Renewed push for housing vouchers in the state budget

Plus, HPD has changed the rules on a key program. We’ll tell you why this will reduce homelessness.  

And don’t miss Kenny, along with Social Services Commissioner Molly Park and others, at Wednesday’s UPSTREAM 2025: Frontline Solutions to Homelessness.

This is your New York Apartment Association weekly update with CEO Kenny Burgos.

Follow NYAA on BlueSky: @housing.bsky.social

Follow @housingny on Instagram X TikTok YouTube & Substack 

Send us questions or comments at podcast@housingny.org 

On The Agenda

1:10: State budget update: housing vouchers are back on the table

2:26: Grim national housing outlook

→ Denver apartment vacancies hit 15-year high

→ Austin rents have fallen for nearly two years

→ The oversupply era is over? Multifamily owners eye upside

3:12: City to ease rules on re-renting affordable apartments 

→ Vacant Affordable Apartments to Now Be Filled on First-Come, First-Served Basis

4:23: Why is a 43-unit rent-stabilized building selling for less than a four-family home!? 

6:21: Rent Guidelines Board update 

Visit our website for more information.

Follow Us:
BlueSky
X
Instagram
Tiktok

Transcript

This week on Housing New York, the state budget is still late, and we have an update. Plus, HPD has changed the rules on a key program, and we’ll tell you why this will reduce homelessness. And it's crazy, but a 43-unit rent-stabilized building is worth less than a four-family home in the same neighborhood.

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 the Housing New York podcast, I'm your host, Kenny Burgos, CEO of the New York Apartment Association. We're taping this on Monday, April 28th, and hopefully the closeout of one of the worst allergy seasons that I have ever encountered in my life. So if you're out there suffering like I am, uh, I sympathize with you and hopefully clearer days are ahead.

Okay, onto the news.

[01:10] [State budget update]

We are gonna start with an update on the state budget. It's not done. And don't be confused if you hear from state leaders about being in the middle of the beginning of the end, or the end of the beginning of the middle. It's very confusing, uh, and doesn't give a clear picture. But if you look at the legislative calendar, there are only 25 more session days left this year.

Normally, starting today, there would be a push to get final pieces of legislation moved through the chambers. As a former assemblymember, I can tell you we needed all 25 of those days to work through the normal process. Since the budget isn't done, we're now losing days, and that means complicated pieces of legislation may not be finished.

So what we saw last week was a push by some to get key bills into the budget process. 

The best example of this was the Housing Access Voucher Program or HAVP. Reports say there is a push for this to be put back into the budget. 

I can't stress enough how vital vouchers are to apartment buildings in New York City. In many parts of the city, buildings wouldn't survive without vouchers. So whether you have a voucher or you don't, the health of your building likely relies on one. So it's a win for renters across the board. 

We don't know what is going to happen with the budget, but since we're running out of time, we do think it's a good idea to put items that would improve housing back in.

[02:26] [National housing outlook] 

We're gonna zoom out now and take a national look at housing. Over the past few years, the country has produced more and more apartment buildings and rental housing. New York is unfortunately an outlier, and production remains tepid here, but the massive surge in housing has dropped rents in most of the country.

Vacancy rates have hit highs in Denver leading to rents dropping. We saw this in Austin, Texas as well, where rents drop steadily for about two years. 

But now production of housing has started to decline. This is due to a slowdown in a pipeline that was caused by high inflation rates and then exacerbated by tariff concerns. So now we have turned a corner and rents are going to start going up again across the country. 

In short, we don't have enough housing and it remains too expensive to build housing in most places. 

[03:12] [Important HPD update]

We have some HPD changes to tell you about. You might not know this, but in New York City, if an apartment building is getting certain tax credits, they have to set aside affordable units for a lottery system. Those apartments go to tenants that qualify based on income. 

Now, when those tenants move out of the apartment, the unit goes into a portal for people to apply to get the spot. 

Here's the problem. Sometimes those units sit empty for months and even years. It's because the process of finding a tenant that qualifies can be complicated.

Vacant units help nobody. It hurts the overall finances of the building and often forces it to cut back on maintenance. So HPD is changing the process. 

Starting on May 1st for one year, building operators will now be able to go out and find tenants that qualify for those units and rent them immediately, without having to go through the timely lottery process. 

We get calls every week from people looking to get out of shelters and into apartments, and they often complain that they have been waiting in the lottery system for months, so it's gonna help a lot of renters as well. 

We're very happy that HPD is doing this, and we know many nonprofit housing providers are also excited. We believe it'll have a noticeable impact on reducing homelessness in the months to come. 

[04:23] [Why is a 43-unit rent-stabilized building selling for less than a four-family home?]

Okay. We wanted to have some fun here. I'm gonna play a clip from a podcast by our friends at Marcus and Millichap. 

[NY Multifamily Podcast]

[Speaker A:] “This is a really good deal. This is a 43-unit apartment building…”

[Speaker B:] “Clean?”

[A:]  “...for $4.3 million. You're selling four families for more.”

[B:] “What is the return?”

[A:]  “This will trade for like a mid seven cap, low-to-mid seven cap. We haven't found the buyer yet. This building is totally available to buy.”

[B:] “Maybe we just did.”

[A:]  “Maybe we did.”

[B:] “374 Wadsworth.”

[A:] “374 Wadsworth Avenue. Beautiful building. Preference; elevator; great location. Nothing wrong with it. Great collections. Like a hundred a door, a hundred a foot. Seven plus cap. This is a good deal.”

[Kenny]

This is not a sales clip – not advocating for anyone to buy this particular building – but we did wanna explain why a 43-unit rent-stabilized building is selling for less than a four-family home. 

As they said in the clip, the short answer is really bad housing policy.

First off, the 43-unit building is 100% stabilized with average rent around $1,300. It's in great shape because the owner has been investing almost all the rent back into the building. So there are very few violations that likely haven't been cleared because HPD takes months, sometimes years, to process the paperwork.

But the fundamental economics suggests that the rent won't keep up with rising operating costs. That means the value is going to decline every year that the Rent Guidelines Board adjusts rents below inflation and operating costs. That's just the reality. 

Meanwhile, the finances of a four-unit building in the same area in northern Manhattan are probably much better. It'll pay 10 times less in property taxes, and even if you live in one of the apartments, you'll be able to charge rents that are two or three times as much, while operating costs are lower. The four-unit home is going to make more money than this building for the foreseeable future. 

I don't think it's crazy to want a housing policy where there are better incentives to own and operate buildings with higher density, especially in a housing crisis, but that's not what we have here.

[06:21] [Ret Guidelines Board update]

We're gonna end the podcast talking about the New York City Rent Guidelines Board. 

On Wednesday night, the RGB will vote on a preliminary range for rent adjustments. Historically, the final vote has always been within the preliminary range. 

As we mentioned last week, the commensurate adjustment published by the RGB was 6.25%.

That is the rent adjustment needed for 100% stabilized buildings to keep up with operating costs. We wanted to put this into context. Average rents in the Bronx and Northern Manhattan are around $1,300 for 100% stabilized apartment buildings. Operating costs are around $1,050 a month. Operating costs are expected to go up about $80 this year.

That's basically what a 6.25% rent increase would be. Without it, these buildings won't be able to keep up with operations. Already, we're hearing from nonprofit tenant organizations that more than 3,500 buildings are functionally bankrupt. 

We get that raising rents is difficult for the RGB. And we have already seen most of the candidates running for mayor calling for a rent freeze, which would put these 3,500 plus buildings in severe risk of deterioration.

We wanted to point out a few things. 

First, between $200 and $300 of the rent checks are going to property taxes in these 100% stabilized buildings. If elected officials want to help, they need to reduce the taxes on these buildings. 

Second, government data tells us that about 175,000 rent-stabilized tenants are going to get a rent freeze, no matter what the RGB does. They're either on SCREI or DRIE, or receiving a voucher.

Unfortunately, there are probably another 50,000 to 100,000 rent-stabilized tenants who are eligible for a voucher or injury program according to government data. So we should all work together to help get these people signed up for these programs. We think this will be a better outcome for renters and buildings than defunding the properties and risking deterioration.

[OUTRO]

That's the podcast for this week. 

Quick plug: I'll be on a panel about homelessness and vouchers on Wednesday. It's been organized by Help USA. If you have time to check it out, I'll be on at 11:00 A.M. with Department of Social Services Commissioner Molly Park and several other great guests. The event is taking place at the Museum of Jewish Heritage.

As always, we encourage you to follow us on social media. We are @housingny on most channels. 

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 over however you are listening to this podcast.

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.