End Apartment Warehousing Coalition: October 2023

The new NYS Homes and Community Renewal regulations are a good start, but

state bills need to be signed by Governor Hochul now to make the changes more

comprehensive and permanent

New York, NY — With a lot of hard work, testifying, and campaigning, the Coalition to End Apartment Warehousing, a New York City tenant and advocacy group, has helped win new regulations at the New York State Homes and Community Renewal (HCR) agency to close a loophole in the 2019 Housing Stability and Tenant Protection Act (HSTPA). The new regulations — which take effect November 8 — will enable New York City to retain more of its affordable, rent-regulated housing. We urge Governor Hochul to sign S2980/A6216 to make the changes more comprehensive and permanent.

Through that loophole in the HSTPA, owners have been able to set a new, market-rate first rent on rent-stabilized homes by combining adjacent, formerly affordable, regulated apartments into single large “Frankensteined” monsters at sky-high rents.

The loophole has encouraged landlords to warehouse vacant rent-regulated apartments —sometimes for years — in the hope of Frankensteining them later when an adjacent apartment becomes empty.

In one building, for example, an empty stabilized apartment (rent: about $850 a month) was combined with an unregulated market-rate apartment directly above it (rent: about $3,000 a month). The result was a duplex apartment advertised on Streeteasy.com for $13,000 per month and the removal of yet another affordable apartment from New York City’s housing stock.

The practice of Frankensteining — combining separate, adjacent apartments into one single larger apartment — has made an untold number of affordable apartments unavailable throughout the city.

Frankensteining has converted almost entire buildings in stable, affordable communities into extremely high-rent buildings, often with a rotating cast of tenants who cannot afford to stay long term.

Estimates from the city and others put the range of warehoused, vacant rent-stabilized apartments in New York City anywhere from 13,000 to 60,000 — with all of those apartments sitting empty during an unprecedented housing crisis. (Unfortunately and shamefully, the city and state don’t maintain accurate data on rent-regulated apartment vacancies.)

Tenant Sue Susman of Stellar Tenants for Affordable Housing said, “These new regulations may make a big difference in my building where the landlord is keeping 13 rent-stabilized apartments off the market — and has already Frankensteined 4 others. So many people need those affordable homes, and most of the vacant apartments need little more than a coat of paint.”

Cooper Square Committee organizer Jodie Leidecker said, “It’s a shame that it’s taken almost five years since the passage of the HSTPA to close this loophole, and countless truly affordable apartments have been permanently lost to high rents. It’s not a case of too little too late, but when we talk about preservation, this was an obvious no-brainer. Most buildings I’ve worked with since the passage of the HSTPA have experienced Frankensteining. We hope these rules help tenants in mostly affordable rent-stabilized apartments feel slightly more protected from predatory real estate interests instead of just being sitting ducks.”

In response to the ongoing advocacy of the Coalition to End Apartment Warehousing and other tenants and tenant groups, New York State’s housing agency proposed these regulations, and they should make a difference. The new regulations, which clarify the

HSTPA’s intent, say that the new rent of a Frankensteined apartment must be the combined previous legal rents of the apartments - and where a rent stabilized unit is expanded with non-apartment space, the rent will be proportional to the change in the unit’s size (plus any “individual apartment increases” capped at $85 over 15 years and normal Rent Guidelines Board increases). So that $13,000 rent seen above would be more like $5,000, and the apartment would stay rent stabilized.

Moreover, landlords who created those vacancies by harassing tenants out, or by fraud or evasion, may be entitled to no increase at all.

Tenant Edward Ratliff from East 26th Street: “These regulations can potentially really help our city have more affordable, regulated apartments. Unfortunately, the changes come too late for my building, where a large percentage of the affordable apartments have already been lost to Frankensteining.”

By discouraging Frankensteining, the new regulations will preserve existing affordable housing in the midst of the one of the greatest housing shortages New York has ever seen.

We thank the many tenants who worked hard to demand these changes, and we are glad the New York State Homes and Community Renewal enacted these long overdue new regulations.

#####