Lead Time

The New York City Council holds hearings Tuesday on a package of lead bills, opposed by CHIP and ABO, that would require property owners to abate all apartments on turnover (as opposed to current interim controls), test and abate soil outside buildings annually, and lower the allowable lead in paint tests so that previously cleared properties might be subject to new abatement requirements. This despite new reports this week that the number of children with elevated blood lead levels continued to decline in fiscal 2018, down 11 percent.

The Department of Housing Preservation and Development finalized rules for a speculation watch list, to be posted online beginning October 27th, that will highlight buildings acquired at any cap rate below the borough median for the prior twelve months. The theory, apparently without any particular evidence, is that this will be an indicator of likely tenant harassment.

NIMBYs (and tenant activists) may complain about traffic, displacement, gentrification, and architectural integrity, but what really irks them is developers making money, according to a new research report from UCLA. Opposition to new development proposals increased by 20 percent when test subjects were given the argument that a developer was likely to earn a large profit from a building.

The latest tariffs on Chinese goods will add $1 billion to the cost of housing production, and additional levies set for January will bring the tally to $2.5 billion, according to the National Association  of Homebuilders. Products affected include granite, portland cement, framing lumber, cast iron pipe, nails, kitchen cabinets and electrical fixtures, among others.

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Primaries Next Thursday

State primaries on Thursday could offer a view into what may happen in the November elections. We’ll be watching and will report to you.

Zephyr Teachout, endorsed for Attorney General by the New York Times this week, has expressly called for targeting the real estate industry.

More than $1.5 billion in Buildings and Sanitation fines are unpaid, according to a report this week, not counting $500,000 just levied on the Kushner Companies for failing to check the box that they had stabilized or controlled tenants on building permit applications.

Another $285,000 in fines was just levied on building owners accused of illegal short-term rentals through Airbnb, although the largest amounts seem to be against an SRO disputing whether its use is illegal and a single-family homeowner.

DHCR updated five fact sheets concerning new leases and renewals on its website Thursday, including:

  • Fact Sheet #5: Vacancy Leases in Rent Stabilized Apartments – [ PDF ]
  • Fact Sheet #26: Guide to Rent Increases for Rent Stabilized Apartments in New York City – [ PDF]
  • Fact Sheet #31: Guide to Rent Increases for Rent Stabilized Apartments in Nassau County – [ PDF]
  • Fact Sheet #31a: Guide to Rent Increases for Rent Stabilized Apartments in Rockland County – [ PDF]
  • Fact Sheet #31b: Guide to Rent Increases for Rent Stabilized Apartments in Westchester County – [ PDF]

Westbury, on Long Island, has begun the process to rezone 25 acres near the LIRR station for transit oriented development.

A Westchester single-family home development is suing the State for permission to convert to condominium status solely to get its property taxes reduced. The case has wider implications for the taxation of apartment buildings, as it fuels arguments by legislators who have already proposed eliminating the assessment of coops and condos as if they were rentals.

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Public Housing Predictably Poor

Rent Stabilized and market rent housing quality has been steadily improving, but public housing not so much, according to an analysis of 2017 Housing and Vacancy Survey data by the Citizens Budget Commission.

Democrat Assemblyman Brian Barnwell and Senator Michael Gianaris apparently think Rent Stabilized housing is too good and want to eliminate Major Capital Improvement Rent Increases. They’ve filed a rather confusing bill that would eliminate MCIs retroactively and give the State Division of Homes and Community Renewal discretion to grant unspecified tax credits for unspecified improvements instead.

Meanwhile, during Wednesday night’s Democratic Gubernatorial debate, Cynthia Nixon and Andrew Cuomo vied to sound more pro-tenant, with Nixon calling for universal rent control while Cuomo called for raising the high rent decontrol rent threshold and attacked NYCHA.

New requirements to distribute Fire and Emergency Preparedness Guides to tenants in New York City by October 1st have been delayed until April 30, 2019. Existing fire safety posting requirements are being changed, however, and new signs will be required as of October. Look for an email blast from CHIP with more details next week.

The new owners of a lower Manhattan building discovered that a dead rent stabilized tenant had been renewing her leases for twenty years. They are trying to evict the man who signed her name and used the apartment as an illegal office.

Mayor de Blasio announced that the City is beginning the rezoning process for development of 4.5 million square feet of commercial, academic, cultural, and institutional space on Governor’s Island. No residential use is foreseen.

Governor Cuomo has signed legislation requiring marshals to look for and provide for the safe removal of pets when performing evictions. The law stemmed from a case where a marshal apparently didn’t notice a pit bull.

It turns out that activists opposing new housing for fear of gentrification have it backwards. The more housing gets built, the fewer people are actually displaced, according to new reports.

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Universal, or Something

Democrat Gubernatorial hopeful Cynthia Nixon and Lieutenant Governor candidate Jumaane Williams called for universal rent control this week, but had trouble defining it. Tenant groups statewide are making the slogan a rallying cry.

Anita Laremont was appointed Executive Director of City Planning, Wednesday. She has been general counsel to the Planning Department since 2014 and was heavily involved in drafting mandatory inclusionary zoning and the midtown East plan.

The best new interactive map of the week comes from the New York City Department of Buildings. You can click on the location of every new building permit or Alt 1 building enlargement permit and get all the details.

A family needs to earn $103,235.16 to afford the median priced New York metro area home according to an HSH.com analysis. We’re number 7. You need $274,623.19 to afford the median priced San Jose, CA home and $109,411.27 for a Boston area home. It’s all in the metro vs. city calculations, with the New York area median home price only $410,500 vs. San Jose’s $1,405,000.

How hard is development in the New York metro area? Southampton Town is buying an old motel and planning to resell it for condo development with all permits and plans in place—because prospective private buyers were scared off by the Town permit and planning process.

When you can’t build in a town, however, one possibility is to build a new one. There are at least six developments in the Hudson Valley built, or planned to be, effectively, mini-cities. “Live, work, play” is the design idea.

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Four Years=Four Years

The industry won a major victory upholding the 4 year rule in overcharge cases in the matter of Regina Metropolitan, in which CHIP played a key role.

The Inwood rezoning approved last week apparently had an element ofcommercial rent control quietly inserted. New developments with more than $2 million in assistance from the City Department of Housing Preservation and Development will have to designate up to 5,000 square feet to be rented to businesses with ten year leases and limited rent increases.

Environmentalists and real estate organizations announced agreement this week on plans to reduce energy consumption by buildings in New York City by 20 percent by 2030, with a special carve out for rent stabilized and subsidized housing. In an attempt to avoid Major Capital Improvement rent increases, stabilized buildings will be asked to take limited energy saving measures instead of shooting for percentage savings.

The State Division of Homes and Community Renewal this week postedsummary rent guideline increases for New York City, Nassau, Westchester, and Rockland counties.

Supporters of a California referendum to expand rent control got a $10 million boost from an AIDS Healthcare Foundation with a contradictory record of calling for affordable housing and fighting new housing development.

HUD, meanwhile, is looking at revising its controversial Affirmatively Furthering Fair Housing efforts to attack local zoning that limits housing production.

As lower and lower blood lead levels are used to trigger paint inspections, other sources of lead seem more likely to be the actual cause. Consumer Reports,Thursday, issued a report identifying lead and other heavy metals in common baby foods.

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Inwood is Up-Zoned

The New York City Council, Wednesday, approved a rezoning of the Inwood area of Manhattan, allowing about 3,900 more apartments to be built than previously permitted. Two thirds of the units would be ‘affordable’ under various programs.

Mayor de Blasio this week signed legislation putting tough new reporting requirements on Airbnb, in an attempt to limit illegal occupancies.

Thousands of tenants in buildings owned by Steven Croman are eligible to share in an $8 million restitution fund to compensate them for harassment, whether they were harassed or not. They can qualify for having lived in one of his buildings sometime between 2011 and 2017 according to the State Attorney General.

Freddie Mac is taking a different approach to housing affordability, offering to trade low interest mezzanine loans for ten years of voluntary rent limits.

A new economic snapshot released by the Department of City Planning reports that, outside of New York City, the labor force of 25-54 year-olds is growing exclusively in New Jersey along rail corridors with access to the City. In fact, since 2000, Northern New Jersey added 230,000 more housing units than jobs and the City added 253,000 more jobs than housing units.

The State Division of Housing and Community has posted updated Fact Sheets on Security Deposits and Demolition.

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“Racial Impact Study” Not Required

A State Supreme Court Judge has rejected arguments that the City should have done a racial impact study before approving the rezoning of the Broadway Triangle site in Brooklyn for 1,146 units, including 287 affordable units.  The project “will probably extend a predominantly white area (Williamsburg) closer to black (Bedford-Stuyvesant) and Hispanic (Bushwick) areas,” the judge acknowledged, but “This appears not to be the result of some nefarious midnight plot but, rather, the inexorable, on-the-ground realities of population growth (Hasidic) and income disparity (White compared to People of Color).”

The 2014-15 development bubble caused by building code changes and the legislative cliffhanger over extension of 421-a tax benefits resulted in a sharp drop in building permits filed for the next two years, but filings for the first half of 2018 are more than double 2017’s. We’re on track for about 30,000 new apartment units to be filed by year end according to New York Yimby.

The New York City Housing Authority is different from private housing. Following federal directives, it implemented a no smoking in apartments policy this week and was apparently able to force tenants to sign lease riders accepting the change under threat of eviction.

On the other hand, NYCHA doesn’t follow all directives. This week’s public housing scandal is that managers directed water tank inspectors not to report dead birds and homeless people polluting their tanks.

Rezoning Inwood for higher density development took a major step forward this week with approval by a Land Use subcommittee after local Councilman Ydanis Rodriguez negotiated an exemption from the changes for the core area around Dykman Street, 207th Street and Broadway that was most likely to interest developers.

In a nod to the 21st century, a Housing Court judge has granted a building owner in Renaissance Equity Holdings LLC v. Webber (New York Law Journal, subscription required) the right to discovery regarding the social media accounts of a person claiming succession to see if they indicate where she was living during the relevant time period.

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Damned if you do…

Mayor de Blasio has announced the creation of another Anti-Tenant Harassment Unit targeted a“maintenance harassment.” At the same time, HPD announced a new Partners in Preservation program to fund local community groups to fight tenant displacement from new investments in a neighborhood. Apparently, City policy has returned to the days of Fort Apache, or maybe just bring private housing down to the public housing standard.

On the other hand, the Mayor admitted his ignorance of housing policy in a deposition intended to get him out of testifying in a case accusing the City of fostering segregation with location preferences for affordable housing applicants.

Meanwhile, Governor Cuomo called out New York City Housing Authority managers for falsely reporting repairs done when they failed to get access to tenant apartments. Then NYCHA admitted failing to comply with more federal rules than previously disclosed.

A federal bankruptcy judge has ruled that 17 loft tenants who haven’t paid rent in 25 years can’t be evicted or forced to take buyouts while their building goes to a foreclosure auction.

Citywide median asking rents for one bedrooms were $2,860 and two bedrooms were $3,220 in June, down 3-4% from the same time last year according to a report by apartment search site Zumper. A neighborhood by neighborhood analysis shows rents fell 7% in the financial district but were up in every area of the Bronx.

Two medical researchers brought a dose of reality to the “lead poisoning” debate in a Times Op-Ed noting that today’s “level of concern” for blood lead levels is one third the average for children nationwide in the 1970s and not poisoning by any standard.

NY Post Columnist Lois Weiss, who served on a 1993 property tax reform commission, reported on the first meeting this week of the fourth such commission since 1989…without much optimism about actual reform.

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Book ’em and Report ’em

Airbnb and other booking services will have to provide New York City with monthly reports of the addresses, length of stay, cost, host name, and other details of short-term stays under legislation passed by the City Council Wednesday and expected to be signed by the Mayor.

Meanwhile, the National Apartment Association has joined an appeal against Airbnb in federal court, trying to establish the right of property owners to decide if tenants may use the service.

City Comptroller Scott Stringer issued a report this week decrying the high cost of security deposits and proposing statewide legislation to limit deposits to one month on all properties and require owners to offer installment payment plans for deposits. While highlighting that the median advertised rent in New York City in 2016 was $2695, the report also mentions that the average rent actually paid by new movers was $1690.

The New York Times reports that the City will propose combining all its rental assistance programs for the homeless into one system, to eliminate confusion and resistance to accepting tenants by building owners. Details of the combined program are not yet available.

Score another victory for NIMBYs who convinced developers planning 120 units, including 36 affordable apartments, in Elmhurst to build just 77 market rate units instead. Ironically, the City Planning Commission approved the larger building just days before opposition from the local Councilman killed it.

A legal challenge to local preferences for new housing has been filed against the Town of Eastchester. Advocates claim that giving a preference to Town residents for new senior apartments being built perpetuates segregation because the Town is mostly white. Similar cases have been brought in New York City and around the region, threatening one of the tools politicians use to convince neighborhoods to accept new development.

The City Store has just released the 2018 Zoning Handbook, an illustrated alternative for lay people who may not be able to face the full 1300 page New York City zoning code.

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You Be The Judge

Want to be a judge? The Advisory Council for the Housing Part of New York City’s Civil Court is recruiting lawyers interested in a five-year term and $187,200 annual salary to preside in Housing Court. Applicants can email Linda Dunlap-Miller at ldunlapm@nycourts.gov before September 7th, or they may write or appear in person at the Office of the Deputy Chief Administrative Judge George J. Silver, 111 Centre St., Room 1240, New York, New York 10013.

Speaking of judges, the National Association of Home Builders endorsed Supreme Court Nominee Brett Kavanaugh, having appeared before him eight times on issues of interest to the real estate industry. While they didn’t win every time, they applauded Kavanaugh’s record on “curbing regulatory overreach.”

The next drink is on the Title Insurers, after a State Supreme Court Judge threw out new State regulations that limited their entertainment budgets in an attempt to reduce rates.

At least one CHIP member is dealing with elevator violations from a private inspector that were never served properly. The contractors are required by DOB to serve the owner or agent at the location, but apparently it doesn’t always happen. If you see a violation on record that you didn’t receive, a copy can be requested at pvtcopies@buildings.nyc.gov for an $8 fee…and let CHIP know.

Toll Brothers is being sued for allegedly failing to meet Americans with Disabilities Act requirements in new construction in Long Island City and Urby Staten Island is being sued for racial discrimination after evicting or buying out several tenants of its affordable units.

We may not know much about art, but we know a tax when we see it. The latest community benefit fee taxing development around the country is a requirement to put around 1% of development costs into “public art.” An estimated 80-100 municipalities have already bought in to the idea, at property owners’ and future residents’ expense.

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