Warehousing NOT caused by 2019 law - CityLimits article

 CityLimits

Empty Rent-Stabilized units in NYC Decreased This Year, as 'Warehousing' Debate Rages.

The latest vacancy data now mirrors pre-COVID figures following a "pandemic-height outlier," according to New York State's affordable housing agency. The number of empty apartments also matches the vacancy rate prior to landmark 2019 tenant protections that landlords blamed for the spike in empty units last year. 

by David Brand, published November 17, 2022.

EXCERPT: "With hundreds of thousands of low-income New Yorkers in need of an affordable home, even one warehoused unit is one too many,” said [Larry] Wood, of Goddard Riverside. 

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EXCERPTS (headings added)

Data incomplete

But there are several limits to the point-in-time data. More units may have become vacant since the April 1 registrations, while many vacant units may now be leased-up and occupied, [Legal Aid Society Staff Attorney Ellen] Davidson said. 

A fair number of rent-stabilized units have not been registered at all, meaning their status is unclear, said Larry Wood, director of advocacy and organizing at Goddard Riverside. HCR said landlords have so far registered around 850,000 apartments this year, down from around 928,000 in 2019. Many owners end up updating the agency late, while some fail to notify HCR.

 “It’s what the landlords are choosing to report,” Wood said. 

...

The End Apartment Warehousing Coalition, made up of tenant associations and advocacy groups from across the city, have honed in on rent-stabilized vacancies in wealthy areas, like the Upper West Side, and rapidly gentrifying neighborhoods, like Williamsburg, Bushwick and Harlem. There, they say, owners are more likely to hold units off the market to eventually demolish a building or legally combine multiple units and set a new higher base rent—a practice known as “Frankensteining.”  

“It’s an on-the-ground tabulation,” said Colin Kent-Daggett, a senior community organizer with St. Nick’s Alliance and a member of the End Apartment Warehousing Coalition. “Door by door surveys, and that’s how we’ve been able to find patterns of intentional warehousing.” 

Landlords can afford upgrades needed for habitability

Most of the vacancies last year were in higher-rent units in larger buildings, HCR said, though the agency said it could not provide specific rent breakdowns on the empty apartments.

....

Few have formally claimed financial hardship, however. HCR allows owners to apply for a rent adjustment if they are in financial trouble. HCR said they have received six hardship applications from landlords since 2019 and granted none of them. 

An analysis of 2020 data by the Rent Guidelines Board also found that apartments in buildings with rent-stabilized units generated $545 per month, enough that “revenues exceed operating costs in nearly all buildings, yielding funds that can be used for mortgage payments, improvements and/or pretax profit.” The RGB will not consider 2022 data for another two years.

2019 Housing Stability & Tenant Protect Act didn't cause warehousing

Sam Stein, a housing policy analyst with the Community Service Society (a City Limits funder), said those similar vacancy counts undermine claims that the rent laws have made property ownership unprofitable. 

“If the number is the same as it was before HSTPA then it makes no sense to say HSTPA is the thing causing the vacancies,” Stein said.

Even one warehoused unit is too many

The HVS is also used to determine the overall apartment vacancy rate in New York City. A vacancy rate below 5 percent is considered a “housing emergency,” triggering the continuation of the city’s rent stabilization laws. The most recent survey, conducted between February and July 2021, found that 4.5 percent of New York City’s roughly 2.3 million apartments were vacant and available for rent last year, including less than 1 percent of all units priced below $1,500 per month.

In that context, with hundreds of thousands of low-income New Yorkers in need of an affordable home, “even one warehoused unit is one too many,” said [Larry] Wood, of Goddard Riverside. 

Empty apartments impact neighbors

At a rally against warehousing outside City Hall earlier this month, Williamsburg resident Silo Espinal described how his landlords tore apart a unit after it became vacant and removed insulation from the wall. “He's gutted their apartments, destroyed their apartments for seemingly no reason,” Espinal said. “If It's 40, 30 degrees we'll start to get frost.”