Housing is back on the ballot this November

Plus, Kenny explains the sudden boom in 99-unit apartment buildings, why housing court policy drives up rents, and whether rent freezes are even constitutional. (It depends.)

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

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On The Agenda

1:32: The Charter Revision Commission is on the ballot

2:51:  The 99-unit building boom explained 

5:08: HPD clogged housing pipeline encourages corruption

6:14: Housing court delays and high cost of eviction protections

7:30:  Are rent freezes even constitutional? 

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Transcript

This week on Housing New York, there is some big money backing the ballot measures before New York City voters this November… we’ll discuss. Plus… we are seeing a lot of 99-unit buildings. We explain why this is happening. And… Is a rent freeze constitutional? We explain why it depends. 

Let’s start Housing New York

[THEME (waterfall)]

“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. Hundreds of thousands of renters are at risk, and there is literally no plan. The distress of rent-stabilized buildings is going to be one of the biggest stories for the next 12-18 months.”

[INTRO]

Hi everyone, Kenny Burgos here. I hope you all had a restful Labor Day weekend. I managed to sneak in a little time away with my family, but now we’re back, and there’s plenty to talk about on the housing front this week. 

Before we get into it, I’d like to take a moment to thank City & State for recognizing me as one of New York’s Trailblazers in Building & Real Estate. I’m truly honored to be included among such outstanding peers in the industry. Leaders like Jamey Barbas, New York Commissioner of the Gateway Development Commission, and Adolfo Carrión Jr., New York City’s Deputy Mayor for Housing, Economic Development and Workforce, are doing incredible work to strengthen our city. It’s a privilege to be named alongside them and I look forward to continuing the important work of building a more affordable New York.

Now on to the news.

[01:32] [On the Ballot: Charter Revision Commission]

We kick off this week’s podcast talking about the November election… but not the race for mayor. 

On the ballot will be a series of questions that will impact the future of housing in New York City. If approved, these changes will immediately lower the cost of building new housing in the city. They won’t usher in a wave of new development, but they will slightly shift the current system, leading to a better environment to create new housing in the city. 

This is a very good thing. And members of the city business community recognize this is a good thing. They are reportedly going to put $750,000 behind a media and education campaign to urge voters to back the measures. 

The ballot measures have faced some opposition from City Council members who believe that it will reduce their power over rezoning plans. This is a specific reference to one ballot measure that creates a mechanism for a project to get approval from the mayor and borough president if the City Council rejects the plan. 

Additionally, some unions feel that they have been able to win concessions for their members by working with the City Council and they believe the ballot questions could weaken their power in securing work for their members. 

So far, Mayor Adams and ex-Governor Andrew Cuomo have voiced support for the ballot measures. Democratic nominee Zohran Mamdani has not yet taken a position on the measures. 

[02:51] [The 99-unit building boom explained]

Instead of building big, developers are now building to a very, very specific size: 99 units. 

Recent permit filings show that the new craze is mid-size projects that stop just short of 100 apartments. 

Why? It’s all about the state’s new 485-x affordable housing program. Unlike the old 421-a incentive, 485-x includes a steep labor mandate: a $40-per-hour minimum wage requirement for any project with 100 or more units. By comparison, the city’s actual minimum wage is $16.50. For many developers, that rule makes large-scale projects financially unworkable, so they’re scaling down.

In the second quarter of this year alone, developers filed 41 projects with between 50 and 99 units, an astounding 116% above the historical average. Eleven of those had exactly 99 units, compared to just five in all of 2023. Over the past four quarters, there have been 28 filings for 99-unit buildings, more than double what we saw in the decade before 485-x passed.

This isn’t just theory — you can see it on the ground. The Diocese of Brooklyn recently filed plans for a 13-story, 99-unit building in Coney Island. In Queens, a developer is planning six separate buildings in Jamaica, each capped at 99 units, for a combined 591 apartments. This is quickly becoming the template for new construction.

Overall, REBNY reports that 424 new building filings came in during Q2, up 43% year-over-year. But here’s the catch: almost all of that growth is in small and mid-sized projects. Only eight buildings with 100 or more units were filed last quarter. To actually meet the city’s housing goal of 500,000 new homes in the next decade, we’d need about 12,500 units per quarter. Right now, we’re falling far short of that target.

It’s a good thing that filings are ticking up. However, 485-x is steering development in an odd and distorted way. Maybe a neighborhood would benefit from more one-bedroom apartments, but the law is leading developers to build more two-bedrooms or three-bedrooms. 

It’s yet another example of how overly complicated laws lead to unintended consequences. 

[05:08] [HPD’s clogged affordable housing pipeline encourages corruption] 

Now we’re talking about a story that shows just how broken New York City’s affordable housing system is. 

Developers across the city know what it’s like to wait months, sometimes years, just to get their projects through the Housing Preservation and Development department or HPD. Right now there are about 750 projects stuck in the pipeline with only a handful closing each year. That backlog alone is one of the biggest obstacles to building more affordable housing. 

Now we’re seeing how desperation to get through that system can lead to bad behavior. Prosecutors say one developer turned to bribery to try and skip the line leaning on the mayor's top advisor to fast-track a 371-unit project in Red Hook. That project closed much faster than most, and it’s now at the center of a criminal case. 

The lesson here isn’t just about one developer or one advisor, it's about how dysfunctional the process is. When the system is so clogged up that approvals take years, it creates the space for shortcuts, backroom deals, and yes, corruption. If we want affordable housing built on time and above board, HPD’s backlog has to be fixed. 

[06:14] [Housing court delays and the high cost of eviction protections]

When Governor Hochul talks about the courts, she’s usually focused on criminal court and bail reform. What she doesn’t talk about is housing court — and that’s where some of the worst dysfunction in New York City lives. 

This has been back in the news over the past few weeks. The Real Deal wrote about one Bronx nonpayment case where the owner showed photos of repairs, even got an HPD inspector’s report confirming everything was done. The tenant still said No, and the judge adjourned the case. Eight months of free rent later, the case still dragged on. 

That’s not unusual. It’s how the system is set up.

Some suggest it’s intentional: creating layers and layers of legal hurdles that delay cases. There is a clear impact from this as housing providers are unable to collect rent. That strips buildings of income needed to operate, and makes it nearly impossible to move cases forward. 

The system may delay evictions for tenants, but it is also making it impossible for many to provide quality housing. And some of those most impacted are actually nonprofit housing providers. 

And here’s the kicker: all those delays and protections drive rents higher. 

A new MetroSight report shows that eviction protections causing long housing court delays raise rents 5.9% to 6.5%. That translates to an extra $2,280 a year for New York City renters. 

Low-income New Yorkers are hit the hardest. 

Housing court delays are bad for everyone. 

[07:30] [Are rent freezes even constitutional?]

We are going to end the podcast discussing an opinion put forth by a New York City lawyer. It just happens to build off something we have been saying for 6 months. 

The idea is that a pre-meditated rent freeze is unconstitutional. 

This means that a mayoral candidate pledging to freeze rents for four years would face extra legal scrutiny if he did, in fact, freeze rents. 

Under New York law, the mayor has no authority to set rents. That power belongs to the Rent Guidelines Board – or RGB – an independent body required to review market conditions annually and base its decisions on evidence like property taxes, insurance costs, maintenance costs, vacancy rates and cost-of-living data. 

The pledge by Zohran Mamdani to freeze rents ignores that framework and if his board does freeze the rents, they could be violating due process — triggering immediate legal challenges using an Article 78 proceeding. 

Courts in New York have been very clear: administrative boards must act impartially. They should not make decisions based on political promises. 

Supporters of a rent freeze have made the point that former Mayor Bill de Blasio froze rents three times. But it is important to actually look at the data before the RGB in those years. In 2016 and 2017, inflation was basically zero. Also, rent-stabilized buildings were still allowed to raise rents on vacant units. 

They are no longer allowed to do that. In short, the data may have justified a rent freeze. In 2020, the rents were frozen months after COVID-19 shut down the city. I think most people can agree that it was a unique circumstance. 

In short, if the data doesn’t back it up, freezing the rents is likely unconstitutional. And promising you are going to do it in the future is definitely something that might catch the attention of judges in the federal court system. 

[OUTRO]

That’s the podcast. One final note though: New York City mayoral debates have been scheduled for October 16th and October 22nd. We are hopeful that housing will be a big topic of the discussion. When we get closer to the debate, we will provide our suggested questions.

Until then, keep checking us out on Instagram, TikTok and X… you can find us @housingny. 

We will be back in 2 weeks. See you then, and remember: Good housing policy starts with good conversation.