Summer is here and the mayoral race is heating up!

Early voting begins Saturday, June 14, so let’s all make a plan to get to the polls. Also, we look at why the Community Opportunity To Purchase Act (COPA) should concern everyone. And with summer finally here, we get into the rules and guidelines around air conditioning. 

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

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On The Agenda

1:12: Mayoral race update

2:25: The FARE Act takes effect on Wednesday  

→ More on what to expect 

3:37: The Community Opportunity To Purchase Act (COPA)

5:37: Air conditioners: rules & guidelines 

7:32: Rent Guidelines Board hearings 

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Transcript

 This week on housing in New York, the race for New York City mayor heats up with the first televised debate. I will tell you everything you need to know. Plus, the City Council holds a hearing on COPA, the Community Opportunity to Purchase Act. And summer is finally here, so we're gonna talk about that amazing relief when you walk down the street. That's right: air conditioning. 

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.”

I'm your host, Kenny Burgos, CEO of the New York Apartment Association. We're taping this on Monday, June 9th. You know, someone offered me July 4th plans, and I'm here thinking he's getting his invite out early — but it's just over three weeks away. Summer always has a way of sneaking up on me… and then, sneaking right past me.

Anyway, on to the news.

[01:12] [The mayoral race is heating up]

We're five days away from early voting in the primary and 15 days away from the primary election, so we're gonna kick off this podcast talking about the race for New York City Mayor. 

Last week, nine of the candidates vying for the Democratic nomination were on stage for a debate hosted by NBC-4 and Politico. As a former elected official, I can tell you that a nine-person debate is not a great way for voters to learn about candidates. It's difficult for the moderators to keep candidates' answers on time, while also getting them to answer questions. It's difficult for the candidates because 30 seconds is a really short time to answer a question.

The result is that voters don't get much from these events. There was a good discussion about housing amongst the candidates, but it happened after the live television broadcast ended, so the audience likely dropped off. 

The day after the debate, we had a flurry of events happen. On Friday morning, state Senator Jessica Ramos endorsed Andrew Cuomo. Her name will still show up on the ballot.

Ramos is a champion of unions, but she has failed to gain traction in the polls. Most of the city's most powerful unions have backed Cuomo in the race, so it makes sense that she has also supported the former governor. 

Early voting starts on the 14th, so let's make a plan to vote this week. 

[02:25] [FARE Act takes effect on Wednesday]

This week the FARE Act takes effect. If you're not familiar, this bill applies to broker fees. Before the passage of this new law, brokers would reach out to property owners and ask to market available apartments. Owners didn't have to pay them, so they went along. Multiple brokers would then list the same apartment and when they rented it, they would collect the broker fee from the tenant.

This law changes all of that. Owners still don't want to pay brokers and reporting in Curbed suggests most are not going to pay them. So brokers aren't going to list the units if they aren't going to get paid. 

So what will owners do? Some have raised rents and moved on to ‘No fee’ listings; one owner said rents have been adjusted up a few percentage points. One small owner said they won't list anymore — just rely on word of mouth for units that become available. And StreetEasy released a report that said rents have not increased nearly as much as the broker's fee costs renters. 

As this law gets implemented, we will see things change. One thing that's gonna change for sure, is that the public listings for apartments will decline. Renters will have to find new, creative ways to find apartments. What exactly that looks like? Nobody knows. 

[03:37] [Community Opportunity To Purchase Act (COPA)]

Turning our attention to the City Council now. Last week, our organization submitted testimony on Intro 902, which would create the Community Opportunity to Purchase Act. 

At the public hearing, this bill was presented as a way to help the city take over neglected buildings. Let's be clear, our organization is not opposed to legislation that would do that and lead to better homes for the renters in the building. 

This bill does not do that. This bill would dramatically alter all multifamily housing sales in the city and there are some very real consequences for small homeowners, as well as the owners of apartment buildings.

Specifically, this bill would require all properties with more than three units in the city to be listed on the market for half a year, so nonprofits would have an opportunity to buy the buildings. So, if you own a three-family home in the outer boroughs and rent out two units, while you live in one apartment, you won't be able to sell your home for at least half a year if this bill passes. Even then, if you sold your home, nonprofits would have another half a year to match the price and pay. 

This is problematic for many reasons. Over the course of a year, a lot of things can change. Sometimes people need to sell properties quickly to cover other bills. That could no longer happen in New York City. Also, over the course of a year the value of a property changes. Under this bill, a nonprofit entity could spend a year saying they want to buy a property and then just walk away with virtually no consequences. 

That's scary for anyone who cares about a well-functioning housing market. There is no doubt in my mind that this would lead to a decline in available supply of housing, which is something we absolutely don't need right now.

Let's also be clear about something, no other place in the country has time limits close to this long. The other communities that have implemented a version of this law have allowed nonprofits a 30-day window to make a decision on purchasing a property. One month is far more reasonable than what could easily be more than a year.

[05:37] [Air conditioners: rules & guidelines]

Last week it was hot out there. We got our first taste of summer. 

Every year around this time, we start to have the same debate about providing air conditioning in apartment buildings. There was a report recently issued by the city comptroller that said rising energy costs will lead to more heat-related deaths as they can't afford to use air conditioning.

I wanted to quickly discuss this and explain to everyone what the current rules are. Property owners cannot deny any tenant an air conditioner. If you wanna buy one and install one, you can; you do have to notify the building management though. This is because there could be electrical capacity concerns and other installation issues. 

In rent-stabilized apartments where the building pays the electricity cost, a small surcharge can be passed onto the tenant. Also, if the property owner buys and installs the air conditioning units, they can claim an Individual Apartment Improvement (IAI) and increase the rent slightly. 

I wanted to recap all this because there is a bill in the City Council that would change the law to require all apartment buildings to maintain a temperature below 78 degrees indoors and humidity below 50% if the outdoor temperature rises above 82 degrees. The bill clearly states that any building without central cooling would have to install unit-based systems to address this. 

I don't wanna devolve into a science lesson, but I hope you trust me when I say this requirement is virtually impossible to meet with current technology. Also, the units that are best equipped to try and do this are made in China. So we would have a tariff and supply chain issue, and the cost would be astronomical to many rent-stabilized buildings that are already bankrupt or very near bankruptcy — and usually almost a hundred years old. 

If we actually wanted to help renters, the government should just allocate a few million dollars more in the budget to help people buy AC units. It would be a much more effective way of solving this problem. 

[07:32] [Rent Guidelines Board hearings]

We wanted to wrap up the podcast with a quick update on the New York City Rent Guidelines Board. They have started public hearings, and like clockwork, things are getting more and more political. 

One debate is about whether the RGB should be allowed to be an independent body that reviews data, or if they should be pawns for the mayor.

Let's talk about what the law says. The RGB is bound by state law to be independent. The members of the board do a lot of work and don't get paid. They have heard hundreds of hours of testimony from experts about building finances, tenant income, market conditions, interest rates and access to financing — and much more.

It is objectively fair to say that this board is more educated to make the decision than anyone else in the city. It would be undemocratic and unconstitutional if that's thrown to the side, and the mayor can just decide the outcome. In these uncertain times, I think we all can agree more democratic systems are better than less.

[OUTRO]

That's the podcast for this week. We hope you'll keep following us on X, Instagram and TikTok. You can find us @housingny. We love hearing from you. You can post in the comment section of where you're listening or engage on social media platforms. 

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.