Latest news with #SeanCampion
New York Post
24-05-2025
- Business
- New York Post
Tax lien sales by NYC threaten to worsen the affordable housing crisis
Alarm bells are only just starting to ring about a huge threat to the city's housing stock: the growing crisis of older rent-regulated apartment buildings, especially the smaller ones largely owned by 'mom and pop' landlords. Pre-1974 rent-stabilized units, mainly in the outer boroughs, now house about 1.7 million New Yorkers, but many of theses buildings are in deep financial distress water: The rental income doesn't cover their ongoing expenses, or soon won't if the Rent Guidelines Board keeps holding increases to below the rate that those expenses are rising. A good number of landlords have only made ends meet by delaying payments on property taxes and/or water and sewer bills, and city Department of Finance efforts to collect on that debt stand poised to trigger a wave of foreclosures likely to spark a disastrous downward spiral. After putting tax-lien sales on hold early in the pandemic, the department was set to hold the first one in years on May 20, only to postpone it to June 3 as it began to realize how bad things may be. In these sales, the city gets cash upfront while the lien purchasers gain rights to collect on the debt; they can start charging high interest rates plus penalties. Owners struggling to pay that, along with all their other bills, wind up deferring even vital building maintenance; some eventually just walk away, abandoning the property and all its debts; others lose the building to foreclosure. Tenants suffer as everything falls into disrepair, and can suffer more if the building winds up owned by unscrupulous and predatory speculators. Meanwhile, the entire structure can deteriorate so badly that full repairs start to cost more than replacing the whole building. As Sean Campion of the Citizens Budget Commission noted in testimony to the Rent Guidelines Board last week, market prices for these pre-'74 buildings are now falling as the net income (rents minus expenses) collapses. This crisis is exacerbated by destructive city and state housing actions — costly climate-change and sanitation mandates, rents never collected after the COVID 'eviction moratorium,' units the landlord has to stop renting because the 2019 state Housing Stability and Tenant Protection Act makes it impossible to finance renovations after a longterm tenant finally leaves . . . Plus, Housing Court is so clogged that even open-and-shut eviction cases take forever. None of this gets mentioned as Democratic mayoral wannabes debate the city's housing crisis; these landlords, many of them minority and/or immigrants, just don't carry the political heft of the professional 'tenant advocates.' The CBC's Campion warned the RGB that continues to OK below-inflation rent increases will only accelerate the crisis; other reasonable moves pushed by a landlords group, the Small Property Owners of New York, include: Fix Housing Court so deadbeat tenants aren't living rent-free for years while awaiting eviction hearings. Amend state housing laws that limit owners' ability to upgrade apartments. Expand existing and create new targeted emergency-rental-assistance programs. Cap property taxes and other costs equivalent to the caps that the Rent Guidelines Board puts on rent increases for stabilized apartments. The Finance Department would also be wise to put off any lien sales for months at least, not just two weeks, because it's now guaranteed to trigger a slow apocalypse for this vital housing stock. If something doesn't break soon, New York is on track to lose a huge chunk of its affordable apartments.
Yahoo
22-05-2025
- Business
- Yahoo
Watchdog warns of rent-stabilized 'maintenance death spiral'
The nonprofit watchdog Citizens Budget Commission has joined the rising chorus of industry observers — and now independent researchers — calling on the city to step in and address the growing distress afflicting rent-stabilized housing. Unlike NYU's Furman Center, which sent up flares last month but did not propose specific solutions, CBC singled out the entity that needs to act — the Rent Guidelines Board — and steps it could take to avoid a 'maintenance 'death spiral'' in which the expense of repairs exceeds what it would cost to build a whole new building. The 2019 rent law effectively capped revenues, rendering it impossible to recoup the expense of building-wide or apartment-level renovations. The change has driven deferred maintenance. The expiration of J-51 in 2022 then cut another key tool to fund improvements — the program lowered property taxes for owners who made repairs. (The program was revived late last year, though for some owners, the timeline to apply is tight.) Combined, owners working with insufficient revenue have had few routes to fund building maintenance. CBC's Sean Campion proposed the RGB shift operations in two ways. First, the board could increase rents to at least keep pace with inflation, Campion, the nonprofit's housing and economic development director, testified at the RGB's sixth meeting of 2025. Adjustments have historically lagged the annual rise in expenses the board tracks. The RGB does not factor in debt service or big renovations, meaning the deficiency is likely greater than what the numbers show. The preliminary range the board approved last month, which heavily informs the final vote, would increase rents on one-year leases by 4.75 percent at maximum. The board's data found a 6.3 percent hike was needed to match inflation. Second, the board could report on the physical and financial health of regulated buildings. Currently, neither the state nor city is legally required to report on building quality, CBC said, and it's tricky and time-consuming to connect data on a property's violations, unpaid fines or income changes, for example, to its stabilized makeup, age and location. A new report could accomplish that, providing a more granular read on how revenue deficiencies are playing out on the ground, as well as how the level of deterioration varies between stabilization rates and in different areas of the city. As it stands, the board bases its adjustments on the annual change in median net operating income across all rent-regulated buildings — which include newer stock, some stabilized at market rates. It then considers the shift in NOI alongside the consumer price index to spit out a recommended rent adjustment. Property owners and trade groups claim the data fails to isolate the older, entirely rent-stabilized stock, whose owners have struggled to maintain buildings or cover loan payments since the rent law passed. The only route to raise rents is through the RGB's inflation-lagging annual adjustments. By the numbers, a 2025 RGB report found the median income of 100 percent regulated properties built before 1974 citywide was $1,343 per unit; in the Bronx, it was even lower: $1,212. Meanwhile, the cost of running a rent-stabilized building well was about $1,250 a unit, an analysis by nonprofit lender the Community Preservation Corporation found So, if owners do have a cushion — it's about $100. CBC also echoed The Furman Center's warning that neither city programs nor its budget will be able to bear the weight of distress. They can't be scaled to meet the growing need, Campion argued. For example, Third Party Transfer and Neighborhood Pillars, programs that pay nonprofits to rehab buildings, cost the city two-to-four times the value of those buildings, a CBC data analysis found Article XI, which cuts or eliminates property taxes for owners who fix up their properties, helps landlords but eats away at city revenue. The combined cost of Article XI or 420-c — a similar program run by the state — has surged 80 percent since the rent law passed to nearly $900 million, or a little less than 20 percent of the $5.3 billion in tax revenue rental buildings generated during the last fiscal year. As the Furman Center's Mark Willis put it during his testimony in April, 'Unless we vastly increase the amount of budget for subsidized housing, almost all of it is going to have to go to rescuing these buildings.' 'They're pushing the eject button': Related unloads monster rent-stabilized portfolio for $192M — another loss Rent-stabilized shortfalls may grow "exponentially," new data shows Rent board eyes up to 4.75% hike as landlords, tenants despair This article originally appeared on The Real Deal. Click here to read the full story.
