Nearly 700,000 rent-stabilized homes need a $4.65 billion bailout

With expenses far outpacing rents, urgent policy reforms are needed to avoid widespread default in distressed affordable housing. We examine new reports from NYHC and NYAA. 

Kenny also has the latest on COPA and the Kingston rent control saga — and be sure to check out the brand-new edition of Housing New York Magazine.

Plus, do you or someone you know qualify for a rent freeze? 

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

Follow @housingny on Instagram X TikTok YouTube & Substack 

Send us questions or comments at podcast@housingny.org 

On The Agenda

1:09: NYHC report says policy reforms needed to avert affordable housing failure

→ Bloomberg: NYC’s Squeezed Landlords Need $1 Billion to Help Avoid Default 

      → NYAA: $4.65 Billion Rent-Stabilized Building Bailout Needed

3:44: City Council rewrites COPA 

5:31: Kingston update 

7:03: Do you qualify for a rent freeze? Spreading the word on SCRIE & DRIE

→ Check if you or someone you know qualifies at nyc.gov/rentfreeze 

8:40: Kenny’s holiday housing wishlist 

9:05: Year-end compliance crunch checklist 

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Transcript

This week on housing in New York, the latest data reveals a stunning reality. Nearly 700,000 stabilized homes are at risk unless the city steps in with a $4.65 billion bailout. City Council rewrote COPA to focus on distressed buildings, but does the bill still serve its original purpose? Kingston faces a major decision on rent stabilization. And are tenants leaving money on the table?

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.”

[INTRO]

Welcome back to Housing New York. I'm your host, Kenny Burgos, CEO of the New York Apartment Association. We're entering that season where the trains are a little less crowded; emails get responded to a bit slower… Clearly, Christmas is around the corner. 

Let's check out the news.

[01:09] [Housing Distress]

One of the biggest stories in housing this past week comes from the New York Housing Conference, which released a report showing just how distressed our city's affordable housing has become. They found that New York City will need to spend $1 billion next year just to keep fully affordable buildings from defaulting on their mortgages.

These are non-profit run properties where expenses have been rising far faster than regulated rents. With talk of a multi-year rent freeze, the Housing Conference is warning that conditions will get even worse. 

Their executive director, Rachel Fee, put it plainly: Quote, “I've been working in affordable housing for 20 years, and I've never seen this level of distress.”

What they're describing in the nonprofit sector is exactly what we're seeing across the private or rent-stabilized side of the market. So our research team at NYAA looked at the full universe of regulated housing, both nonprofit and privately owned, and estimated the system needs a $4.65 billion bailout to prevent widespread defaults.

That includes the Housing Conference’s request for $1 billion for the nonprofit portfolio. Plus another $3.65 billion for majority rent-stabilized pre-1974 private buildings. (Say that five times fast.)

These buildings pay about $1.6 billion a year in property taxes, so even if we eliminated the taxes, they'd still need about $2 billion in relief based on the methodology put forth by the housing conference.

Here's the even tougher part: This one-time bailout would only stabilize the sector for maybe five years. 

This is why the nonprofits asking for a billion-dollar bailout are also asking to raise rents on vacant units. They say this is vital to address the deep structural problems facing regulated housing.

To be fair to the nonprofit, they're not asking for a bailout for private buildings in distress, and they don't think vacant units in private buildings should be allowed to have their rents reset. They only want this relief to go to their buildings. If that's the pathway the lawmakers take, then you can guess the outcome.

Everyone with a failing private building is going to want to become a nonprofit and get the tax break from the city and get the more sustainable laws to run their buildings. But you and I both know the government doesn't want these buildings to become nonprofits. We know this because they literally denied every failing rent-stabilized building that applied to get a tax break and become a nonprofit back in November, as reported by The Real Deal.

We can keep walking down this path and play ideological games, but the reality is the math doesn't work on those buildings. Everyone in the city and state needs to be honest about that fact and figure out a way to preserve this vital housing stock. 

[03:44] [City Council rewrites COPA]

This next story is connected to the first story. It's about the Community Opportunity to Purchase Act, or COPA, which is set to pass in the City Council before the end of the year. 

This bill has been amended to focus on distressed properties and the supporters of it admit what I have been seeing all along: that there will need to be a government subsidy to help the certified nonprofits with the purchase of these properties.

To be clear, these are the same nonprofits that are currently asking for a $1 billion bailout so they can hold onto their current buildings. They would need additional billions in government funding to buy these new distressed buildings. 

Let's step back and recap the current version of COPA. It focuses on buildings flagged in enforcement programs, on watchlists, or carrying significant liens — as well as buildings with affordability requirements that just expired or are about to.

Qualified nonprofits, community land trusts and now, nonprofit joint ventures with for-profits, would get the first chance to buy these properties. The Council also shortened the timelines. Instead of 180 days, nonprofits get 25 days to signal interest and 80 days to make an offer, with the clock running consecutively.

From my perspective, narrowing COPA to only distressed buildings may actually limit the number of deals nonprofits can successfully take on. These properties will often have deep repair needs and heavy debt, meaning transactions will be more difficult, not less. As I've said before, the bill is drifting further and further away from its original intent of giving tenants a real opportunity to purchase.

We expect this to pass, despite concern from city agencies like HPD that say they don't have the capacity to administer the program. I'll keep watching this closely because if COPA moves as written, it will reshape how a big share of distressed buildings are bought and sold in New York.

[05:31] [Kingston update]

Let's get out of New York City. We're gonna go to Kingston, where the city council is heading toward a major vote on rent stabilization. 

Quick history: This was put in place in 2022. It was challenged in the courts and eventually confirmed as legal, but the city was required to do a vacancy survey this year to affirm that there was still a vacancy rate above 5%, and it came back above that threshold.

Normally that would force the city to end the housing emergency and rent stabilization would end, but that's not what is happening in Kingston. They're trying to find ways to keep it in place. 

At first, they were going to focus on larger buildings. Those with more than 22 units where the vacancy rate is below 5%. The law is pretty clear that they could extend the emergency for those units.

But at a recent meeting, they went another direction. The council rejected the idea of limiting stabilization to larger buildings. Instead, they introduced an affidavit from a data consultant claiming some of the units that were registered as vacant may not actually be vacant. It is a legally questionable argument, but it now seems that it'll be the justification for the city to move ahead with reauthorizing the emergency.

I can almost guarantee this is going to end up in a lawsuit. The full city council is scheduled to vote at a special meeting on December 17th at 7:30 PM where they could keep rent stabilization in place, narrow its scope, or drop it all together. 

Whatever they choose, more legal battles are almost guaranteed. I'll keep watching it closely because Kingston is quickly becoming a test case for how rent stabilization works outside of New York City. 

[07:03] [Spreading the word on SCRIE & DRIE]

I wanna highlight an issue that doesn't get nearly enough attention, and that's SCRIE and DRIE. 

These are the rent-freeze programs for seniors and people with disabilities, and they're actually one of the smartest tools we have. Here's why. 

They freeze the rents for tenants who genuinely need the help and owners get fully compensated through property tax credits. It's targeted, it's fair and everybody wins, but right now, we're barely using this program. 

About 160,000 tenants qualify for SCRIE and DRIE, yet 58% are not enrolled. That means more than half of eligible New Yorkers are missing out on a rent freeze that they're legally entitled to. 

A lot of this comes down to awareness. Some tenants don't know the program even exists, and some owners don't realize they can help their tenants apply. And even when people do know about it, the application process is complicated, especially for seniors and disabled New Yorkers. If they miss a renewal, they lose the benefit entirely. 

There are simple solutions. The city could use prefilled forms using tax data, automated renewals, mailing applications directly to eligible households, even notifying owners when a tenant likely qualifies. These steps would dramatically increase enrollment without adding new costs. 

For myself and all of us here at NYAA, SCRIE and DRIE are exactly the kinds of programs we want to see expanded. They protect vulnerable tenants without putting buildings deeper into financial distress. 

If the city is serious about affordability, this is a low hanging fruit. 

Check if you or someone you know qualifies at nyc.gov/site/rent.

[08:40] [Kenny’s holiday housing wishlist]

As we wrap up the year, here's my official year-end housing wishlist, with little to no context. 

1. A vacancy reset
2. Insurance costs that don’t spike like holiday pricing
3. A functional Article XI program
4. Property-tax reform 
5. A steady development pipeline
6. And an RGB that gets it right next year

But if I'm being honest, what I actually want is real help for distressed rent-stabilized buildings. 

[09:05] [Year-end compliance crunch checklist]

Finally, as we head into the holidays, it's not just gift shopping season, it's also the annual maintenance crunch for building owners. 

A ton of compliance deadlines all hit on December 31st, so here's a quick rundown of what needs to get done before the ball drops.

→ You’ve got the annual bedbug report, which covers December through November. That has to be filed by the 31st, or you could get hit with violations. 

→ It's also the cutoff for submitting your annual elevator inspection reports to DOB. 

→ For buildings with tax block numbers ending in five, Local law 87 energy efficiency reports are due — along with the $375 filing fee.

→ Oilers need to be inspected and all reports filed by the end of the year as well. 

→ Under Local Law 152, gas piping inspections are required for buildings in Community Districts 2, 5, 7, 13, and 18 across all boroughs, unless you're an R-3 building. 

→ And finally, Local Law 126 garage inspections are due for Manhattan Community Districts 8 through 12, plus all Brooklyn districts.

So as you're juggling the holiday rush, make sure these are checked off — because avoiding compliance violations is the best way to start 2026. 

[OUTRO]

That's a wrap for today's episode. The Q4 Housing New York Magazine is out now. This issue covers our trip to Vienna, Austria; we segment the stress in rent-stabilized housing; we talk about the insurance hearing at the state Legislature and so much more. You can read it on our website at housingny.org. 

This will be the last episode of 2025. I'll see you all in 2026. 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.