This week on Housing New York, RGB season has begun with some misleading data. We correct the record. Plus, new scaffolding laws were passed by the City Council. No more ugly green sheds? Maybe. And we talk about trash, specifically composting fines that are about to go into effect.
Let's start housing New York.
[THEME]
“We need 800,000 units to meet the demand today. What we have right now in the United States and what we have right now in New York City is almost a crisis of absurdity.”
[INTRO]
Welcome to Housing in New York, the weekly recap of all the news about housing policy and politics in this great state. I'm your host, Kenny Burgos, CEO of the New York Apartment Association.
We're taping this on Monday, March 31st, 2025, which means you're likely listening to this on April Fool's Day. We thought about having some fun for the unofficial holiday – maybe endorsing my old classmate and assembly colleague Zohran Mamdani for Mayor – but the current state of housing in New York is so bad, it feels like it is in bad taste to joke about it.
Okay, let's get to the news.
[01:16] [Rent Guidelines Board data]
We have to start the show talking about the Rent Guidelines Board. It's the most important thing happening when it comes to rental housing in the city, and we don't say that lightly.
We have seen the financial health of the near-100% stabilized buildings in the outer boroughs plummet in the past few years. This is due to a confluence of factors: the 2019 rent laws, the pandemic high interest rates. But the biggest reason these buildings are in financial trouble is the Rent Guidelines Board. They have defunded these buildings over the past four years by advancing rent adjustments below inflation.
Their justification for doing this is the Income & Expense report, which came out last week. Each year it says the same thing: Free-market buildings with a few rent-stabilized apartments in the core of Manhattan have seen huge income increases, and highly stabilized buildings in the outer boroughs see their income decline.
This year's Income & Expense report followed this pattern – a high overall number – but data shows that a group of buildings that make up 65% of the survey saw declines. Go further into the cross tabs, and you see that 20% of this group lost money using the RGB’s method for calculating this.
There wasn't a ton of media coverage around this report's release, but we did hear increased calls for a rent freeze from some people who jumped on the misleading top-line number.
We have a lot of issues about how the data is calculated and analyzed. Essentially, the Department of Finance prepares this report for the RGB, and they're not transparent about how they do it.
Even so, the data was bad. For example, 100% of pre-1974 buildings outside the core of Manhattan had a cost-to-income ratio of 74% in 2023. This is the majority of rent-stabilized apartments.
The average rent for this group is $1,227. So the RGB data suggests that only $908 a month is spent operating these apartments. Roughly $250 of that goes to taxes, so we're looking at $658 for maintenance, staff, fuel, insurance, etc.
That's an absurdly low amount. No social housing project in the city operates with such a low budget and NYCHA spends more than twice that much. You just can't run an old apartment building in the city for that little.
So the data doesn't pass the smell test, but even if you believe it, the 74% ratio should be alarming. Responsible mortgage payments typically take up 30% of the rent.
This basic math from this report shows alarming, widespread financial distress. The future of housing in New York is grim if this continues.
[03:53] [New scaffold-shed regulations]
Moving on to the City Council. Last week, they passed a package of bills reforming scaffold-shed regulations. Here's the basic rundown of what was passed.
First, if a building owner is not making an effort to remove the scaffolding quickly, they'll face stiffer penalties.
We work with the Council to explain that many times, delays in taking down scaffolding is because the building is waiting on DOB to sign off on a repair or a long backlog, and finding contractors to do the work. So the law should allow the City to give owners some leeway if they're working to remove sheds quickly.
The bill also allows for a change in regulations around the look of sheds. They don't have to be that ugly green anymore. Now there are a host of colors they can use, which will hopefully make the city look nicer. That's a win for everyone.
But we should be clear with our listeners, this is not going to reduce the amount of sheds out there. The law governing building facades still requires building owners to put up a shed every five years to do inspections, which costs them tens of thousands of dollars that could be spent on upgrades to apartment buildings. It's a massive and unnecessary cost that drives up rent, and if elected officials in the city care about affordability as they claim to do, then they will amend that law.
[05:07] [New York’s looming budget crisis]
Okay, let's talk about New York's budget. The deadline for the state budget is April 1st. Lawmakers are gonna miss it. It's likely gonna be passed next week or so.
We can safely say there is not going to be anything that will improve housing in the budget. We've known that for a while, but this year's budget process has highlighted a bigger concern: huge future deficits.
This weekend, U.S. Senator Kirson Gillibrand said that the federal budget cuts could lead to funding gaps in New York State that top $10 billion. This would impact healthcare, housing and energy efficiency efforts.
The state relies on roughly $90 billion in federal funding annually, and that's about 40% of its state budget.
Most of the federal cuts are theoretical at this point. There have been some cuts by the Trump administration that have taken effect, and others that have been challenged in court. But the vibe is clear. The federal government is going to be massively scaling back its help to New York in the next few years, and local lawmakers need to adapt.
[06:08] [The mayor’s race]
To campaign politics now.
We are 86 days away from election day. On June 24th, voting will end in the Democratic primary for Mayor of New York City – and we will likely know who our next mayor is because the Democratic nominee will most likely end up winning.
Leading the field is former Governor Andrew Cuomo. He met with our friends at REBNY and told them he had regrets about the passage of the 2019 rent laws. He has not expressed the same thing to our members, who own and operate the majority of older rent-stabilized buildings that have been decimated by those rent laws.
At this point, he holds a considerable lead over the rest of the field, and we're starting to see far-left groups organize around a slate of candidates they hope can defeat Cuomo using the ranked choice voting system.
The leading challenge to Cuomo is socialist Zohran Mamdani, who has raised an impressive amount of money. He's maxed out on contributions from the City and has about $8 million in the bank to run ads leading up to the election. That's significantly more than everyone else, including Andrew Cuomo. Anyone dismissing the assemblyman at this point will be foolish.
History suggests there is still room for at least one more candidate to emerge as a top contender, but so far the rest of the field has been kind of “mid” during the campaign. They haven't gained traction with voters and it's clear that time is running out.
The New York Apartment Association has not yet endorsed anyone for mayor.
[07:31] [Composting fines go into effect]
Okay, we're gonna end the podcast talking about trash – more specifically, composting. If you're not aware, the City implemented mandatory composting back in October. Starting on Tuesday, the Department of Sanitation is going to start issuing fines for failing to separate food waste from regular trash.
This applies to single-family homeowners and multifamily building owners and operators.
The difference is that if you run an apartment building, you need your tenants to work with you to make this work. And to date, the City has not really educated tenants. They have left that up to property owners.
We have talked a lot about the cost of operating housing on this podcast. Staffing a building is part of that. Building supers only have so many hours in a day, so if they're spending a large amount of time picking through trash, that’s gonna be time they can't spend fixing other things.
And if buildings are fined, that's money that is taken away from the building for upgrades and for maintenance. This is going to do one of two things: decrease building quality or drive up rents.
When elected officials passed this law, it seems like they didn't realize or didn't care that they were making the city less affordable for hard working New Yorkers.
[OUTRO]
That's the podcast for today. We thank you all for listening, and we encourage you to check out all the social media content we're producing. This morning, we posted a video about politics and the Rent Guidelines Board that I think you all should check out.
You can find us @housingny on most channels: on Instagram, YouTube, X and Threads.
You can leave a comment on the social channels or in the comment section of this podcast. We appreciate the feedback.
You've been listening to Housing New York with Kenny Burgos and I'll see you all next week.
And remember, good housing policy starts with good conversation.
.jpg)
