The evidence for rent-stabilized housing distress is now overwhelming

The latest NYU Furman Center report provides a data-rich picture of New York’s rent-stabilized housing woes. Plus, residential insurance costs are one of the biggest reasons affordable housing is in so much trouble. NYAA testifies before the state Senate.

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

Check out the latest edition of Housing New York Magazine

Follow @housingny on Instagram X TikTok YouTube & Substack 

Send us questions or comments at podcast@housingny.org 

On The Agenda

1:11: NYU Furman Center brings the data on NYC’s rent-stabilized housing stock

4:07: NYAA testifies: untenable insurance premiums & the high cost of fraud

   → Watch NYAA Policy Director Kathleen Irwin’s full testimony before the NY State Senate 

6:26: COPA and the City Council

8:09: The who's who of Mayor-elect Mamdani’s housing-focused transition team

   → Mamdani selects several corporate executives to mollify city’s business community

10:02: Julie Menin declares victory in City Council speaker race

Visit our website for more information.

Follow Us:
BlueSky
X
Instagram
Tiktok

Transcript

 This week on Housing New York: The evidence of rent-stabilized housing distress is now overwhelming — and broken down in detail. We take a look at the latest Furman Center report. Plus, insurance costs are one of the biggest reasons affordable housing is in dire trouble; we recap the recent state Senate hearing. And there's a freakout over COPA, the Community Opportunity to Purchase Act. We explain why people are panicking. 

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. 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.”

Welcome back to Housing in New York. I'm your host, Kenny Burgos, CEO of the New York Apartment Association. It is Monday, December 1st. The year is coming to a rapid close. We have just closed out Thanksgiving weekend, which I hope you all enjoyed — and happy holidays to everyone. 

Let's get right into it.

[01:11] [Taking stock of NYC’s rent-stabilized housing]

For more than a year, we have been chronicling the distress in rent-stabilized housing. 

We have been doing this for two main reasons: first, because we see it firsthand. Since we represent the majority of rent-regulated building owners, we felt the responsibility to pass along the information so that the public was aware of what was happening.

The second reason we did this is because the distress is entirely preventable. The current rent-stabilization policy is driving investment out of the buildings, forcing them to cut back on maintenance — and that is making housing worse for many of the tenants living in these buildings politically. 

It's easy to blame landlords, but here's the thing: Everything I just said about the deterioration of quality buildings is what government-backed nonprofits are saying about regulated housing. This is not speculation. This is not about profits. This is a crisis that is destroying mission-driven nonprofit housing along with private owners. 

We have a great sense of the scale now, thanks to the extensive research done by the NYU Furman Center. 

They broke down the housing at risk: Roughly 19% of stabilized units are operated by nonprofits and have capped rents. These are usually old buildings that were preserved. They have median rents of about $1,250, pay no taxes — but they are failing.

Another 49% of stabilized units are privately owned, pay huge property taxes, and are in older buildings built before 1974 — and they have median rents that are slightly higher at about $1,350. Here's the thing: roughly $260 of that rent check goes to property taxes, according to the Furman Center. They're being asked to operate on a budget of about $1,090 per apartment, or $160 less than nonprofits that are failing.

This is a simple question of dollars and cents. The math doesn't work and something needs to change. 

Some of the best suggestions for change came from a panel I was on — and we're raised by Emily Kurtz from the nonprofit housing provider RiseBoro. Listen to a clip from her.

[Riseboro Chief Housing Officer Emily Kurtz]

“ For the affordable housing stock that is already regulated by regulatory agreements that caps rents, um, based on income restrictions. I do think the vacancy, um, reset needs to be looked at for those particular buildings. So not quite about the annual increase, just looking at are there different vacancy allowance rules for different segments of the population.”

[Kenny]

As you hear there, she said something needs to be done about the vacant apartments. She's talking about the strict rent caps that don't allow rents on empty units to increase enough to cover renovation costs. At NYAA, we have been talking about this for a long time. The government's insistence on capping the rents on vacant units has destroyed the values of buildings, and that has triggered their decline for both privately owned buildings and nonprofits.

We need to address this issue immediately, ideally this legislative session. It's the only way we're going to save this housing stock from ruin. 

[04:07] [NYAA Testifies: untenable insurance premiums and the cost of fraud]

[NYAA Policy Director Kathleen Irwin]

“According to our survey, 70% of owners with video evidence disproving a slip and fall claim still saw insurers settle rather than fight...” 

[Kenny]

That was NYAA’s Kathleen Irwin, testifying before a Joint Senate Housing Insurance Committee hearing. 

[Kathleen Irwin]

“...Faced with the prospect of drawn out investigations, litigation, and the risk of jury awards more than eight times higher than the national average, insurers choose to save themselves money by settling despite the evidence. This practice drives up premiums while rewarding bad actors…” 

[Kenny]

We were honored to be invited to speak and give testimony, and we applaud the state lawmakers for taking this important step. 

[Kathleen Irwin]

“...This dynamic especially harms tenants in buildings with rent-stabilized units; fraudulent claimants and their attorneys profit, insurers protect themselves through higher rates or leaving the marketplace, and owners are left absorbing massive cost increases. This is reflected in higher rents in buildings with market units. But in fully stabilized buildings, premium cost increases cannot be offset; every dollar diverted to inflated insurance costs is a dollar that cannot be spent on maintenance, safety, upgrades or energy efficiency.”

[Kenny]

As you hear there, we were outlining the troubling increase in fraudulent claims, which is a key driver of cost. 

Later in the hearing, one insurance collective said fraudulent slip-and-fall cases are pulling about $4 billion out of affordable housing in New York State each year. To give you a sense of the scale of that, $4 billion could reasonably build 5,000 affordable apartments annually. That's not enough supply to solve our problem, but I think we all can agree that that money would be better spent on housing than going to fraudsters. 

It's clear that affordable housing is sinking under the weight of skyrocketing insurance costs. We spoke about it. The State Department of Finance spoke about it. Dozens of nonprofit housing providers spoke about it, and the lawmakers asked some tough questions of both the insurance industry and the lawyer lobby as they tried to get to the bottom of why the costs are rising. 

Some solutions that were discussed include cracking down on discrimination against buildings with low income residents or voucher holders — [that] was one proposal that we support, but we don't think that would lower the overall cost very much.

One option we would like to see would be the state providing reinsurance. Most insurers buy insurance to limit their own risk and lock in profit margins. 

What is clear is that the status quo is not acceptable. Something needs to be done.

[06:26] [COPA & the City Council]

Okay, there's been [a] major freakout in the real estate industry over the past few weeks, over a bill called the Community Opportunity to Purchase Act. We wanted to explain why and what is happening now. 

First off, this bill was introduced last year. It would dramatically impact building sales in the city, basically putting a six month pause on sales as government-certified nonprofits had the first right to review the financials for the buildings and make an offer. 

If passed as is, it would have a profound impact on housing. A few things we expect to happen include: building prices would go up as a natural side effect of the new regulatory scheme; that's not our view, that was the view of HPD in testimony that they provided. 

Buildings in financial distress and looking to sell quickly because the owner has no money to maintain the building — those buildings would likely see rapid deterioration as part of the bill. This is because once an owner lists the building to sell it, they're unlikely to invest more money into the property. 

Finally, this is a regulatory and legal nightmare. It would require tens of millions of dollars in taxpayer funds to build out the government infrastructure to process all of this. This, again, is not our opinion. This is what the government says. 

That version of the bill is completely unworkable and everyone should freak out about it. Naturally they did, when there was a buzz that it was going to be passed quickly by the Council in November. The Council stepped back from that. 

They do intend to pass a version of this bill soon. We expect to see the final version of this on December 10, and then it may potentially pass on December 18.

We won't know how dramatic the impact of the bill will be until December 10, but I can assure you that as soon as it drops, the whole industry will be abuzz once again. 

We will have updates.

[08:09] [Mamdani’s transition team]

Last week, Mayor-elect Zohran Mamdani rolled out more than 400 people for his transition teams, and the housing committee was one of the most closely watched. It’s a 24-person group with a little bit of everything: nonprofits, labor, YIMBY groups, tenant advocates, affordable housing developers and a few folks from the finance side.

On the private-sector side, the biggest names are Two Trees CEO and REBNY Chair Jed Walentas, L+M’s Lisa Gomez, M Squared COO Carolee Fink, Merchants Capital’s Matt Wambua, and NYSAFAH’s Carlina Rivera. 

Most of them come from the affordable housing world, not the rent-stabilized side of the industry. In fact, no major landlord groups representing stabilized owners were included, although Rafael Cestero from CPC, who has been vocal about distress in that stock, did make the list.

A lot of these members also have deep government experience. Gomez worked at HDC under Bloomberg. Fink held senior roles under both Bloomberg and de Blasio. Wambua ran HPD under Bloomberg. So while the list looks new, the backgrounds aren’t.

There’s a tenant presence too, with voices from groups like NYS Tenant Bloc, Legal Aid, New York Communities for Change, and the Community Service Society. And pro-housing groups like Open New York, the Regional Plan Association, and the Center for Public Enterprise are also represented. 

Across the transition teams overall, at least five DSA members were appointed.

Other names landed on different committees, like Kathy Wylde and former Goldman partner Margaret Anadu, who joined the economic development side. And just like previous mayors, these committees are mostly about signaling — showing the public that the administration is “talking to everyone.” They rarely have concrete tasks or real decision-making power. But symbolically, this lineup shows Mamdani trying to balance the progressive coalition that elected him with business and housing leaders who were nervous about his platform.

[10:02] [STORY 5]

Last week, City Council Member Julie Menin announced she had locked down enough votes to become the next City Council speaker, a move that could shape how Mayor-elect Zohran Mamdani governs from day one.

Menin says she has support from more than 35 members, well above the 26 needed in the 51-person Council. Her coalition is big and broad: mainstream Democrats, several incoming Republicans, and a handful of progressives. And she’s backed by major unions like the Hotel Trades Council, 32BJ, and the United Federation of Teachers. That kind of labor support is what really pushed her over the top.

Her main rival, Crystal Hudson, a progressive who many assumed Mamdani would prefer, conceded shortly after. Hudson had her own union support and a strong progressive bloc behind her, but it just wasn’t enough.

A lot of people see Menin as a potential check on Mamdani’s agenda. She’s a moderate from the Upper East Side, she’s married to a real estate developer, and she represents a wing of the Democratic Party that wasn’t thrilled about Mamdani’s election. At the same time, she has deep ties to government and labor. She’s run major city agencies, led the 2020 Census effort, and worked under both Bloomberg and de Blasio.

The official vote isn’t until January, so there’s still time for the politics to shift. But if Menin’s coalition holds, she’ll be the next speaker, and the dynamic between her and Mamdani is going to set the tone for pretty much every major policy fight next year.

[OUTRO]

That’s a wrap for today’s episode. 

The Q3 Housing NY Magazine is out now. This issue covers pension funds losses from rent-stabilized housing, the broken property tax system, how voters believe New York’s housing policy is broken, which elected officials have the most rent-stabilized units in New York, and much more. You can read on our website at housingny.org. 

I’ll be back with you in two weeks. In the meantime, follow us on Instagram, TikTok, and X @HousingNY to stay up to date.

And remember, good housing policy starts with good conversation.