projects.
Governor Cuomo also issued a press release, Monday, touting Rent Connect, a new interface for tenants and owners to reach mostly pre-existing online forms at the Division of Housing and Community Renewal for rent overcharge complaints, complaints related to a decrease in services, high rent decontrol, and owner restoration.
DHCR, meanwhile, this week posted a new hard copy form for Nassau and Westchester County tenants to apply for Senior Citizen Rent Increase Exemptions.
The deadline for submitting 2017 energy benchmarking data to New York City originally due May 1, 2018 was extended first to December, then February 1st, and now to February 15th due to “technical issues.”
The Building Congress reported that local construction costs rose 5% in 2018, with premium offices running $575 per square foot (highest in the U.S.) and high-rise multi-family running $375 per foot in hard costs (actually less than in San Francisco or Chicago). More details are in the Rider Levett Bucknallconstruction cost report.
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Lead Test

Mayor de Blasio this week proposed lowering the allowable lead in paint to .5 micrograms per square centimeter, half the current level and below levels at which testing equipment is currently certified for accuracy. The City Council is also looking at a package of lead rule changes and is reportedly planning to act at its February 13th meeting.
 
The definition of “universal rent control” has been unclear throughout the campaign season, but new State Senator Julia Salazar introduced her proposal, Wednesday, providing that owners statewide cannot terminate tenancies except for just cause; must offer 1-4 year renewal leases at the tenant’s option; and establishing a rebuttable presumption that rent increases exceeding the local consumer price index by 50% are unconscionable.
 
Also, Wednesday, the Citizens Budget Commission issued a report warning that efforts to end high rent/high income decontrol and limit capital improvement increases would be a gift to 28,000 rent stabilized households with incomes over $200,000 and would hurt housing quality.
 
HUD Secretary Ben Carson, Thursday, announced that HUD and the U.S. Attorney for the Southern District would appoint a monitor for the New York City Housing Authority and require the City to appoint a new NYCHA chairperson that they approve. The agreement with the City sets lengthy timelines for correcting lead, heat and mold issues and doesn’t provide any additional federal funds.
 
The Division of Housing and Community Renewal has announced 2019 fuel adjustments for rent controlled units. All fuels cost more except for Con Edison electricity. As of Thursday, the online filing system hadn’t been updated, but the forms should be here soon.
 
The New York City Council has raised the threshold for when an income-producing property is required to provide a certified statement of income and expense in order to receive an assessment reduction by the Tax Commission from an assessed value of $1 million to an assessed value of $5 million.
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Legislative Cart Before Research Horse

Governor Cuomo introduced budget legislation (see page 415) this week calling for ending high rent/high income decontrol, repealing preferential rent provisions, and limiting major capital improvement charges “based on a report” to be prepared by the Division of Housing and Community Renewal on or after March 1st.
The Governor’s agenda, laid out in his State of the State address (pg 112 et seq), Tuesday, also includes enacting statewide legislation prohibiting source of income discrimination and limiting security deposits to one month on all apartments, not just regulated ones. He would also bar housing built with state aid from using credit scores to screen tenants.
Earlier in the week, the State Legislature passed legislation to limit political contributions by LLCs, a move aimed squarely at the real estate industry. Thebill is not completely clear, but limits any single LLC from contributing more than $5,000 and requires apportioning the contribution among members so that individual contribution limits can be enforced against members of multiple LLCs. 
The local community board on Staten Island rejected the proposed Bay Streetrezoning while the City Planning Department began the process of developing a new plan for the SOHO/NOHO neighborhood…also likely to face community opposition.
New York City, this week, filed suit against a real estate brokerage it claims earned more than $20 million from illegal rentals on the Airbnb platform. And astudy funded by the Hotel Trades Council concluded that  45% of all New York Airbnb reservations last year were illegal, accounting for 66% of revenue.
The ABO Workers Compensation Safety Group this week declared a 22.5% dividend for 2018 in addition to the up-front 25% discount applied to premiums. ABO and CHIP members are eligible to participate in the group. Contact Matt Durnan if you are not already a member.
Registration for BuildingsNY 2019, April 2nd and 3rd at the Javits Center, is now open. CHIP and ABO will be holding seminars at the Show on new environmental laws, lead paint, and Albany’s actions on rent regulations. Click here to sign up for free.
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Missing the train

North Brooklyn landlords gave up between $6 million and $26 million in rent increases since the announcement in 2016 of an L train shutdown,  according to a StreetEasy analysis. Rents along the train line fell 1.5% while rents on new leases in Brooklyn generally were up 3.3%. StreetEasy expects rapid increases now that the shutdown is cancelled.

There were permits for 32,580 multi-family units filed with the New York City Department of Buildings in 2018, beating 2017’s total of 19,180 units by 70%, according to New York Yimby’s 2019 Construction Report.

There is probably no connection, but DOB Commissioner Rick Chandlerannounced his retirement this week. First Deputy Commissioner Thomas Fariello will fill in as Acting Commissioner.

During Mayor de Blasio’s State of the City address, Thursday, he dramaticallysigned an executive order creating a new Mayor’s Office to Protect Tenants—not to be confused with myriad other City and State tenant protection units too numerous to mention.

State Senate Republicans announced that George Amedore of Rotterdam, NY will become ranking minority member on the Housing Committee. Amedore is also a Capital Region homebuilder.

Registration for BuildingsNY 2019, April 2nd and 3rd at the Javits Center, is now open. CHIP and ABO will be holding seminars at the Show on new environmental laws, lead paint, and Albany’s actions on rent regulations. Click here to sign up for free.

The Brooklyn Rent Office of the State Division of Housing and Community Renewal is moving downstairs from the 7th to the 6th floor at 55 Hanson Place, as of January 28th.
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100 Days, Really?

Governor Cuomo said “all” of his 100-day legislative goals would be included in his State Budget proposal, presumably including ending luxury decontrol and other rent rule changes even though normally they wouldn’t be dealt with before the law sunsets in June. The Budget is due by March 31st.
 
The L-Pocalypse is cancelled. The Governor announced Thursday that the L train will continue to operate weekdays during repairs instead of shutting down for more than a year as planned. Rents along the line fell in anticipation of the shutdown, so now…
 
A federal judge this week ruled that a New York City law requiring Airbnb and other booking services to report customer information might violate Fourth Amendment privacy protections. He went on to note that “An attempt by a municipality in an era before electronic data storage to compel an entire industry monthly to copy and produce its records as to all local customers would have been unthinkable under the Fourth Amendment. It would have been out of bounds on the grounds of excessive burden alone.” Presumably the judge never looked at rent registration requirements.
 
Nassau County’s tentative 2020-21 property tax assessments, the first newones since 2011, are now online.
 
Despite the defeat of rent control expansion in a referendum in neighboring California, Oregon legislators are reportedly considering how much to limit rent increases—not whether to limit them.
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Shutdown Fallout

The federal government shutdown over border-wall funding could mean late or reduced Section 8 voucher payments in January. The HUD program isn’t funded after the first of the year, but may use unspent authority from prior periods to fulfill obligations temporarily. The FHA can’t make new multifamily loan commitments during the shutdown, and the National Flood Insurance Program can’t sell or renew policies without new funding.
 
Construction-related injuries in New York City passed 2017’s total by October according to the latest Department of Buildings figures. Building is booming, and accidents are occurring on 1.5% of active job sites, Crain’s reports.
 
The wave of new housing construction is probably contributing to an 8 percent drop in residential sales in 2018, breaking a six year string of rising inflation-adjusted sales, according to the City’s Independent Budget Office.
 
Fact Sheet 11 on Demolition has been revised by the State Division of Housing and Community Renewal to reflect the increased focus on reporting regulated tenants in buildings being torn down or renovated.
 
As of January 1st, any mold assessment, abatement or remediation in a building with ten units or more in New York City must be done by a licensed professional. And new stove knob cover notices must be sent to tenants by January 5th. 
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100 Days

Governor Cuomo’s “100 Day” goals, announced Monday, include “ending vacancy decontrol, repealing preferential rent and limiting capital improvement charges.”
 
Bronx Borough President Ruben Diaz Jr. is also targetingpreferential rents, but wants to offset the loss with a tax break equal to the difference between preferential and legal. That might cost taxpayers more than tenants save, but rent regulation is complicated.
 
In this week’s episode of As NYCHA Turns, outgoing Public Advocate (and incoming Attorney General) Letitia James just discovered that the City is the City’s worst landlord; and HUD Secretary Ben Carson is reluctantly threatening to put New York public housing into receivership.
 
Meanwhile, as the City Council looks at redundant legislation to punish private owners for harassing tenants to vacate, the de Blasio administration is apparently harassing tenants to vacate an SRO building to make room for other homeless.
 
They know when you’ve been naughty, and now the City Department of Buildings knows which buildings applying for permits have rent regulated tenants. They have the State registration databaseincorporated with theirs.
 
The City Department of Housing Preservation and Development reports that it has raised $7.5 million and designated several non-profits to assist with low interest loans for down payments on low rent buildings. It’s called the Neighborhood Pillars program. Borrowing money for down payments on marginal properties…what could go wrong?
 
In case you missed it, check out the arguments for responsible ownership and responsible legislation by CHIP’s new Executive Director Jay Martin and Board Member Barbara Kraebel in the Daily News this week.
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Wholesale Legislation

The New York City Council Housing Committee held hearings, Thursday, on 37 bills aimed at increasing penalties for violations by building owners, discouraging tenant buy-outs, and making it harder to get building permits. CHIP and ABO, along with industry partners, opposed most of the proposals.

State Senator Brian Kavanagh, who represents parts of lower Manhattan and Brooklyn, will be the new chairman of the Senate Housing Committee under Democratic leadership in January.

The Furman Center released a policy brief this week on increasing legal assistance for tenants in Housing Court. The brief focused mostly on the need for better planning and training in other municipalities that are considering giving tenants lawyers, but did note that, thanks to New York City’s free legal programs, the number of pretrial motions increased 19.1 percent from 2014 to 2016 – prolonging cases and raising owners’ legal costs.

Mayor de Blasio is out with a new ten year plan for reforming public housing this week. He expects to raise $3 billion from private developers building on New York City Housing Authority sites and buying air rights, along with the sale of private management rights announced last week.

Apartment owners aren’t the only ones targeted by 311 complaints. The New York Times reports that someone has “weaponized” 311 calls with sign complaints against small commercial businesses. Over 200 calls about unauthorized signs in Brooklyn were reportedly made last month, up from 23 during the same month last year.

Waterfront development is taking on a whole new meaning on the East End of Long Island. The East Hampton Town Board is studying the legal and land use issues of moving downtown Montauk  inland, away from rising seas.

 

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Who? What?

The programmers behind tenant complaint websites heatseek.org andjustfix.nyc have launched Who Owns What to help tenants identify all the properties owned by a single entity despite multiple LLCs. Using public records and relying on office addresses, it may be more reliable at finding agents than owners.

Mayor de Blasio has announced that the City is close to acquiring 17 buildings with 729 units in order to convert 468 of the units currently used for cluster housing for the homeless into permanent residents. No prices were revealed and the City is “negotiating” with the owners under the threat of using eminent domain.

The Mayor and Comptroller, meanwhile, are battling over which taxes to raise to pay for subsidized housing. The Mayor wants to add a 2.5% surcharge on residential sales over $2 million while the Comptroller wants to eliminate the mortgage recording tax but boost property transfer taxes up to 8%. Either plan would require approval by the State.

The State Division of Housing and Community Renewal has confused owners in Ossining, where the Village recently adopted rent stabilization, by extending the deadline for initial registration and fee payments to unspecified dates. TheHCR website says they will send a letter to those affected when they know what they are doing.

It is Co-op City’s 50th anniversary and Curbed has an interesting history alluding to its multiple government bailouts and socialist roots. The early population of more than 60,000 has dropped to about 45,000 and the project is considered the nation’s largest naturally occurring retirement community.

Friday the 7th is the last day to buy discounted tickets for the International Builders Show, February 19-21st in Las Vegas. ABO members get an additional break.

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