This week on Housing New York, we have a range! The Rent Guidelines Board gives us an idea of what they're thinking for rent adjustments. Plus, mayoral candidates are pressed on rent-free rhetoric, and we recap my panel discussion about homelessness and vouchers.
Let's start housing in 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 the Housing New York podcast. I'm your host, Kenny Burgos. We're taping this on Cinco de Mayo, May 5th, which is technically a celebration of the Battle of Puebla in Mexico. But Americans have, of course, co-opted it to be an eating and drinking day. I say the compromise is to support your local Mexican restaurant, enjoy some good drinks, enjoy some good food — that's just my tip of the day.
On to the news.
[01:13] [Rent Guidelines Board preliminary vote]
We start this week talking about the rent guidelines board, but I promise we will not be talking about them again for at least another month.
[April 30, 2025 RGB Meeting]
[RGB Chair Doug Apple]
“At this time I would like to put forward a motion for the proposed rental adjustments for rent-stabilized apartments and lofts…”
[Kenny]
This week was a key date in the process. The board gathered to set a preliminary range for rent adjustments.
[RGB Chair Doug Apple]
“...And I move to adopt the following proposed rental adjustments for rent-stabilized apartments and lofts.”
[Kenny]
The final vote historically has always been inside the preliminary range, which this year is 1.75% to 4.75% on a one year lease, and 4.75% to 7.75% on a two year lease.
The high end of that range is 1.5% below the RGB’s commensurate adjustment. That's the number needed for 100% stabilized buildings to keep up with operating costs. But even that number doesn't tell the whole picture because roughly 175,000 of the rent-stabilized units are new construction and have rents that are well over $3,000.
The rent increase needed for those units is less than the commensurate. While the rent adjustment needed for the majority of stabilized apartments is actually higher than 6.25%.
We get it. Nobody wants rents to go up. This is why we advocate to the government for help on the operating costs, specifically property taxes.
Here's an example of what we're talking about: Last week, foreclosure started on a 325 unit building in Queens; 100-percent-stabilized, the average rents were $1,037, and the tax bill was $295 a month per apartment — or 28% of the rent check.
This building was defunded by the combination of high taxes and inadequate rent adjustments. Even if the RGB approved a 4.75% increase on this building, the property taxes would have to be cut back by at least 25% to get the building to just break even. And this building is not an outlier. There are thousands of buildings in the same spot. They're either being foreclosed on or they are months away from foreclosure. So the stakes are high, for the Rent Guidelines Board, but also for elected officials who need to step up and help.
[03:24] [RGB independence & election pandering]
We wanna talk now about the mayoral forum hosted last week by the NYU Furman Center.
This is the question that moderator Errol Lewis posed:
‘What role should the New York City mayor have in directing the members of the Rent Guidelines Board on their final vote? … Or, should the Board operate as an independent body as it was originally chartered?’
It's a great question, and it's one that mayoral candidates should be grappling with — which is that the Rent Guidelines Board is an independent body and not an extension of the mayor's office.
The candidates in attendance, to their credit, said the RGB should follow the data… and then pivoted to say the data calls for a rent freeze.
Later in the week, all the candidates calling for a rent freeze were taken to task by the editorial board of the New York Daily News. They called it blatant and transparent election pandering. Their words.
And they're correct. The data shows that much of the rent-stabilized housing is severely defunded and needs immediate help. In the editorial, they warn against viewing it as a cohesive block, since buildings have vastly different realities.
Housing is too important to be reduced to bumper sticker phrases. We hope voters realize this, and back candidates who seek balance and focus on actual solutions to the rent burden problem, like increasing the supply of housing.
[04:41] [CityFHEPS]
Let's talk about the CityFHEPS vouchers now. Last week, New York City announced rules changes to a few programs. Most importantly, they proposed a rule change that would force some CityFHEPS voucher holders to pay more in rent.
These are people in the sixth year of the program and have steady income. They will be required to pay 40% of their income to rent instead of 30%, as the first five years requires.
We have concerns that this change will create conflict with housing providers. If the tenants can't pay the difference, then they will accumulate rent arrears. That's less money the property has for maintenance and other costs. Eventually, if those arrears grow high enough, the building will have to take action and recover it. That's a bad outcome for everyone.
The city also proposed a change to their pilot program, Unlocking Doors. This was rolled out two years ago, and it essentially reimburses an owner up to $25,000 for renovating a vacant apartment and renting it back out.
Nobody used the program because it was restricted to low-rent units where the rents didn't cover operating costs. Basically, a building owner had to invest money that they didn't have to fix up an apartment that they would continue to lose money on, and they would hopefully get a reimbursement from the city.
They're not changing this program structurally at all, but they will now reimburse an owner up to $50,000 in renovation costs, except that they require that reimbursement to follow HPD’s cost schedule.
Let's talk about this cost schedule: It's a joke. They believe it costs only $25,000 maximum to fully renovate a kitchen or bathroom. If HPD knows anyone who is legally registered to do this work and will do it for that low of a cost, we would really like to know who they are. Seriously.
In the real world, it costs a lot more to renovate an apartment. So this program won't be used — like it hasn't been in the past two years. But we're sure elected officials will continue to say it is available to owners and they will blame owners for not using it, instead of admitting that it is not a serious option.
[06:39] [FARE Act update]
We have a quick update on the FARE Act. This is a new law that changes how broker fees will be paid on apartment rentals.
The law goes into effect on June 11th, but there is a lawsuit to block the implementation of it on Friday. A federal judge heard arguments in the case and because it is set to take effect in about a month, the judge said she would be considering the request for an injunction on an expedited timeline.
As we have said before, both city and state elected officials have made it clear that they want change on how brokerage fees are calculated and paid. So even if the lawsuit is successful, it is most likely just a temporary delay in this change being implemented. So we're gonna be stepping up our efforts to educate members on the new law and how to make sure you are in compliance.
[07:23] [HELP USA panel discussion]
Our last story for the podcast, we wanted to tell you about the panel I sat on last week about homelessness and vouchers. It was a great discussion about the flaws in the process, and I spoke about the frustrations many owners have with the inspection process.
Here's a clip.
[Kenny speaking at HELP USA’s Upstream 2025 Solutions to Homelessness conference]
“ So rent stabilization accounts for about 40% of the rental housing market within New York City. It's 2.3 million rentals, almost a million rent-stabilized units. So we recognize the significance and the importance of us as partners in this housing conversation. We're proud to do so.
There's about a hundred thousand voucher holders already within rent-stabilized units. Some of them using Section 8, others using other vouchers like CityFHEPS. Uh, and what you're speaking about is an actual, you know, it's a, it's a real, it's a real problem that we have and working with the commissioner and partners to certainly fix this. Right. I don't wanna trivialize it, but I. Inspections matter, right? Uh, this is again, like to use a commissioner's point. This is not saying we're not gonna do, we shouldn't do any inspections, because that process absolutely matters to make sure people have safe and quality and abundant housing. But what we're seeing in some of our owners is that, you know, some of these inspections can fail for some, some really almost comedic things, if you will.
I mean, uh, there is, I've heard of a case of an inspection failing for a cracked outlet plate. And again, that can pose a danger, but this is a 25 cent outlet plate that can be fixed, uh, probably in 30 minutes, but unfortunately starts the inspection cycle all over again. You know, there's other parts of the inspection process where the hot water's required to be between, is it 121 degrees and 128 degrees? I believe. So it has to fall within that range. And you have one individual inspector going out. And this is not to speak poorly on inspectors, but you know, sometimes if you all live in buildings, you know, hot water can take a few minutes to kind of kick back up, right? So. Who's to say that with hot water, uh, didn't need five minutes to sort of get to that optimal range.
So these are some of those small little pieces, but that can really cause hiccups when you scale it up to a city of this size. When you scale it up to the amount of people who have vouchers. And when you scale it up to the huge crisis of trying to house people in the city of New York.
so rent stabilization accounts are about 40% of the rental housing market within New York City. It's 2.3 million rentals, almost a million rent stabilized units. So we recognize the significance and the importance of us as partners in this housing conversation.
We're proud to do so. There's about a hundred thousand voucher holders already within rent-stabilized units. Some of them using Section eight, others using other vouchers like CityFHEPS. Uh, and what you're speaking about is an actual, you know, it's a, it's a real, it's a real problem that we have and working with the commissioner and partners to certainly fix this.
Right. I don't wanna trivialize it, but I. Inspections matter, right? Uh, this is again, like to use a commissioner's point. This is not saying we're not gonna do, we shouldn't do any inspections because that process absolutely matters to make sure people have safe and quality and abundant housing. But what we're seeing in some of our owners is that, you know, some of these inspections can fail for some, some really almost comedic things, if you will.
I mean, uh, there is, I've heard of a case of an inspection failing for a cracked. Outlet plate. And again, that can pose a danger, but this is a 25 cent outlet plate that can be fixed, uh, probably in 30 minutes, but unfortunately starts the inspection cycle all over again. You know, there's other parts of the inspection process where the hot water's required to be between, is it 121 degrees and 128 degrees?
I believe. So it has to fall within that range. And you have one individual inspector going out. And this is not to speak poorly on inspectors, but you know, sometimes if you all live in buildings, you know, hot water can take a few minutes to kind of kick back up, right? So. Who's to say that with hot water, uh, didn't need five minutes to sort of get to that optimal range.
So these are some of those small little pieces, but that can really cause hiccups when you scale it up to a city of this size. When you scale it up to the amount of people who have vouchers. And when you scale it up to the huge crisis of trying to house people in the city of New York.
To her credit, the Commissioner of Social Services was very willing to implement reforms, and we know her staff does incredibly important work with difficult headwinds. We look forward to collaborating to help make a better system for both voucher holders and housing providers.
[OUTRO]
That's the podcast for today. As always, you can follow us on social media, just search @housingny.
The Housing New York podcast is a proud product of the New York Apartment Association. We appreciate your feedback and you can leave us a comment on Substack or wherever you're listening to this podcast.
You've been listening to the Housing New York podcast with Kenny Burgos, and I'll see you all next week.
And remember, good housing policy starts with good conversation.
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