Research and data of independent housing policy experts is all drawing the same conclusion: residential buildings in the five boroughs with high numbers of rent-stabilized apartments are in severe economic distress.
The majority of small property owners fall into this category of highly-rent-stabilized buildings — which is why we are urging the Rent Guidelines Board when it meets tomorrow night to set rent increases for one and two-year leases of rent-stabilized apartments at the highest end of the preliminary range they voted for last month.
Anything less will push economically distressed buildings over the cliff. Landlord hyperbole? Hardly. It’s the reality we live every day.
One of us manages three buildings with 7-30 units in under-served neighborhoods in the Bronx. All three are operating in the red (between $14,526 and $81,575) because the rent income of each is lower than their skyrocketing operating costs.
Further proof was last month’s city property tax lien sale. One of us, who is second generation of a working class migrant family from the Caribbean, owns a 14-unit building now on the lien sale list and in danger of foreclosure. The rent income wasn’t enough to cover the building’s property taxes.
Critics say owners can’t manage their businesses; we say it has nothing to do with our business acumen. We don’t dig ourselves into these holes, others put us there. The Housing Court system allows deadbeat tenants to live rent-free for months, sometimes years, while waiting to resolve rent disputes. Most skip without paying any of the back rent.
The RGB has failed our buildings for decades. Building operating costs increased 39.1% from 2017 to 2024, but rent increase adjustments during that same period were just 14%. Economists agree that low rent increases and rising operating costs is not a sustainable formula for the largest providers of rent-stabilized housing.
Buildings continue to fall into economic distress because of government’s housing policies. In 2019, the industry cautioned Albany lawmakers that the low cap on renovation expenditures passed along to tenants after long-time renters vacate would prevent small owners from upgrading their rent-stabilized units, which typically operate on tight margins. No secret there; we open our books every year to the Department of Finance. Apartments now sit empty because owners can’t afford to modernize or bring them to code.
They say freeze the rent; we say, then freeze our expenses. Freeze property taxes and water/sewer rates. Enough with the tired “greedy landlords” narrative and shouting “rent freeze” from rooftops. Rent increases go back into buildings; they keep the lights on and elevators running, and pay for the constant repairs in this aging housing stock.
When rent increases don’t keep pace with operating costs, it puts us in a bad position. We sometimes have to decide which bill to pay first, water or electric. We lay awake at night hoping the oil company will wait another month for payment, and the contractor will accept a payment plan. Who do you think foots the bill for government programs like composting and the war on rats?
They say sell the buildings; we say these are our homes, too. Small owners know their tenants by name; they are their neighbors because they live in the building with their own families. Would you rather have faceless, deep-pocketed corporate landlords who are in it for the profit? Or owners who look like you and come from the same cultural backgrounds, and respond when an appliance has to be replaced, or a water leak fixed?
The rent-stabilized housing crisis doesn’t take sides. What happens to owners affects the families we house in working class, multicultural neighborhoods throughout the five boroughs.
City, state and federal assistance and rent-subsidy programs are lifelines for tenants. No such help for us; it’s just the opposite. Government maximizes our expenses with increased property taxes and water/sewer rates, while minimizing our income by capping rent increases.
The RGB’s reports on income and expenses of rent-stabilized buildings, and data from independent experts like the NYU Furman Center, all point to record numbers of highly-rent-stabilized buildings in economic distress.
Maybe it’s time for the RGB to scrap the process that uses the same metrics to determine rent increases for all rent-stabilized buildings. Maybe they should separate and set higher increases for severely distressed, highly-rent-stabilized buildings. Until then, they must vote for the highest adjustments tomorrow night.
Badillo, Eccles and Gojcaj, members of the Small Property Owners of New York, own or manage rent-stabilized buildings in Queens, Brooklyn and the Bronx.
