Tag Archives: NYC

A Resilient NYC

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NYU’s Furman Center released a report, The Price of Resilience: Can Multifamily Housing Afford to Adapt? It explains that storm-proofing New York City

poses several special challenges not shared by all coastal areas. First, New York City is largely built out, with much of its building stock long predating current flood-resistant design standards. Resilience in New York, then, primarily means retrofitting older buildings, not just strengthening building codes for new construction. Second, much of the official guidance about how to retrofit residential properties to reduce risk and lower insurance premiums is geared toward 1-4 family buildings, reflecting the national housing stock. In New York City, though, only one-third of the buildings thought to be vulnerable to flooding are1-4 family, detached homes. A much larger number of housing units vulnerable to future storms are located in roughly 4,500 multifamily buildings with five or more rental units. Finding ways to cost effectively retrofit these types of buildings to protect residents and reduce insurance premiums for owners needs to be central to New York City’s storm-preparedness efforts.

Finally, the extreme shortage of affordable housing in New York may make the direct and indirect costs of retrofitting particularly hard to bear. Based on current federal policy, increased flood risk requires for many buildings either investment in physical improvements or payment of higher insurance premiums. Without external funding or other relief, there is no clear avenue to enact these resilience improvements while maintaining affordability. Eliminating all units below the predicted flood level, for example, could result in the loss of thousands of indispensable housing units. Even if units are not lost, property owners may pass on the costs of retrofitting buildings to residents through a rent increase, reducing the supply of affordable units in New York City’s coastal areas. For buildings that are constrained in their ability to raise rents and raise funds for improvements, like many of the rent stabilized and subsidized buildings in the city, the financial burden of making costly retrofits might be overwhelming, leading to the conversion of those buildings to market rate (when permitted), unsustainable operating budgets that may require a bail-out, or a large number of buildings left unprepared for future storms. The costs of not retrofitting, however, may be even more burdensome: building owners may face skyrocketing flood insurance premiums if they do not retrofit their buildings.

While I am not so sure that storm-proofing will be what pushes New York City’s housing stock into the unaffordable column (I think the relentless increases in demand might just to the job for units that are not rent regulated), the Furman Center report reminds us that we have a lot to do to protect New York from the next big storm. The Bloomberg Administration did a lot in a short time to identify what the City can do to increase the City’s resiliency. Given the quality of his housing and economic development team, there is reason to hope that the de Blasio Administration will continue to tackle the threat of climate change in a productive way.

The Furman Center report provides three concrete recommendations to ensure that NYC’s large stock of multi-family housing in flood zones is protected from future storm events:

  1. The Federal Emergency Management Agency (FEMA) should modify the guidelines for its National Flood Insurance Program for coverage of existing multifamily buildings;
  2. New York City should expand its Flood Resilience Zoning Text Amendment to cover buildings in the 500-year floodplain; and
  3. The city should revisit its existing rehabilitation programs to ensure that resilience measures can be readily funded; and it should require that buildings in the 100-year and 500-year floodplains that receive city assistance have adequate emergency and resilience plans.

These all seem like reasonable policies that should be implemented asap.

Urban Reviewer: NYC’s Neighborhood Plans

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NYC land use geeks will want to check out the Urban Reviewer. From its website,

The City of New York has adopted over 150 master plans for our neighborhoods. You can see which areas have been affected and what those grand plans were here.

Neighborhood master plans – often called “urban renewal plans” – were adopted to get federal funding for acquiring land, relocating the people living there, demolishing the structures and making way for new public and private development. Plan adoptions started in 1949 and many plans remain active today. Development in the plan areas sometimes happened, like Lincoln Center, and sometimes didn’t, like many still-vacant lots in East New York and Bushwick. Areas were selected for renewal because they were considered blighted or obsolete. The “blight” designation always came from outside the communities that got that label – from inspectors working for the mayor’s Committee on Slum Clearance in the early period and Housing Preservation and Development (HPD) employees in the later period.

This is one of those resources that seem pretty obviously useful once someone has gone to the trouble (and great trouble I am sure it was) to construct it. One can imagine urban historians and planners making good use of it as well as community activists. It also provides a great model for other communities to follow.

Kudos to 596 Acres, Partner & Partners and SmartSign for building this resource.

Rent Regulation and Housing Affordability

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NYU’s Furman Center issued a fact brief, Profile of Rent-Stabilized Units and Tenants in New York City, that provides context for the deliberations of the Rent Guidelines Board as it considers a rent freeze for NYC apartments subject to rent stabilization.

Rent regulated (rent stabilized and rent controlled) apartments clearly serve households that have lower incomes than households in market rate apartments. Median household income (fifty percent are below and fifty percent are above this number) is $37,600 for rent regulated and $52,260 for market rate households.Thus, market rate households have median incomes that are nearly 40% higher than rent regulated ones.

The median rent is $1,155 for rent regulated and $1,510 for market rate households.Thus, median rents are about 30% higher for market rate tenants.

Despite these differences, the number of households that are rent burdened (where rent is greater than 30% of income) is similar for the two groups: 58% for rent regulated and about 56% for market rate households. (4, Table D)

The Furman Center brief provides a useful context in which to consider NYC’s rental housing stock as well as the households that live in it. Given the nature of NYC households, however, I would have wished for a more finely detailed presentation of household incomes and rents.

NYC’s distribution of income is skewed toward the extremes — more low-income and high-income households and therefore fewer middle-income ones than the rest of the nation. Given this, it would have been helpful to have seen the range and distribution of incomes and rents, perhaps by deciles. The Furman Center brief indicates that updated data will be available next year, so that may provide an opportunity to give a more granular sense of dynamics of the NYC rental market.

Mayor de Blasio’s housing plan outlines his commitment to preserving affordable housing. One element of that commitment is to preserve rent regulated housing. Understanding that market sector and the households it serves is essential to meeting that commitment.

Affordable Housing Preservation in NYC

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Leaders of Brooklyn Legal Services Corporation A have released a white paper, Mayor de Blasio’s Housing Plan:  The Most Important Housing Plan in NYC History? Just to get the suspense out of the way, they pretty much feel that it is. But they do push the Mayor to pay more attention to the preservation aspect of his Housing Plan. They write,

Based upon our experience, representing the low-income tenants we serve, we have observed that rent decontrol is often brought about by predatory actions from landlords to push protected tenants out of their apartments in order to reach decontrol status. In 2013, over 30,000 New York City families were displaced from their homes. Without access to free legal services, many of these families had to represent themselves in Housing Court and were unable to fight the predatory and often illegal actions that made them lose their homes. The most recent reports from the Task Force to Expand Access to Civil Legal Services commissioned by the Chief Judge of the State of New York stated that 99% of tenants are unrepresented in eviction cases in New York City. The need for legal services is very real, and without increasing the very limited resources available for such services the fight for preserving affordable housing will almost certainly not be successful.

Brooklyn A’s attorneys are constantly witnessing how this perfect storm of rising housing values and limited supply of affordable housing can impact low-income communities. In many neighborhoods landlords are more incentivized than ever to try and push out rent protected tenants by any means necessary, so that they can void the rent protections and bring in new tenants willing to pay the inflated market price. We are currently representing tenants from a building whose main waterline, boiler and gas meters were destroyed in the middle of the night, only a short time after the tenants refused offers by their landlords to get bought out of their apartments. In another recent case the landlord shut off all heat, hot water, and sewage in the building to provoke a vacate order to force the rent-stabilized tenants out. The tenants had to live in emergency Red Cross shelters for a period of time because they lost their home; including one who had lived at the building for thirty years. Unfortunately, these are just a couple of examples of increasingly common practices by landlords to violate and then deregulate those apartments. (2, footnotes omitted)

During earlier run ups in real estate prices, landlords seeking to make a quick profit were known to send in thugs with baseball bats and pit bulls to frighten tenants, particularly elderly tenants, so that they would move and make the apartments available for tenants who would paid higher rents. The predatory equity that has been documented in NYC in the last decade has used less obviously threatening behaviors such as “repairs” that lead to long term loss of utilities and frivolous filings in housing court. But the goal is the same — get rid of tenants paying low rent-regulated rents.  Brooklyn Legal Services Corporation A is right to focus on the role that legal services attorneys can play in protecting existing affordable housing in a cost-effective way.

Reiss on NY RE Regulation

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Law360 quoted me in What’s Up Next In NYC Real Estate Legislation (behind a paywall). It reads in part,

New York City lawmakers have introduced a slew of new bills in recent months that could impact commercial real estate owners and developers with changes like new protections for rent-regulated tenants and more public review for zoning changes. Here are explanations and some experts’ thoughts about the proposed laws.

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Fighting Alleged Double Standards for Regulated and Market-Rate Tenants

City Council members Mark Levine and Corey Johnson are drafting a bill to combat what they claim is a trend of property owners unfairly discriminating against their rent-regulated tenants, preventing them from taking advantage of amenities that market-rate tenants can enjoy.

The issue gained a lot of attention last year when news broke that Extell Development Co.’s project at 40 Riverside Drive might have two separate entrances: one for owners of its condominiums and one for those living in the affordable units.

The “poor door” arrangement, which has reportedly been used at several buildings around the city, sparked outrage from tenants, who argued that developers were abusing the 421-a subsidy program, which gives tax abatements in exchange for affordable housing.

Levine and Johnson’s new bill would alter the city’s rental bias code, which protects tenants from discrimination based on race, gender or age, to include rent-regulated as a protected status.

Under de Blasio’s plan for mandatory inclusionary zoning at all new development projects, the bill appears to be an effort to establish actual integrated communities, said Brooklyn Law School professor David Reiss.

“Mandatory inclusionary zoning is not just about affordable housing; to a large extent it’s about socioeconomic integration,” Reiss said. “I think this bill about double standards is really not about protecting affordable housing as much as it is about respecting socioeconomic diversity.”

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Requiring Two Years of Experience for a Crane Operation License

In April, Manhattan Councilman Benjamin Kallos introduced a bill that would require crane operators to have at least two years of experience working in New York City in order to obtain licenses.

Industry insiders note that the licensing process is effectively controlled by a local union, and many are concerned that this new bill would give the union even more power, essentially blocking the use of any crane contractors that are not affiliated with it.

“There’s a spat between developers and unions, and the bill is firmly taking the side of the unions,” Reiss said. But he added that the real question is what is actually in the public interest. “What is the level of safety that we need?”

The Bloomberg administration had a more developer-friendly approach, creating a plan to allow operators to get licenses if they had worked in a similarly dense city before. But the crane operators’ union sued over those rules, and the litigation remains pending.

Reiss on de Blasio Housing Plan

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Law360.com quoted me in Developers, Attys Embrace De Blasio’s $41B Housing Plan (behind a paywall). It reads in part,

Real estate attorneys and their developer clients are cautiously optimistic about New York City Mayor Bill de Blasio’s new affordable housing plan, lauding its concrete objectives while noting that regulatory and financial hurdles could stall some of the most ambitious elements.

The mayor unveiled Monday the highly anticipated plan [you can find the plan here], which presents a $41 billion investment in affordable housing. He pledged to encourage affordable housing development by breaking down existing barriers to density, from adding efficiencies to the land use review process, to making better use of subsidies and tax incentives, to changing the multiple dwellings law to allow for higher floor area ratios at residential buildings.

The multifaceted approach appeared to appeal to many in the development community, who are eager to build across the city but have been uncertain in recent months about how the mayor’s plans to create or preserve 200,000 units of affordable housing would align — or compete — with their interests.

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While de Blasio’s new housing plan is mum on details, Deputy Mayor Alicia Glen said during the press conference Monday that the administration also planned to “take a hard look at where we are able to rezone or upzone to create more opportunities for affordable housing.”

During the last administration, more than 30 percent of the city underwent rezoning, opening up scores of new lots for developers but enraging many community groups and local residents who feared that new market-rate towers would bring with them skyrocketing prices and gentrification.

De Blasio said Monday, however, that while Bloomberg had changed the rules of land use in much of the city, many opportunities remain to increase density — and therefore affordable housing, with mandatory inclusionary zoning — by upzoning additional neighborhoods.

Experts say this may well be one of the most controversial aspects of the plan, though developers and their attorneys generally welcome it. For the most part, they are pleased with the administration’s direction, but the question remains as to whether the plans will be borne out in the face of opposition, said David Reiss, a professor at Brooklyn Law School who blogs about commercial real estate and housing issues.

“The big debate is: Are we going to have a real commitment to increased density in parts of New York City? And if we don’t, it’s hard to imagine we can really reduce the cost of housing,” he said.