State proposes regs to rein in Frankensteining

Landlords have been warehousing vacant rent stabilized units and then merging them with other space (sometimes unregulated apartments) to create "Frankensteined" apartments with brand new rents - often sky-high. 

The State's housing agency has just proposed regulations to implement the 2019 Housing Stabilization and Tenant Protection Act.  Rent Stabilization Code Amendments - HSTPA Revisions, pages 23-25.   These amendments include a new section, §2521.1(m) to regulate the rents and status of Frankensteind (combined) apartments.  The section says:

1. Rents for combined apartments will be the combined last rent of each rent stabilized apartment, plus any individual apartment improvement increases.  If a rent stabilized apartment is increased in size by adding a market apartment, the new rent stabilized unit will combine the two legal rents.  If a rent stabilized apartment is reduced or increased in size (for example by adding hallway space), the rent is changed by same percent as the square footage is changed. 

2. Rent stabilization will cover the whole new combined apartment if even one of the original apartments was rent stabilized. 

3. Landlord fraud, harassment, or evasion can bar any rent increase.

The hearing on these and other regulations will be on November 15, 2022 from 10 AM to 4 PM at 1 Bowling Green in lower Manhattan. 

Click on "read more" for the proposed section. 

Credit for photo: CreativeCommons, 5-24-2015.

CityLimits: City's housing shortage demands end to warehousing

Opinion: City's Housing Shortage Demands an End to Apartment Warehousing

By Sue Susman, Pat Loftman, Colin Kent-Daggett and Edward Ratliff. Published 8/26/2022

"Many homeless New Yorkers are working and could afford rent stabilized rents - yet landlords hvae been warehousing rent stabilized apartments."

Photo by Benjamin Kanter/Mayoral Photo Office 

Landlords using warehousing loophole to spike rents

GOTHAMIST

How landlords continue to use a rent loophole to spike regulated rents

While the 2019 Housing Stability and Tenant Protection Act cracked down on several of the most common ways landlords raised rents on regulated apartments, such as bumping the rent by 20% once the units became vacant, the law didn't directly address one workaround: combining a regulated unit with a market rate unit to make a bigger, expensive "Frankenstein" apartment. State regulators said back in the spring of 2020 that they knew about the practice, but nothing has yet to be done about it, as landlords continue to combine units that now cost three times what they did as regulated apartments.

Rally at 191 Bedford Avenue

From Assembly Member Emily Gallagher's Twitter account (text and photos) :

We’re at 191 Bedford Ave where landlord Bluesky Group has been warehousing empty units, harassing tenants and leaving the building in disrepair. Their end game is clear: kick out residents and jack up rents. Unacceptable.

Joining Forces with STS!

The Coalition to End Apartment Warehousing is joining forces with the Stand for Tenant Safety.  That group effectively got passed 13 New York City Council bills on construction as harassment, including creating the office of Tenant Advocate at the NYC Department of Buildings. 

We'll work together to help pass Assembly Member Linda Rosenthal's bill. A.5988, and a City Council bill to protect tenants living near warehoused units. 

Join us!

Our letter to the Rent Guidelines Board's tenant and public members

Letter emailed to Chairman David Reiss, to tenant members Sheila Garcia and Adán Soltren and to public member of the RGB Arpit Gupta, Christina DeRose, Alex Schwartz, and Christian González-Rivera:

 

We are writing on behalf of the Coalition to End Apartment Warehousing.  

As you may know, in 2019 CHIP said landlords were warehousing some 70,000 vacant rent stabilized apartments. The number has surged since then. In Park West Village, for example, out of 864 rent stabilized apartments, there are over 100 apartments being warehoused for times ranging between months to over five years. So it is likely that the total number of rent stabilized apartments that landlords are refusing to offer for rent is closer to 100,00 city-wide. 

First, that will skew any income data on which the RGB relies. 

Second, landlords who are holding apartments vacant self-evidently do not need any rent increase. If they actually needed more income for a fair return on their investment, they would rent out those apartments. 

In addition, landlords are more than making up for any deficit with extremely high rents. In Stuyvesant Town-Peter Cooper Village, Blackstone is now charging astronomical rents for regulated units held vacant for months that will make up for any lost income during the pandemic.   In Central Park Gardens, a former Mitchell-Lama on the Upper West Side, Stellar Management is asking $9,875 for one unregulated unit and over $6,400 for another.   

Our coalition therefore urges that you consider the warehousing of rent stabilized units with the other data and vote against any rent increase. 

Thank you.

Sue Susman, Stellar Tenants for Affordable Housing, 

president, Central Park Gardens Tenants’ Association

Patricia Loftman, president, Park West Village Tenant Association

Anne Greenberg, vice president, Stuyvesant Town-Peter Cooper Village Tenants Association

Denisse Miramon, St. Nick’s Alliance

Landlords offer to rent out vacant apts IF state weakens tenant protections

The Community Housing Improvement Program (CHIP), an association of owners of rent stabilized buildings, is offering to rent out vacant apartments if the state will roll back some of the protections of the 2019 Housing Stability and Tenant Protection Act.  

https://www.amny.com/opinion/op-ed-there-are-20000-affordable-empty-apartments-in-nyc-lets-get-them-unlocked/

EXCERPT:

Fixing this problem would actually not cost the government anything. It would also not raise the rent one cent on any existing tenants. [Emphasis added.] The government just needs to let the property owners set a new first rent on the unit that will allow them to justify the renovation costs needed to fix up the apartment. Doing this would create an instant boom in housing supply in all neighborhoods of the city. It would also create a lot of jobs. CHIP estimates that recapturing these units could create $1.5 billion to $2 billion in economic activity over the next nine months. 

Affordable housing shouldn't be solely for those who already have it - although that affordability must be protected. Those 70,000 vacant rent-stabilized units should be put back on the market for those who need them.

In addition, CHIP can't legitimately complain that it's not worth their while to rent out vacant apartments. Landlords not making a fair return on investment can always open their books to DHCR and ask for a hardship increase. They don't do it because they are making more than a 5% profit. If it's not worth it for them to be landlords at their current rate of return, they're free to stop being landlords. 

Meanwhile, holding 70,000 vacant rent-stabilized apartments off the market to pressure Albany seems awfully close to hostage-taking - especially with many lower-income people whose vouchers would cover the rents.