In July of this year, Mayor Michael Bloomberg decided to slash $64 million dollars from the “Advantage Program’s” $140,000 budget. This rent subsidy kept as many as 15,000 formerly homeless men and women from returning to the streets. As of now, there are about 43,000 homeless walking the streets, the most since the Great Depression, and this includes 17,000 children, according to the Coalition for the Homeless. Adding to this problem, is that landlords and building owners around the city are known to be warehousing rent regulated units until they can be added to the market rate stock, in part due to vacancy decontrol.
Vacancy in Manhattan is around 1 to 2 percent; the number of empty and unoccupied units is considerably much higher. Apartments are simply being warehoused to allow the real estate industry to argue that renters are willing to pay the current going rate for market-rate rentals. There have been demands for the city to step in, but the landlord’s financial incentives and a slow-moving system of city policies, have added to the paralysis of any progress. The New York City Economic Development Corporation, formed in 1991, who is supposed to govern the sale of abandoned properties to private developers, receives private funds, which means it is under no obligation to release the names of the new property owners.
There is also the continuing problem of illegal hotels, which continues to be a favorite practice of building owners of rent regulated apartments; to clear out their units while at the same time, earn top dollar renting out space to tourists, often creating safety concerns, along with the explosions of harassment by management towards the tenants. In the summer of 2010, tenants rights groups celebrated when the illegal hotels bill was signed in Albany, believing it would take a bite out of the problem. But according to City Limits Magazine, the Mayor’s Office of Special Enforcement has written over 1897 citations, with more than 97% coming after May 2011, when the law went into effect. Despite the law and the ensuing crackdown, the problem, continues to allow building owners to bleed affordable housing out of the rent regulated market, and it is only picking up speed. Susan Stetzer, the District Board Manager for Community Board 3, was quoted as saying that, “The new law seems to have no effect.” Part of the problem is that OSE is underfunded with very few inspectors for all five boroughs. The other problem is that the fines handed down for these violations is a flat rate of about $800 dollars, no matter how many units are being used or for how long. There is a bill currently moving through the City Council which would fix the latter situation, but the over burdened staff of OSE will continue to hamper efforts at enforcement. This Mayor has yet to address this situation. With businesses like Airbnb continuing to act as enablers to landlords looking to break the law, this will escalate. Their CEO, Brian Chesky, admits that building owners who use the site can bring in $20,000 worth of tourist traffic – to the chagrin of anyone living nearby.
And finally, the Rent Guidelines Board approved the latest round of rent hikes this past June. For one-year leases, renters can expect an increase of 3.75%, while two-year leases can expect an increase of 7.5%. All told, rent regulated tenants remain in the crosshairs of the real estate industry, which seems intent on making New York a museum city with buildings for display and transient use only, and the working class priced out of town, altogether.
Posted by Matthew Abuelo
on September 21, 2012. Filed under FAMILY,Family,NEWS,Times Square Community.
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