The rent guidelines season began yesterday with the appointment of three new members to the nine member Rent Guidelines Board by Mayor de Blasio. The two new ‘public’ members include a liberal law professor and the policy director for Local 1199 which supports a rent freeze.

Meanwhile, the Rent Guidelines Board issued its annual income and expense report based on owners’ 2013 I&E filings. The headline was that net operating income increased slightly. The average collected rent, interestingly, was almost 25 percent below the legal regulated rent, a gap that has been widening. The average monthly operating cost of a stabilized apartment in 2013 was $884, of which $235 was property taxes and $99 was for utilities, mostly City water.

No borough is pushing for housing development more than the Bronx, where the City and Borough President have singled out existing sites that are underutilized and ready for construction in addition to large swaths ripe for rezoning. City Limits magazine has just mapped many of the available locations and BP Ruben Diaz Jr. will discuss the opportunities and obstacles at the BuildingsNY keynote April 28^th.

It would be hard to overestimate the importance of apartment operations and development to the New York Metro area, and a new national study of the industry reports some pretty significant numbers for the region: almost $9 billion in operating expenses, more than 46,500 direct on site employees, and over 113,000 jobs overall.

You cannot force the New York City Housing Authority to approve Section 8 rent increases equal to rent stabilized guidelines, but you can force them to issue a decision on requests for increased rents or a reinstatement of benefits, according to an Appellate Division decision in Flosar Realty et al. vs. New York City Housing Authority.

The U.S. Court of Appeals for the Second Circuit this week accepted the NY State Court of Appeals opinion that a rent stabilized lease is a public assistance benefit, ruling that therefore the lease could not be sold as part of a bankruptcy estate. The decision simply referenced the NY opinion without further analysis. While unfortunate for property owners whose tenants declare bankruptcy, the decision leaves open the possibility of a new constitutional challenge to rent controls based on who should pay for public benefits.

A Presidential Executive Order on flood risk management standards could be read to block FHA and HUD housing programs in the 500 year flood plain, covering much of the Brooklyn, Queens, and Staten Island shorelines and miles inland, according to an analysis by NAHB. The administration says the intent is only to block direct federal expenditures in the zone, but NAHB is working to get that in writing.

Owe taxes? The  City Department of Finance has issued a new lien list for a sale May 15th. Based on past errors, it pays to check if your properties are included.

Why does it cost so much to build in New York? Maybe it is the cost of lobbying to get anything approved by government. The City Clerk’s latest annual lobbying report shows that three of the top four lobbying clients in New York City in 2014 –spending a combined total of about $3 million — were developers. As Crains noted, land use attorneys are considered a lobbying expense under the law.

We are pleased to announce that Purnima Kapur, Executive Director of the City Planning Commission, will deliver the second day keynote at BuildingsNY, April 29th, on “The Mayor’s Housing Plan: What, Where, and When” Register to attend now.

The rental vacancy rate in New York City as of April 2014 was 3.45 percent according to the Housing Vacancy Survey results released this week. Some of the other statistics from the triennial survey were less expected, however.  Although the press has been full of stories recently about foreigners buying up Manhattan condos to keep vacant as investments, the study found that the number of such units declined by 10,000 in the past three years. The vacancy rate for apartments renting for $2,000 or more is over 6 percent and over 7 percent at rents over $2500. Contract (lease) rents overall went up 3.4% in 2014 dollars since 2011 vs. 4.3% for gross rents, including utilities. The detailed tables show that the difference for gross rents was due to a 13 percent increase in utility costs.

The City Planning Department is exploring new design requirements for housing to reduce construction costs, maximize use of floor area, incorporate modern technology and perhaps improve appearances. A detailed proposal is out for comment. The Department also this week released the results of a survey on transferable development rights to promote discussion on changes to existing rules that have not worked as intended, particularly for landmark sites.

The Court of Appeals agreed to hear a challenge to NYU’s development plans with broad implications for construction on any city owned lot. The root of the issue is whether unofficially using a lot as a garden makes it a de facto public park.

In case you missed yesterday’s ABO Energy Forecast, Thom Devlin of the ABO-FS Energy Program reported that natural gas prices have fallen 34 percent since November, and that electric rates had fallen in turn. He noted that some fixed price customers were trying to blend and extend electric contracts but that they had to be careful of load charges that could reverse savings. Looking ahead, he believes gas prices will remain volatile, but stay under $4 per mmbtu in 2015, and that oil prices may loop up to $80 a barrel by year end.

The filing period for Façade Inspection Safety Program (FISP) Cycle 8 began February 21, 2015. Technical Reports filed under Cycle 8 must meet new submission requirements.

We are pleased to announce that Bronx Borough President Ruben Diaz Jr. has confirmed he will participate in the keynote panel for BuildingsNY, April 28th, on “Housing in the Boroughs: Who Wants It?” Register to attend now.

Three new RFPs are out for housing/mixed-use developments on City land at 137 Centre St. in Manhattan, St. Ann’s Avenue in the Bronx and 168th Street in Jamaica, Queens. Projects sizes range from about 100 to 300 units plus stores.

Feeling trapped in a fixed price contract with energy prices falling? There may be something you can do. Join us for ABO’s Energy Market Forecast and a discussion of energy  buying strategies, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., this Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

Airbnb may finally have lost a key case with the eviction of a rent stabilized tenant from a 421a building. “Using a residential apartment as a hotel room and profiteering off of it is grounds for eviction . . . as it undermines a purpose of the Rent Stabilization Code,’’ according to the Housing Court judge.

Mayor de Blasio announced a major initiative to help small businesses with under 100 employees, including streamlining some Department of Buildings permitting processes and making sanitation routing schedules more readily available, but not actually mentioning landlords in the category of small businesses.

Landlords were cited, however, in his announcement of a crackdown on owners who harass tenants. Attorney General Eric Schneiderman joined the press conference to note that his office had tripled the number of harassment complaints it was investigating, to ten.

The Wall Street Journal (subscription required) this morning reported another threat to Mayor de Blasio’s affordable housing plan. The U.S. Department of Housing and Urban Development is questioning whether local preferences for new units violate fair housing rules. The preference given local residents for new units is often the key to getting political approval for new developments.

It is time to register for BuildingsNY 2015. Click today.

No new taxes! Just higher old ones! The Mayor updated his Fiscal 2016 Budget plan this week, forecasting a six percent increase in the property tax levy for the year beginning July 1st due to increases assessments. Apartments and commercial properties will pay higher percentage increases on average while single family homes will pay a lesser share.

Collecting rent to pay the increase will be more difficult if the Mayor and City Council Speaker get their way. Both are proposing increase funding for legal assistance to tenants in housing court. The Speaker is also proposing a new city office of Civil Justice Coordinator to better coordinate legal service providers. Neither seems aware that keeping tenants who cannot pay the rent in place with legal maneuvers does not make housing free. Owners, other tenants and ultimately all taxpayers pay the difference.

The Manhattan District Attorney this week announced a massive scandal involving bribes for building inspections involving 16 Department of Buildings and Housing Preservation Department employees, 22 managers and owners, six expediters, two contractors and one engineer. One unregistered expediter, David Weiszer, seemed to be at the center of most of the charges.

Speaking of crime, the U.S. Court of Appeals clarified in U.S. v. Iovino that a building manager who had stolen funds from a condominium board was considered to have committed a separate crime against each unit owner when it came to counting victims under sentencing guidelines.

Just two weeks until ABO’s Energy Market Forecast and discussion of what it means for your  energy  buying strategy, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

It is time to register for BuildingsNY 2015. Click .

Six neighborhoods are now targeted for upzoning to meet Mayor de Blasio’s affordable housing goals, according to his State of the City speech this week that focused almost exclusively on housing. They include East Harlem, the Cromwell-Jerome neighborhood in the Bronx, the Bay Street  Corridor on Staten Island, Long Island City and Flushing West in Queens, and East New York, Brooklyn. The City Planning Department’s most recent proposals on East New York, the first neighborhood targeted a year ago, indicate that 7,250 apartments could be built there by 2030 versus 550 without rezoning. The Mayor also proposed a 12,500 unit affordable development above the Sunnyside rail yard in Queens, which would require cooperation from the MTA and the Governor which was not immediately forthcoming. Several reports noted that building over rail yards is expensive and would push up the cost of the housing, and that the site has also been touted in the past for a convention center and Olympic venue without gaining much traction.

Rezoning may lead to development, but not always the intended development according to the Downtown Brooklyn Partnership. In an expensive report out this week the Partnership found that the 2004 rezoning in its neighborhood led to  5,500 new apartments and another 12,750 on the way soon. The idea, however, was to spur office development along with housing and, so far, that hasn’t happened. The office vacancy rate is down to 3.4 percent, but a few new projects are finally in the pipeline.

And, as the Daily News reported this week, development and redevelopment plans can be stymied by determined opponents. AIMCO, the national Real Estate Investment Trust, was found guilty of harassment in an administrative tribunal decision last month when it applied to renovate 70 SRO units still left in a luxury Upper West Side rental. The judge found that failure to fix paint and plaster problems over time and posting rent demands on tenants doors for rent that had been paid, albeit late, was harassment. He found that complaints of actual harassment, i.e., verbal abuse, failure to maintain elevators and other services, failure to provide hot water, and unlawful construction were unfounded or not harassment…but it only takes one complaint to stick.

Join us for an important Energy Market Forecast and discussion of What It Means For Your  Energy  Buying Strategy, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

And then there were three candidates to replace Sheldon Silver as State Assembly Speaker. Carl Heastie seems to be the frontrunner over Joe Morelle of Rochester and Catherine Nolan of Queens, but as one observer noted “Beware of front runner status.” Heastie has  a reputation for not saying much about any issues publicly, but voted with Silver 98.89 percent of the time.  He has said he would fight fiercely to extend rent regulations, but his district in the Wakefield section of the Bronx has a lot of homeowners and only half the number of rent stabilized or rent controlled apartments of Silver’s lower Manhattan district.

Besides rent regulations, extension of 421a tax incentives for housing will be a key issue for the new Speaker and other leaders in Albany this Spring. City Council members are questioning if the program should be extended at all, while the Mayor’s office is talking about unspecified tweaks to help meet his affordable housing goals.

The New York State Division of Homes and Community Renewal issued 2015 fuel adjustments for rent controlled apartments yesterday. Prices went down for all forms of oil, and gas except Con Ed interruptible gas service, so owners will have to file the reductions by April 1st or forfeit the entire cumulative amount for the year.

Nationally, housing starts topped one million in 2014 for the first time since 2007 and multifamily starts represented 358,000 of the total, another seven year high and 16 percent more than 2013.

Join us for an important Energy Market Forecast and discussion of What It Means For Your  Energy  Buying Strategy, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

Residential building permit filings in the city doubled in 2014 from the year before according to a report by New York YIMBY. Applications were filed for 44,825 units, including 17 buildings over 500 feet tall, which, the report noted, is almost as many as those over that height in Boston or San Francisco now, total. In fact, 2014 permits were marked generally by larger buildings and more units per building than the year before. YIMBY also noted that 2014 filings may have been accelerated by changes to the building code that were supposed to go into effect in October and were delayed until December. New code requirements could require more space for fewer units to meet ventilation and accessibility requirements.

Governor Cuomo promised $440 million more for affordable housing in his combined State of the State and Budget presentation Wednesday. The funds come from a JP Morgan mortgage settlement and are included in the Human Services section of the presentation. The Governor also earmarked about $150 million to assist proposed transit oriented development such as the General Motors site in Sleepy Hollow and locations on Long Island, and again proposed extension of the Brownfields tax credit with significant changes.

NAHB hosted the International Builders Show in Las Vegas this week and while most of the exhibits were familiar products for single family homes, a couple caught the eye of apartment developers. Schlage and Kwikset are both offering variations of Bluetooth linked door locks that open when they recognize a tenant’s phone or fob — no key or key press required. The technology offers a web interface that permits tracking a history of who came in or out of the unit. Another tech innovation that attracted attention, on a much lower scale, was a replacement switchplate from Snap Power that acts as a nightlight or guidelight without using a socket.

ABO member Josh Sarett of ALC Environmental is warning mixed use building owners that hundreds if not thousands of buildings have failed to file required Right to Know reports with the City Department of Environmental Protection. The law requires disclosure if any of a long list of hazardous chemicals was on site for even one day. New reports are due March 1.

Join us for an important Energy Market Forecast and discussion of What It Means For Your  Energy  Buying Strategy, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

Class 2 and Class 4 tentative assessments are both up about 11 percent in the roll released by the Department of Finance yesterday. Class 1 single family home assessments were up less than 5 percent overall, but had median increases of 20 percent in some neighborhoods such as Central Harlem, Chelsea, Bedford-Stuyvesant, Greenpoint and Williamsburg. You have until March 2nd to protest the tentative numbers.

Perhaps in anticipation, Governor Cuomo announced a proposed property tax relief program, Wednesday, to rebate homeowners up to 50 percent of their property taxes that exceed 6 percent of their income. Households earning up to $250,000 would be eligible. Renters earning up to $150,000 would also qualify, with the assumption that 13.75 percent of their rent represents property taxes — although the latest research by the Rent Guidelines Board shows the percentage is really more like 20 percent in stabilized rentals.

Cuomo also announced several key appointments for his second term this week. William Mulrow, a former chair of the Rent Guidelines Board in the Koch administration, was named Secretary to the Governor. Mulrow’s first guidelines at the RGB in 1987 were 3 and 6.5 percent — considered low at the time. Cuomo also appointed former City Comptroller Bill Thompson to the Housing Finance Agency.

The Furman Center at NYU came out with the unsurprising news this week that affordable developments in better neighborhoods with higher rents were more likely to opt-out of subsidies and go to market. The study unintentionally pointed out that Furman’s Subsidized Housing Information Project database is handy for identifying projects with expiring benefits and the potential for buyouts.

The deadline for ABO’s pocket directory of Associate Members to be distributed at the BuildingsNY show April 28-29th is this month, so if you have been planning to join or renew your ABO membership, now is the time.

Join us for an important Energy Market Forecast and discussion of What It Means For Your  Energy  Buying Strategy, with Thomas Devlin, Director, ABO-FS Energy  Services , 4:15 p.m., Thursday, February 26, 2015 at the Club 101, 101 Park Avenue, New York, NY. Please RSVP to associatedbuilders@abogny.com

The EPA has proposed extending lead paint renovator recertification deadlines, currently July 1st for many, and allowing recertification with an online course. NAHB is supporting the proposal and comments must be in by February 13th.

The U.S. Senate sent President Obama a six year renewal of the Terrorism Risk Insurance Act and he is expected to sign it despite unrelated provision on financial regulation.

New City building code provisions become effective this month, including changes in stairway access, requirements for mold-resistant sheetrock, and a retroactive requirement for a publicly available tap and toilet in existing buildings that will function without electricity in case of flood or power outage a la Sandy.

The Daily News reported this week that the odds of getting one of 25 affordable apartments at the new Bedford Park Manor development in the Bronx are 2000 to 1. Ironically, the other apartments don’t cost much more. The affordable one-bedrooms are $1275 a month for households earning about $50,000 a year and the market rate one-bedrooms are only $1500. The buildings have a 421a tax break, so both the ‘affordable’ and ‘market’ units are rent stabilized.

Community Board 1’s Special Landmarks Committee wants to expand the South Street Seaport historic district to block a proposed 494 foot tower that is currently outside the district and, therefore, not subject to their review.  Next they will probably want to expand the Community Board so they can opine on every other project.

SAVE THE DATE: Fuel Prices are Falling. Will They Keep Going Down? Should You Be Renegotiating Contracts? Join us for special energy price forecast and buying strategy session at 4:15 p.m. Thursday, February 26th at the Club 101. Invitations are going out soon.