TESTIMONY
Adam Roberts, Policy Director, Community Housing Improvement Program (CHIP) on the Financial Crisis in New York's Rent Stabilized Housing
2:18:37
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3 min
Adam Roberts discusses the financial crisis threatening New York City's rent-stabilized housing and its impact on housing providers.
- Highlights the crisis faced by New York's rent-stabilized housing, including a financial crisis threatening nearly 1,000,000 units of affordable housing.
- Details the challenges of maintaining aging buildings, the inability to recoup renovation costs, and the consequent lack of financial support for renovations.
- Reports an increase in vacant units due to financial constraints and mentions the collapse of banks like Signature Bank and the potential collapse of New York Community Bank, both significant lenders to rent-stabilized housing.
- Calls for the NYC City Council to find a solution to prevent further foreclosures, vacancies, and a possible government bailout that could divert funds from necessary social services.
Adam Roberts
2:18:37
Thank you for holding this hearing today.
2:18:39
I am Adam Roberts, policy director for the community housing improvement program.
2:18:44
Also known as Chip.
2:18:45
We represent New York's housing providers, including apartment building, owners, and managers.
2:18:50
Our members operate New York rent stabilized housing, which makes up nearly 1000000 units of affordable housing.
2:18:57
Most types of affordable housing in New York are facing a financial crisis.
2:19:00
Including night shift, supportive housing, and pre 1974 rent stabilized housing.
2:19:06
These aging buildings are expensive to maintain an upgrade.
2:19:09
Considering the $80,000,000,000 needed to renovate nitrous 178,000 units of housing, the cost must be far higher for the 1,000,000 units of rent stabilized housing.
2:19:20
Rent stabilized housing is in even more dire circumstances because the cost of renovations cannot be recouped.
2:19:27
Rental income barely covers daily operating costs.
2:19:31
This prevents banks, nonprofits, and government agencies from lending for renovations.
2:19:36
While simultaneously reducing building value.
2:19:39
Without lending, it is impossible to pay contractors, tradespeople, architects, an engineer for renovating vacant units.
2:19:46
They won't work for free.
2:19:48
When long term tenants move out, these units require lead abatement asbestos remediation, subfloor replacement, electrical, rewiring, and bathroom and kitchen renovations, which totals around $100,000 for just the one bedroom unit.
2:20:02
Furthermore, those banks who did previously learn to rent stabilized housing are themselves facing collapse because of plummeting bit building values.
2:20:10
Since building values are so low, banks cannot recoup losses through foreclosure.
2:20:14
Signature Bank collapsed last year, and your community bank Now the largest lender to rent stabilized housing is facing a minute collapse.
2:20:22
Without funding for renovations, units are being left vacant after long term occupancy.
2:20:27
The independent budget office found over 42,000 vacant units in 2022, an increase of 18% from pre COVID.
2:20:36
Over 13,000 units were vacant for multiple years, a 65% increase from pre COVID.
2:20:42
Furthermore, we received numbers from the Department of Finance showing nearly 9000 units were vacant in both 2021 2022.
2:20:51
Meanwhile, the Census Bureau found over 26,000 units vacant, but not available in the 2023 HVS.
2:20:58
It is important to note that both the IBO and DLF numbers respectively come from rent registrations and RPIEs.
2:21:06
These are filings where in stabilized buildings submit, not survey samples, like the HVS.
2:21:11
This makes those filing numbers harder to refute.
2:21:14
It is an important consideration for the council in evaluating HPD's claim that the HVS shows no vacancy issue.
2:21:21
While renewing the city's rental emergency and reviewing the results of the HBS, we ask that the council find a solution to the financial crisis plaguing rent stabilized housing.
2:21:30
Waiting to act means more foreclosures, more vacancies, and the need for a government bailout, which would divert tens if my 100 of 1,000,000,000 of dollars for necessary social services.
2:21:41
We want to be your partner in ensuring this crisis is solved now.
2:21:44
Again, thank you for holding the steering today.