Thirsty?

The Appellate Division, First Department, yesterday agreed that water rates for 2016-17 should continue to be frozen for all, rather than increased for multifamily customers so that single family homeowners could get a credit. The Mayor’s plan for the homeowner credit at other ratepayer’s expense was arbitrary and capricious, according to the decision in Prometheus Realty vs. NYC Water Board.

The Mayor plans to spend $93 million more in tax dollars over the next five years for lawyers for tenants in Housing Court.

Meanwhile, the City Council, Wednesday, passed a package of bills intended to make it harder for the Police to evict tenants committing nuisances such as drug dealing. The Mayor is expected to sign them.

Another bill passed Wednesday would require building address numbers to be put on all public entrances to a building. If a building has addresses on two streets, the appropriate number for that street will be required. If the address is only on one street, a public entrance from the other street would need both the number and street name from the official entrance. The Mayor is expected to sign the bill which would take effect for existing buildings in one year.

State Department of Environmental Conservation inspectors are reportedly out enforcing new rules adopted more than a year ago that changed the definition of “underground storage tank” to a tank that “has ten

percent or more of its volume beneath the surface of the ground or is covered by materials.” This apparently includes many tanks previously thought to be above ground, so check with your oil company if you have any question.

Jamie Rubin, Commissioner of the State Division of Homes and Community Renewal, has been tapped by the Governor as the new Director of State Operations. A new DHCR Commissioner hasn’t been named yet.

State Senator Bill Perkins is resigning his seat after winning a special election for City Council, Tuesday, altering the Democrat-Republican balance in the State Senate at least through budget season.

The Court, this week, awarded apartment owners damages for the unconstitutional taking of their property by rent regulation. The Court was the European Court of Human Rights and the constitution was the Czech Republic’s.

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West Wind More Costly

The Post reported this week that  the average price for air rights in Manhattan in 2016 was $292 per square foot, up from $277 in 2015. The City wants a piece of the piece over Broadway theaters, proposing that it get 20% of any air right sales and that theaters be required to charge a minimum $346 per foot. That contrasts with the $78.60 per square foot  minimum the City proposed for midtown east, where 20% would also be claimed for City coffers. Apparently, air prices may change with the wind.

The Furman Center came out, Wednesday, with a report saying the Governor’s new 421a proposal would cost the City up to $5.7 million more for a 300 unit affordable building in downtown Brooklyn than the 421a program that was adopted for 2016, but suspended until a wage agreement could be worked out. By implication, the new proposal is also more costly to the City than the old program that expired in 2015. The report, however, doesn’t even attempt to analyze which of the plans would produce more affordable units or more units overall.

It is time to register for BuildingsNY, sponsored by CHIP and ABO, March 21-22. We’ve arranged a keynote presentation at 8:45 a.m. on the 21st by Jerry Howard, CEO of the National Association of Home Builders, giving us the latest news and projections on Trump administration policy that will affect housing.

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PSC Intervention Pays Off

Con Edison rates will be going up less this month than requested thanks, in part, to CHIP’s intervention in the State Public Service Commission rate setting proceeding. This was the first time CHIP took part in the process. Con Ed had sought an 8.2% gas rate increase and 4.5% electric increase. First year increases under the approved tariff will instead be 2.3% for gas and 1.6% for electricity. Con Ed will also be required to provide automatic upload of benchmarking data by the end of the year, without charge.

CHIP, this week, filed an appeal with the State Department of Labor to update the amount of rent that can be included in calculating compensation under the state’s new minimum wage laws. The law allows an owner to add a rental value for a super’s apartment into the total compensation reported for compliance with wage laws–but the rental value is set at the 1975 rent. We are prepared to litigate if the number isn’t changed.
We were also active in court this week, as oral arguments on motions were heard in Portofino vs. DHCR. CHIP is one of the plaintiffs challenging the January 2014 amendments to the Rent Stabilization Code that established the Tenant Protection Unit and changed the formula for certain rent calculations retroactively.

Because of the higher purchase prices for condos receiving 421-a benefits, condo buyers in Manhattan spend on average 53 cents to 61 cents for each $1 of tax savings, according to the City Independent Budget Office. Condo owners in the rest of the city spend on average 42 cents to 50 cents for each $1 of tax savings, the IBO said in a new report. Somehow, the IBO concluded that the difference between the tax savings and the premium was a “wasted” benefit instead of part of the incentive value for developers to risk building in the first place.

The IBO’s argument, however, meshes neatly with Mayor de Blasio’s argument against continuing 421-a benefits for condos and his call for a new “mansion tax” on apartment sales over $2 million to support affordable rental development.

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Pay More

Class 2 billable assessments will go up 10.5% for fiscal 2018, beginning in July, under the Mayor’s latest financial plan released Tuesday. Estimates are that almost one quarter of that might be due to new construction and improvements, but look for close to an 8% tax hike on existing apartment buildings.

DHCR published 2017 fuel adjustments for rent controlled apartments, Monday, with decreases for National Grid firm gas customers and increases for other fuel and billing types. Owners with National Grid  firm gas have to file the RA 33.10 forms and serve tenants within 60 days or lose their entire fuel adjustment…but, typically, as of this morning, the new numbers and online forms weren’t online. They will be here, eventually.

DHCR has published updated Forms  HRVD-N – Notice of Apartment Deregulation Pursuant to High Rent Vacancy and  RA-93 CF – Income Certification Form to reflect the 2017 Deregulation Rent Thresholds. The threshold remains $2700 in New York City, but varies in ETPA counties. Still, even in New York City, the new forms should be used.

The poor developer’s Hudson Yards? The Economic Development Corporation  has issued an RFP for a mixed use project  including housing on a 58,000 square foot site over rail yards in Long Island City.

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New HPD Commissioner, 421-a Bill

Maria Torres-Springer will take over from Vicki Been as commissioner of HPD, February 6th. Torres-Springer was president of the New York City Economic Development Corporation. Been goes back to NYU. James Patchett, chief of staff for Deputy Mayor Alicia Glen, will take over the reins at the EDC.

Tentative 2018 assessments released this week show a 10.5 percent citywide increase for Class 2 properties. Brooklyn buildings had the biggest increases with Class 2 assessments soaring 15.71 percent. The Department of Finance reported that about 25 percent of the Class 2 market value increases came from new construction and improvements. Apartment buildings owners have until March 1st to file challenges with the Tax Commission.

More new housing construction is the goal of the Governor’s latest 421-a tax incentive bill, introduced early this week. REBNY and the Construction Trades Council reportedly agreed on the terms, which set minimum wages for projects over 300 units in core Manhattan and the Brooklyn-Queens waterfront but provide deeper benefits than the old program for all projects citywide. However, neither Senate nor Assembly leaders have signed off yet, and the Governor did not wrap the issue into the budget bill, also introduced this week, that they may focus on first.

Construction safety is also in the news, with the City Council reacting to recent accidents and union pressure with a package of bills.  A spate of articles feeding the debate highlighted reduced federal enforcement, increased city enforcement, and debate over causes and solutions ranging from simply increased construction to the effects of project size.

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Source of Income Cases

Five large property owners and managers were charged with source of income discrimination by the City Department of Human Rights, Tuesday. The cases involve alleged refusal to accept testers with Section 8 or LINC, although all the properties appear to have subsidized tenants.

Seven National Grid employees and 26 building owners or managers were among 37 people indicted yesterday by the Brooklyn District Attorney in a scheme allegedly involving $1300-$2500 payoffs to get gas meters installed in new or renovated apartments without completing required Buildings Department inspections and safety sign-offs.

Feeling the pain? Commercial property taxes, not including taxes on single family homes, co-ops or condos, rose 24.4% from fiscal 2013 to fiscal 2016 according to a report issued this week by REBNY, and the Wall Street Journal calculated the 2013-2017 hike at 29.3% — but the Mayor’s office is happy that the tax rate hasn’t increased, just assessments and revenues.

Governor Cuomo delivered six regional State of the State speeches this week, but never once mentioned dealing with the 421-a tax incentive for new housing that filled headlines all last year.

Did you forget all Mayor de Blasio’s proposed rezonings for higher density development? City Limits published a wrap up with the status of the twelve announced so far.

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New Assembly Housing Chair

Assemblyman Steven Cymbrowitz, D-Sheepshead Bay, was named new chair of the Assembly Housing Committee yesterday. A former Assistant Commissioner of the Division of Housing Production and Finance for HPD and Deputy Commissioner of Development at HPD, Cymbrowitz is the first Assembly Housing Chair in memory with any housing experience. No word yet on if the State Senate will make any committee changes.

Housing will continue in short supply if the construction pipeline doesn’t reverse course. NY Yimby’s 2016 New Construction Report, released this morning, shows drastic declines in building permits vs. 2015 in all boroughs and a 70% decline in Brooklyn since the 2014 peak.

The City Planning Commission this week formally began the review process for rezoning Midtown East to encourage larger and more modern office buildings, an idea launched in the Bloomberg administration that was stalled by landmarks issues, among others. After filing the new plan, Planning Commissioner Carl Weisbrod announced that he was retiring and Marisa Lago was appointed as his replacement.

The NY Police Department monitor charged by the courts with overseeing department responses to lawsuits on Stop and Frisk and the Trespass Affidavit Program (also known as the Clean Halls program) has approved a training video that expressly says that, with an apartment building owner’s permission, patrolling officers can arrest people who have no reason for being in a building and don’t leave when requested.

Commercial carting companies this week staffed a new lobbying effort to fight Mayor de Blasio’s plan for zoned garbage pickup, restricting carters to franchise areas.

The California Apartment Association has filed constitutional challenges to rent control ordinances recently adopted by referendum in Mountain View and Richmond, CA, highlighting a new right to sublease as improperly taking the owner’s control of the property.

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Year Ends With Fake Housing News

It is probably fitting that the last major housing story of 2016 falls under the heading of fake news. Pro Publica published an exposé this week of  Governor Cuomo’s failure to get more than about half the 50,000 deregulated J51 units back into stabilization…but they apparently failed to understand that rent registration totals include additions and deletions for other reasons.

DNA Info reports that the City is near settlement with almost 12,000 SCRIE tenants that sought to roll back their rent contribution after failing to certify and then requalifying at a higher base rent. Their argument was that the failure to recertify was a result of disability and the City is trying to figure out how to make adjustments.

The new year is bringing a higher minimum wage beginning at midnight tomorrow. Companies in New York City with 11 or more employees will have to pay at least $11 an hour, $10.50 for smaller companies, and  lesser amounts in various other counties.

And, by Sunday, signage on single occupant bathrooms in public areas will have to be gender neutral. No more men’s or ladies rooms if there is just one stall.

Happy New Year.

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Affordable, and Enviromentally Friendly and more

HPD has issued a request for proposals for 200 affordable apartments on one of the largest City owned sites left in East New York. The Mayor would also like to see the inclusion of “quality commercial and community use” as well as “open space and environmentally friendly features,” along with local hiring for construction jobs.

Complying with existing and proposed laws that require ignoring criminal histories in employment may be less hazardous, financially, thanks to a new State insurance regulation requiring insurers to provide liability coverage for actions by ex-cons, effective next July.

A proposed bill in the City Council aimed at giving tenants evidence for heat complaints may give owners a financial incentive–$50 for each living room sensor–to install building management systems.

Building owners are responsible to eliminate bedbugs, but the Civil Court in Westchester decided that they are not required to use a more expensive extermination method favored by a tenant.

As of this minute, no special legislative session has been scheduled in Albany to deal with 421a, affordable housing spending, ethics, ride-sharing upstate, or a legislative pay raise, but Governor Cuomo is saying none of these issues are complicated so anything can happen.

It didn’t just happen this week, but it has been an interesting year for  housing data analysis in New York City. Various studies have calculated that the length of the commute is worth $56 a minute in rent; that Uber may be changing that calculus for neighborhoods without mass transit; and that taxi pickup and drop off times and location can predict gentrification–watch out Ocean Hill, Brooklyn.

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We Have a Winner, But…

Democrat John Brooks was officially declared the winner of the 8th State Senate District race yesterday, confirming that Republicans only hold the “majority” in the State Senate with the support of Brooklyn Democrat Simcha Felder and/or the seven member Independent Democratic Conference.

The City Council, yesterday, approved a $100 million air rights deal to allow five mixed use towers on the St. John’s Terminal site and restore Pier 40 as a park. In a pre-condition for the deal, the Landmarks Commission, Tuesday, approved the Sullivan-Thompson Historic District sought by the local councilman, Corey Johnson, to stop other development in the neighborhood.

The City Planning Commission, meanwhile, is trying to expand development with a new study of the Southern Boulevard corridor in the Bronx…the next target of Mayor de Blasio’s plan to raise development densities.

The City Economic Development Corporations this week posted a Request for Proposals for mixed use development of a 42,500 sq. ft. site in Far Rockaway and a Request for Expressions of Interest in an 80 acre former hospital site on Staten Island.

Whatever land uses are approved, it will be easier to map them and overlay demographic and housing subsidy data with Coredata, a new online research tool from NYU’s Furman Center.

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