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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Council Doubles Down

More than a dozen bills increasing the penalties for false statements onbuilding permit applications, increasing public availability of information about overcharges, requiring that tenants get copies of notices of violations, increasing DOB inspections, and other provisions affecting apartment operators were introduced in the New York City Council Wednesday. Speaker Corey Johnson indicated his support for the package (Int 1280-2018Int 1279-2018Int 1278-2018Int 1277-2018Int 1275-2018Int 1274-2018Int 1258-2018Int 1257-2018Int 1256-2018Int 1255-2018Int 1247-2018Int 1242-2018Int 1241-2018).
The January 1st deadline for submitting bedbug infestation histories to the City Department of Housing Preservation and Development has been extended to January 31st because HPD doesn’t expect the online reporting tool to be available until at least December 17th.
Mayor de Blasio announced that Requests for Proposals for private management of 21 public housing projects will be issue in December. A total of 62,000 units could be involved, including several developments already in the works.
Meanwhile, the City Independent Budget Office has concluded, not surprisingly, that rehabbing public housing is cheaper than building new.  The IBO estimated rehab at $260,000 per unit and replacement with new construction at $410,000 per unit—not including land or demolition costs.
The New York City Planning Commission has begun the formal seven-month review process for zoning changes around Bay Street, Staten Island, to allow 1,800 more residential units to be built.
While the City Council mulls commercial rent control proposals, the Real Estate Board of New York reports that retail rents in 15 of 17 corridors in Manhattan have fallen an average 25% in three years. Perhaps the market is self-correcting after all.
Amazon’s plans for Long Island City appear to be just a drop in the bucket. Curbed.com has identified more than 40 residential projects already planned or in development in the neighborhood.
Westchester County has passed legislation requiring Co-op boards to report any buyer rejections to the county Human Rights Commission for investigation. New York City and New York State are both considering similar legislation.
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Sold Out

Subsidized housing developers sold out private housing owners this week, joining with tenant activists to petition the State Legislature to end luxury decontrol and eliminate preferential rents—regulations that don’t matter to their programs. Members of the New York State Affordable Housing Association are evidently more concerned with currying favor from officials that fund their programs than with private housing economics.
 
Amazon announced it would bring at least 25,000 jobs to Long Island City with roughly $3 billion in incentives from State and City sources detailed in aMemorandum of Understanding. Part of the deal was to bypass the City Council approval process, which ruffled some political feathers, but others applauded the deal which is expected to produce a net benefit in tax revenues of more than $27 billion and almost 100,000 indirect jobs.
 
Days before the announcement, the City’s Independent Budget Office reported that there was no evidence that the  Commercial Expansion Program, which provides tax incentives for job creation outside Manhattan and is part of the Amazon package, caused any employment growth beyond what would have happened anyway.
 
The Deal of the Century? The Metropolitan Transportation Authority has agreed to purchase Grand Central Terminal and Metro North’s Harlem and Hudson line tracks for $35 million from an entity that acquired the property after the Penn Central bankruptcy. There had been a 280 year lease in effect. MTA officials noted that ownership of the northern lines could create new opportunities for trackside development.
 
New York City issued violations last month to 20 individual condo owners who were putting their units on Airbnb for short term rentals. According to news reports this week, all were owners at the Atelier on West 42nd Street, where units are on sale from about $1 million to $85 million.
 
A federal judge, Wednesday, rejected a proposed consent decree calling for an additional $2 billion in funding and appointment of a court monitor to ensure that the New York City Housing Authority deals with lead, mold, vermin, heat violations. He said the requirements for action by the Authority and the powers of the monitor were too vague, and that funds were insufficient. He also noted that, under federal law, HUD was really responsible for taking over NYCHA and cleaning up the mess.
 
Why do politicians do what they do on housing policy? A new interactive map created by the Community Service Society lets you analyze rent regulated and other types of housing by Assembly and Senate district.
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Feeling Blue

Tuesday’s blue wave in New York could lead to a battle on rent regulations, with the Governor’s office confirming that he wanted to “advance additional tenant protections, including the elimination of vacancy decontrol and limiting rent increases for building and apartment improvements.”
The voters spoke directly on rent regulation in California, overwhelmingly defeating Proposition 10, which would have allowed expansion of rent controls there.
Another election result is the rise of several New York representatives toleadership of House committees that could affect the economy and housing, including Nita Lowey as chair of the Appropriations Committee, Nydia Velazquez as chair of the subcommittee on small business, and Carolyn Maloney as chair of the subcommittee on capital markets.
Amazon may be bringing 25,000 jobs to Long Island City, if the localCouncilman and State Senator can’t discourage them. Both are raising the usual NIMBY concerns. Google, meanwhile, is expanding to about 20,000 jobs in the City with less fanfare.
The December 1st deadline for construction workers to get safety certificates for 30 hours of training has been delayed until June 1st because of the lack of training resources.
The City Department of Sanitation released its formal proposal for new commercial carting zones, beginning what is likely to be a multi-year approval process. The idea is for a limited number of carters to be licensed for each neighborhood to reduce energy consumption and corruption.
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Speculative Criteria

New York City, Tuesday, published the first Speculation Watch Listidentifying buildings purchased for less than the median cap rate of all apartment building transactions in each borough. Buildings on the watch list will be subjected to increased inspections and scrutiny to prevent tenant harassment.The initial list contains 51 buildings purchased with cap rates (determined by the Department of Finance) to be below 3.345% in Manhattan, 3.129% in Queens, 3.671% in Queens and 3.665% in the Bronx between April and June 2018. The City also published a list of all the transactions considered for reference. No effort was made to look at the reasons someone might have accepted a lower cap rate, location within the borough, the investment expectations, financing, or any other more relevant information.
 
The City Council, meanwhile, rejected efforts Wednesday to transfer 13 tax delinquent and mismanaged low income co-ops to third party ownership. Council members have expressed concern for the resident shareholders losing their equity, but haven’t addressed the residents’ inability to pay or the buildings’ physical issues.
 
The Council also passed legislation amending the Building Code to require retroactive installation of carbon monoxide detectors in all commercial spaces, effective in 270 days.
 
Enforcing 2015 legislation on cooling towers seems to be a problem due to inexperienced and confused inspectors. An analysis of 15,700 cooling tower violations challenged at the Office of Administrative Trials and Hearings found that 14,000 had to be dismissed for various errors.
 
Due to software glitches, the U.S. Veterans Administration has failed to pay rental assistance to thousands of veterans receiving student assistance for two months or more, causing many to be late on rent. Mayor de Blasio has offered extra assistance to tide the vets over, so if you have a tenant who relies on VA help you can steer them to the City.
 
Not only did Manhattan come in second to Brooklyn in the number of new and converted apartments offered for sale last year, Queens is set to pass them both in the next two years.
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