Nevertheless, the Mayor wants to see an end to high rent decontrol, elimination of the vacancy allowance, and temporary MCIs. He believes 421a benefits should be modified to require 25-30 percent affordable housing components in all new developments in exchange for a 25 year tax break. A detailed report by Capitol New York on the 421a proposal implies that there would actually be little change in the economic impact for developers in the outer boroughs where the ‘affordable’ units would largely be at current market rents.
The Mayor yesterday also submitted his revised 2016 Fiscal Year budget proposal, showing a roughly 4.5 percent annual increase in general property taxes over the next few years.
An Appellate Division decision in Altman v. 285 W. Fourth LLC late last week threatens to wreak as much havoc in the industry as the Tishman Speyer J51 case did, unless overturned. The court ruled that an owner could not decontrol a high rent apartment on vacancy based on the legal rent which a new tenant would be charged, but only on the legal rent paid by the previous tenant. The courts and State regulators had always interpreted the law the other way until now. The Rent Stabilization Law currently exempts any apartment “with a legal regulated rent of two thousand five hundred dollars or more per month at any time on or after the effective date of the rent act of 2011, which is or becomes vacant on or after such effective date. This exclusion shall apply regardless of whether the next tenant in occupancy or any subsequent tenant in occupancy actually is charged or pays less than two thousand five hundred dollars a month.”
As the industry reeled from the decisions and proposals above, NYU’s Furman Center this week released The State of the City’s Housing 2014. The focus of this year’s study was population and housing density. Turns out the City has fewer people per square mile than in 1970, an average of 53,000 vs. almost 58,000. Interestingly, population density is not necessarily correlated with crowding. The Upper East Side, with a population density of 99,400 people per square mile — nearly double the city average — also offers the most square feet of living space per person, more than 600. Meanwhile, Central Harlem had a 26 percent reduction in population per square mile since 1970 and still remains the City’s densest neighborhood.