Adolfo Carrión Jr., Commissioner of New York City Department of Housing Preservation & Development, on the Housing Crisis and Fiscal Year 2025 Budget

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Is this my signal to begin chair?

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Okay.

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Thank you.

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Good afternoon, chair Sanchez.

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Chair Brandon in absentia at the moment, members of the city council and of this committee.

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Public advocate, Williams, and let me just pause for a moment and say thank you to you for the worst landlord's list.

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I guess you'll see later in the news, some talk about this.

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But the work that you do is resulting in the kind of outcomes that we're looking for for New Yorkers.

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So thank you.

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I'm Adolfo Carreon junior commissioner of the New York City Department of Housing Preservation Development, and I'm joined by members of our agency's senior leadership Teams sitting here at the dayus as well as sitting behind me.

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We have with me at the dayus first deputy commissioner Ahmed Tagani and Deputy Commissioner for Finance And Administration, Garnier Caphart.

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As commissioner, But more importantly as a lifelong New Yorker, it is my honor to testify before you today on HPD's fiscal year 2025 budget.

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It is also my responsibility to tell you New York City's housing crisis is at its worst point in over 50 years, putting the city we know and love in serious trouble.

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This crisis is deeply personal to me.

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My family moved from a basement apartment in a tenement in Williamsburg in the 19 sixties into an apartment in Nietz's Jacob Reese Houses on the Lower East side.

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Just a decade after my parents arrived from Puerto Rico.

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From there, we moved to a federally supported new development on 12th Street and Avenue C in Louisaida.

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Eventually, we were able to squirrel away enough savings to buy a home in the northeast Bronx through a federal housing administration supported mortgage.

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So for folks like me and my family, this crisis and this budget isn't really about numbers at all.

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It's about the people who make a home in our city, who raise their children and grandchildren here who raise their prospects for a better and brighter future.

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Behind all the numbers we share with you today isn't just the brick We lay in the homes we build.

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It's about the children, families, working people, older New Yorkers who live in in your districts.

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And are near blocks.

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The people who are counting on the city of New York to create, preserve, and protect their homes.

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For decades, we've talked about a housing crisis.

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For many, the term may have started to lose a sense of urgency, but the New York City housing crisis is more real, more relevant, and more dire than ever before.

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If you're wondering why I'm starting with a warning today instead of diving straight into the numbers, it's because I want to make crystal clear that our single biggest motivator, the driving force behind our budget decisions and budget requests is the need to solve the housing crisis, not in the future, not in the next budget cycle, but this year in this budget.

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As we testified before you last week, we recently released the latest New York City housing vacancy survey, the longest running housing survey in the country.

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The survey measures among other things, the number of homes available for rent, a data point called the vacancy rate, Anything 5% or less can be considered a housing emergency.

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A vacancy rate under 2% is deeply, deeply troublesome.

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New York City's vacancy rate is now in alarming 1.41% the lowest recorded since 1968.

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That means at the time of the survey for the more than 2,300,000 renter households there were only about 33,000 homes available for rent.

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This isn't just a faceless statistic.

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It's a harsh reality for the diverse and vibrant communities who call this city home.

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It means families have little to no choice working people are forced to live in apartments they can't afford.

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Older New Yorkers and those with disabilities can't easily find accessible homes.

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And as a city, It means our economic and cultural potential is harmed as middle and low income people are forced out.

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The mayor has set a moonshot goal of 500,000 homes created and preserved over the next decade.

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Because that's what it will take to solve the housing shortage and homelessness crisis.

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And we are moving full steam ahead to make this a reality.

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In the past 2 years, the city broke record after record to create and preserve as many homes as possible while getting people into apartments as quickly as possible.

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In calendar year 2023, we closed on financing for the creation of an all time record breaking 14,002 127 newly constructed affordable homes.

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We also directly connected more New Yorkers to homes than ever before bringing nearly 13,000 households into affordable units this past calendar year alone.

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Nearly 10,000 of those connections were through are housing connect lotteries.

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Another 3000 households left shelter to move into HPD homeless set aside units.

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Creation of this body, by the way, an increase of more than 30% from 2022 to 2023.

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Overall, HPD and our partner, the Housing Development Corporation, financed a total of 27 911 units in calendar year 2023 through new construction and preservation projects.

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An increase of 80% from calendar year 2022.

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We focused on new homes for the most vulnerable New Yorkers setting records by creating 3926 new homes for New Yorkers who had experienced homelessness and 1677 the new supportive homes with restricted rents and supported by social services.

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Despite immense challenges, every team at HPD with our partners at HDC are working tirelessly and it's making a difference for the people we serve the people who depend on us.

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We're optimistic, but we are not declaring victory.

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These milestones are important and mean we are helping New Yorkers more vulnerable families, more individuals that will benefit from supportive services, and more older New Yorkers than we have in the past.

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But the need continues to be great.

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When it comes to working with this council to solve the housing crisis, I am lifted up by the success we've shared.

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Together, we've moved new projects through the land use review process.

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We've approved tax abatements that ensured long term affordability for thousands of families.

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We've invested in rehabilitation efforts that will stabilize some of our most distressed buildings and we've advanced a fair housing framework with you that will improve access and equity in the city.

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In fact, After the last 2 years, I am optimistic.

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This year, we are going to need the full court press.

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To win, to create a city where all our friends and neighbors can build lives, raise families, and grow old.

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We can't sit back and wait on defense.

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We need to create more tools.

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We need to find more opportunities.

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We collectively will need to be more proactive.

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We will need to work together to convert the resources in our 2025 fiscal year budget into housing wins citywide.

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Like any good team, we need a shared understanding of the resources and the challenges we face.

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On that front, I want to start with some key numbers 1,790,000,000 HPD's fiscal year 2025 total expense budget.

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1,570,000,000 HPD's operational and programmatic budget.

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The remaining 217,000,000 serves simply as a pass through for the New York City Housing Authority.

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20 plus the number of individual funding sources that flow into a HPD's budget.

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762,300,000, a significant, almost half of what the of the city's own resources that go into our budget.

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2600 and 60, the number of full time staff on HPD's budget.

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This includes 356 staffers dedicated to building and preserving affordable homes, 380 inspectors and inspector supervisors, keeping our city safe.

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225 positions still remain open, and our current staff vacancy rate is down to 8.4 cent.

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$12,000,000 is the budget that supports our neighborhood planning teams, serving a lifeline for as a lifeline for neighborhoods to make sure that new affordable housing works for our host communities.

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A 126,000,000 is the budget for our enforcement and neighborhood services teams, the backbone of safety and security for our communities.

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Our inspectors ensure that every family can lay their heads down in a home that offer safety warmth and hopefully prosperity.

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677,000,000, the budget for our housing access teams who provide subsidies, placement services, and tools that connect New Yorkers to affordable housing, household and subsidized housing have the support they need to be safely powered.

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We're going to stay laser focused on our mission to create and preserve affordable homes, especially for vulnerable low and moderate and middle income New Yorkers.

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We're constantly working to find ways to finance deeper affordability and to partner with community partners to provide wraparound services to better serve New Yorkers.

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Our development team is currently comprised of more than 8 teams.

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Who are working on hundreds of projects.

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Everything from converting hotels and commercial buildings into affordable homes to helping homeowners create safer basements to rent out at affordable rates.

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Communities are central to developing solutions for the future of their neighborhoods.

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We we aren't just here to build homes and protect tenants.

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We're also deeply committed to helping to build communities and support the New Yorkers who are the backbone of our city.

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That means real underground neighborhood planning in our host communities.

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HPD's office of neighborhood strategies and partner city agencies are working with communities throughout the city to plan for the preservation and development of affordable housing in a manner that fosters equitable, diverse, and livable neighborhoods.

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So in the next year, we're working with the Department of Environmental Protection to develop a comprehensive vision for the Jewel Street's neighborhood in East New York that will pair planned investments in green infrastructure with new housing and community amenities in a neighborhood that has had been forgotten and ignored by past administrations.

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We're advancing affordable housing projects in multiple on multiple public sites across the city putting into motion a significant piece of mayor Eric Adams 2424 plan announced in his recent state of the city address.

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Through the 2424 plan, we along with our partners at NYCHA, EDC, and the near public library are advancing 24 affordable housing projects on public sites in 2024 that will ultimately create or preserve over 12,000 housing units The development of these sites will be guided by robust community engagement that ensures local priorities are at the forefront of every public site project.

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Our enforcement and neighborhood services team almost never gets the acclaim that they deserve, but they truly are the unsung heroes keeping Tenen safe.

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Each day our team responds to housing complaints and issues violations, holding landlords accountable.

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By intensifying our focus on self closing doors, Thanks to this body and fire safety protocols, inspections yielded a significant increase in violations.

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Issuing nearly 50,000 in just fiscal year 23.

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Our team also intervenes to make emergency repairs when landlords fail to address hazardous conditions, prioritizing the health and safety of New Yorkers through litigation efforts, including securing orders to correct and civil penalties, which were referenced before, the appointment of 7 day administrators or even jail time when warranted have enforced the laws against some of the most notorious landlords just this morning.

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We announced that New York City's worst landlord will soon be arrested HPD secured a warrant for his arrest and commit commitment to civil jail for notorious landlord Daniel O'Hep Shalam for neglecting 2 Washington Heights buildings with 700 open violations and dangerous conditions.

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And just for the record, this only represents a small portion of his portfolio.

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We continue to escalate enforcement at Ohip Shalom's other properties, as well as against any landlord who thinks they can flout the law.

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This administration prioritizes health and safety of tenants escalating action against negligent landlords and to the full extent of the law.

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We encourage you all to find out more about our efforts through our new ABCs of housing, and we look forward to bringing this information about tenant's rights, owners' responsibilities, and all of the city's resources, the tenants and property owners as we engage in our HPD in your district outreach this summer, which we encourage you to sign up.

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We'll talk about a little bit of that later.

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Regarding the management of our property, as you know, we all we are also a landlord, the city of New York.

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Our division of asset and property management is responsible for ensuring the longevity and affordability of units.

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The agency has created and preserved.

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We don't own those.

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We're focused on proactively identifying at risk buildings and portfolios to stabilize struggling and mismanaged assets.

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The division tracks real time information on the physical and financial condition of properties.

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This tracking is used as an early warning system to detect and mitigate potential risks to buildings.

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Working with owners, partners, and the office of development, the division helps reposition projects using a variety of approaches, including financial assistance, management changes, and sometimes ownership changes.

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We also oversee the tenant interim lease program.

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Which trains and assists tenant associations and city owned buildings to develop economically self sufficient, low income housing cooperatives.

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Not to mention the important and severely underfunded portfolio of city sponsored Mitchell LAMA Developments, HPD and HDC, continue to work to address the rehabilitation needs of the aging Mitchellama stock and preserve the long term affordability of all remaining city on city Mitchellama units.

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And I'm nearing closing by offering an invitation to you Even with our our budget requests met, we can't win this fight without legislative changes at both the city and state levels.

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New York City's supply of of available.

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Housing simply cannot keep up with the demand to live here.

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So we need your help to approve new tools and land use changes.

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Here at home, we need the city council and our neighbors to help create a city of yes for housing, a set of zoning changes we can make happen at the city level to create a little more housing in every neighborhood across City.

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City of Yes focuses on tailored policies to support more housing from the highest density to the lowest density areas.

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Taken together, these small changes will have a big impact on New Yorkers housing needs needs without overburdening any one areas in restructure or creating the dramatic change that New Yorkers often fear.

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Approving this city wide change to what is and isn't allowed to be built here stands as a critical step toward creating a healthier housing market.

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Amid this challenging landscape, we extend the heartfelt plea to each one of you and your colleagues that stand with us to pass comprehensive legislation at every level of government to help create new homes.

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Changes in state law would encourage new affordable house in construction to alleviate the shortage of homes and support Midland Low Income families.

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In Albany, we must create a new affordable housing tax incentive, facilitate office conversions for affordable homes, create safe basement apartments and remove the cap on floor area ratio to allow for the construction of more affordable homes.

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And in Washington, we need Congress to act with urgency and do everything in their power to provide the federal resources to tackle our growing affordable housing crisis.

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While we were relieved to see Congress largely spare our most critical federal housing programs from drastic cuts in fiscal year 20 in the fiscal year 24 spending deal.

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These federal investments are vastly insufficient obviously to meet the affordable housing needs of New Yorkers.

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More must be done.

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First, The Senate must follow the House's lead and immediately pass the tax relief for Americans American Families And Workers Act, which includes 2 critical affordable housing tax provisions that could help finance an additional 44100 affordable homes in New York.

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Over the next just the next 2 years alone.

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Also, our congressional leaders must pass fiscal year 25 spending bills with the highest levels of funding possible for the federal housing programs our city needs and depends on to continue building and maintaining our affordable housing stock.

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As we grapple with the economic pressures and the stark reality of of a 1.4% vacancy rate.

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We must remember that solutions are within reach.

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It should come as no surprise that any New Yorker who has needed a new apartment struggled to pay rent or to make ends meet could tell you that there aren't enough homes here.

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Let's transform our experiences into a force for change.

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Let's champion policies that pave the way for a city where everyone regardless of income can find solid stability in a place to call home.

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This might be the city that never sleeps, but together we can make sure it's also a city where everyone has a safe, stable and affordable home to lay their head at night.

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Thank you, and I look forward to trying to best answer your questions today.

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