The New York City Department of Housing Preservation and Development  is seeking to identify developers to participate in rebuilding 1-4 unit homes that were destroyed or substantially damaged by Hurricane Sandy. Responses to a request for proposals are due by June 5th.

The City Water Board late last week adopted the 5.6% rate increase proposed by  the Department of Environmental Protection, effective July 1st. Not coincidentally, the Mayor this week noted that the City had spent $20 billion on water infrastructure since 2002.

A strike, Wednesday, by about 100 attorneys and 60 paralegals employed by Legal Service of New York will likely lead to court delays. The last strike, in 1993, lasted for a month.

If you have an older building with past fire code violations you will be more likely to be reinspected as the City moves from cyclical Fire Department inspections to a risk based model.  The new model automatically tracks, scores, prioritizes, and then  schedules a building for inspection. Currently, the risk model contains characteristics including the building’s construction material, whether or not the building has a sprinkler system, the height and age of the building, last date of inspection and occupancy. The system also captures and tracks violation history and then reschedules follow-up inspections.

Thanks to Labor Law 240, the City is still potentially liable  for the 2008 crane accident on East 91st Street. The site was leased by the City to the Education Construction Fund, which, in turn, contracted with a private developer for development of apartments over a school. The City claimed it was not an owner in control of the property under the law and that damage claims against it should be dismissed. The State Supreme Court denied summary judgment, noting that the City had retained some approval of agreements entered into by EDC. Under Labor Law 240′s absolute liability standard, that might be enough to establish that the City still had control of the property. Reforming Labor Law 240 is the New York State Builders Association’s top legislative priority in Albany this year and it is getting some consideration by legislative leaders because it will likely add up to $400 million to the insurance cost of replacing the Tappan Zee bridge.

Don’t forget to reserve your seat at ABO’s June 12th luncheon at the Princeton Club featuring Barry Rudofsky, Managing Member of Bronstein Properties, on the topic:

Family Money to Institutional Money and Back

The evolution of multifamily finance in New York

Buy tickets here, or call 212 385-4949 to reserve.

RFPs for the redevelopment of the sites of two municipal facilities in the Bronx, one currently 48,000 sq. ft.. And one 78,000, were issued by the City Economic Development Corporation. Both the Oberia Dempsey and Hunts Point Multi-Service Center sites are zoned R-7.

The deadline for filing Local Law 84 Energy Benchmarking reports was postponed from May 1st to May 31st because the EPA Portfolio Manager website where the reports have to be filed was down at the deadline.

A Queens owner will have to pay $75,000 in compensatory damages and a  $125,000 fine for refusing to  provide handicapped access to a tenant’s apartment  according to a State Supreme Court decision in Marine Holding v. NYCCHR. The case was dragged out for  four years and included a recommendation  in the owner’s favor by an administrative law judge who found both that  installing the ramp was structurally infeasible and that the tenant had refused relocation. The Human Rights Commission then overruled the ALJ.

Builders and apartment renovators have until May 24th to file for rebates on stuff they have already bought under the manufacturers rebate program sponsored by the NYS Builders Association and ABO. ABO members who buy  Delta Faucets or dozens of other common products and don’t file are leaving money on the table.

Space Wanted

ABO is looking for new office space and is willing to share. If you have space available for our three staff members, please give us a call…preferably in the Grand Central area but all possibilities are open. Thanks.

Save the Date: Next ABO Luncheon June 12th.

Invitations will be out soon.

Another RFP was issued by the Economic Development Corporation for commercial and industrial development on three sites in East New York, Brooklyn. The sites range from 2,050 to 20,850 square feet.

The Rent Guidelines Board, Tuesday, proposed Rent Stabilization Renewal Guidelines of 3.25-6.25 percent for a one year renewal lease and 5-9.5 percent for a two year renewal lease. Public hearings will be held June 13th and a final vote is scheduled June 20th for the guidelines to be effective October 1st.

The Department of State apparently thinks that Vice Presidents for Acquisitions should not be allowed to buy  property from someone claiming to be Vice President of a brokerage company, on the theory that if the broker is not really a corporate officer he or she is committing false advertising by claiming a title. I guess that rules out brokers claiming to be Colonels and Barons too. The finding came in an opinion letter. Separately, the New York State Board of Real Estate decided that the words “group,” “associate” and “realty” are prohibited when describing a sales team. The ruling was part of a larger set of  new regulations on broker advertising dealing with both advertising generally and special issues raised by the Internet. (see page 17 in this issue of the State Register for the  proposal just adopted).

In what appears to be the first decision on a commercial rent abatement sought in relation to Superstorm Sandy, a Civil Court judge this week determined in Maiden Lane Properties v. Just Salad Partners that the tenant had to bear its own liability for dealing with lost electricity under a standard Real Estate Board of New York lease.

Adolfo Carrion Jr. and George McDonald both said they would continue Mayor Bloomberg’s PlanNYC environmental initiatives; and both expressed skepticism about Landmark Preservation Commission decisions. Carrion said he was concerned that landmarking was used simply to stop development in some areas. Referring to proposals to upzone Midtown East, he said,  if the choice there is historic preservation or growth, “I choose growth.” McDonald called for more transparency at the Commission. Both candidates did say historic preservation was important, but needed to be done more thoughtfully.

Carrion called for increased residential density along subway lines and singled out the example of Westchester Square in the Bronx–a nexus of train and bus routes with mostly two story buildings. There ought to be twelve or fourteen story buildings there, he said. McDonald cited increased zoning density as an alternative or supplement to tax incentives for housing development. He also pointed to the success of waterfront projects such as the Brooklyn Navy Yard, but noted that there was no longer a reason to keep the waterfront generally  for  manufacturing and that  more should be rezoned for housing while manufacturing moved inland.

On rent regulation, McDonald said he was for free markets and would oppose repeal of the Urstadt Law because he was afraid of what the City Council would do with more power over rents. Carrion called rent control a necessary evil as long as vacancy rates were 2-2.5 percent, but expressed the hope that by limiting tax increases and increasing zoning density we could build our way out of it.

Asked about legalizing accessory apartments, Carrion said his experience with fires and overcrowding in illegal units made him a believer in strong safety codes. Coincidentally, candidate Bill de Blasio came out yesterday with a proposal to legalize  and perhaps regulate rents in accessory units in one, two and three family homes. He also announced a plan to create 90,000 new affordable housings units, mostly by requiring private developers to include them in any large projects.

The Appellate Division, First Department  yesterday threw another wrinkle into the never ending fallout from the 2009 Roberts v. Tishman case. The Court allowed tenants to maintain a class action against owners for alleged overcharges in buildings with J51 tax benefits as long as they waived any claim for treble damages. The dissent noted that the Rent Stabilization Law expressly bars tenants from waiving any rights and there will likely be appeals.

In a second report, the RGB analyzed 2012 Owners Income and Expense filings, mostly reflecting calendar 2011 expenses. Average operating costs were $1322 per unit per month in core Manhattan and $694 elsewhere. Taxes remain the highest expense.

In a case where it is hard to know if the courts or the law are crazier, the Appellate Division, First Department ruled in Branic International v. Pitt that a squatter who didn’t pay rent was entitled to stabilized hotel tenant status after living in a unit for six months. The Court noted that the law doesn’t say someone has to pay rent to gain tenancy status.

Meanwhile, the Landmarks Preservation Commission agreed to triple the size of the Bedford Stuyvesant-Stuyvesant Heights Historic District, boasting that the total of landmarked properties in the City is now  over 31,000.

Plan your day April 24th at BuildingsNY-

ABO’s Mayoral Candidate Forum on Housing Development  at 8 a.m.

ABO’s Local Law 87 Seminar : Retro-Commissioning: This Time it is Serious at 10:30 a.m.

Register for the show,  forum and seminar by clicking here.

ABO, RAM and CHIP free cocktail reception for owners and managers only from 4 p.m.- 6 p.m. on the 24th. Sign up here or call our office for information.

The Rent Guidelines Board  2013 Income and Affordability Study issued this week  determined from Census data that the median gross rent to income ratio for rent stabilized tenants was 34.9 percent while it was 33.4 percent for unregulated tenants — not quite statistically significant by my calculations. Interestingly, the report also found that non-payment  filings in Housing Court dropped 5.9 percent in 2012, to 208,000, the lowest level since at least 1983. At the same time, however, there was the highest number of evictions recorded: 28,743.  It appears that while there are fewer cases, more are going to trial.

The City Water Board this morning is considering a 5.6% increase in water rates effective July 1st.  A final vote will be held next month. Full details of the proposal will be posted online later today or Monday.

Retro Commissioning is coming and if your block and lot number  ends in a 3 you should already have hired an auditor and retro commissioning agent. Whether or not you have, you should come to ABO’s Local Law 87 Seminar at BuildingsNY. It begins at 10:30 at the Javits Center  and will explain what you need to do and how to make it pay off. Register for the show by clicking here and reserve your space at the seminar.

ABO, RAM and CHIP are also hosting a free cocktail reception for owners and managers only at 4 p.m. on the 24th. Sign up here or call our office for information. Vendors  may only attend as sponsors. Contact R.J. Palermo at Reed Exhibitions for details.

Springtime means interesting reports from the Rent Guidelines Board. The 2013 Mortgage Survey found average multifamily mortgage rates have dropped to 4.37 percent and average loan to value ratios dropped slightly to 71.3 percent. The number of rent stabilized buildings sold in 2012 was up 60 percent from the year before, to 1135.

Not only would changing midtown zoning to allow taller office towers meet business needs, as Mayor Bloomberg has suggested, but it would save energy. A new report sponsored by a diverse group including the NY State Energy Research and Development Authority and REBNY, found that skyscrapers built from 1958-1973 were such energy hogs that new buildings could more than compensate for even the energy needed to tear them down and rebuild.

The City has won an injunction against short stay promoter Smart Apartments, claiming that its operation violates zoning restrictions on less than 30 day rentals of Class A units. Smart Apartments argued, unsuccessfully, that Airbnb was getting away with it so they should too. It is true that Airbnb was co-opted by the City to help place Sandy refugees even though it was the subject of other suits and violations.

There is apparently no limit on price per square foot at the high end of the Manhattan market. New condominiums are asking and getting more than $6,000 per foot according to the Wall Street Journal — and they are pre-selling like hotcakes.

Not surprisingly, New York is one of 274 improving markets nationally reported by NAHB. These are metro markets that have more building permits, higher prices, and more jobs than at their troughs, and have sustained growth for more than six months. New York’s permit trough was September 30, 2011; price bottom was March 31, 2012; and employment  nadir was February 28, 2010 according to the NAHB report.

In what was touted as a victory for the  NYU expansion plan, a State Supreme Court justice this week dismissed complaints by rent stabilized tenants that garden space required for the plan was a required service. The ruling was without prejudice, however, and the judge noted that complainants should go to DHCR for administrative review first. She clearly anticipated a multi-year controversy.

Brooklyn alone added 60,000 people. Coincidentally, the Downtown Brooklyn Partnership just told Crains that since rezoning in 2004 the area had added 5300 apartments in 29 buildings and that another 4746 units are scheduled to come on line in the next two or three years. By our rough calculations, that means we only need about  50,000 more units in that borough.

If you are looking for financing to build, the Community Preservation Corporation is back with $250,000,000 to lend. CPC was pretty much in survival mode the past couple of years after overextending itself as a development partner in time for the crash, but now has money from Citigroup for its traditional low-income housing finance.

Meanwhile,  130,000 of those who (probably) already live here, in co-ops and condos, got notices in the mail this week that they would lose their tax abatements because they are not primary residents. At least that is what the Department of Finance thinks. The number represents more than a third of all co-op and condo owners and will have a dramatic effect on maintenance fees for taxes in many buildings if Finance is even half right.

Enough to make you want to leave town? The National Renewable Energy Laboratory (NREL) and Professional Testing, Inc. are seeking participants for a three-day workshop in Denver, Colorado, to inventory the tasks and skills required for workers in the multifamily housing sector.  Some travel expenses provided.  The idea is to develop a list of skills in these four job categories:
Building Energy Auditor
Building Operator
Project/Program Manager
Quality Control Inspector
Denver is nice.

How important is a Mayor to real estate? The Lobbying Commission just issued its annual report for 2012 and the top ten lobbying clients were all pushing development projects. Major League Soccer topped the list, spending almost $1.7 million to push for its stadium plan. Atlantic Yards rounded out the top ten with about $450,000 in lobbying expenses.

If your projects depend on FHA insurance, you may need a sharper pencil. The FHA announced that due to congressional inaction on the budget they will run out of insurance authority on March 27th and anything in the pipeline without a firm commitment already is probably out of luck.

Even if Congress gets its act together, the hits keep coming for multifamily finance. The Federal Housing Finance Agency just issued a plan for Fannie and Freddie to reduce their new unpaid principal balance commitments in 2013 by ten percent. That translates to about $6.4 billion less in multifamily lending.

Glub. Department of Buildings Commissioner Robert LiMandri told a Schack Institute panel this week that the City is planning for a 27 inch rise in sea level by 2050. The Holland Tunnel mouth is currently 2 inches above sea level.

At least there is still time to take our Registered in Apartment Management class starting March 13th. Make sure your staff knows. Any one interested should contact olga@registeredmanager.com