Preservation of existing affordable housing

Effective Code Enforcement as a Key Tool for Preserving Real Affordability

There is broad agreement that City government can and should be much more aggressive in enforcing all relevant codes, laws, and regulations that are designed to protect tenants and preserve the real affordability of housing. While Rent Stabilization, state administered Mitchell-Lama, and other affordable housing programs are not administered at the City level, below are recommendations for how City agencies and officials can do more of this enforcement and hold landlords accountable for bad behavior while protecting our existing stock of affordable housing.

Neighborhoods with widespread neglect of housing conditions are increasingly the site of rapid gentrification. Intentional neglect, combined with harassment, pressures to accept buy-out offers, and other tactics, are used by owners to vacate entire buildings of their long-standing tenants. They then renovate and rent the same apartments at amounts beyond the reach of former tenants, who are predominantly low-income people of color. Rent stabilized buildings are particularly susceptible to this practice.

As the current Administration is set to unfold its agenda for the construction of 200,000 affordable housing units in the next decade, it should also address the rapid loss of affordable housing across the City, in particular in low-income communities of color where escalating rents and permanent displacement are most pronounced. Effective Code enforcement is a means of preserving the quality of the City’s existing affordable housing stock while also stemming the tide of gentrification by eliminating factors that drives low-income tenants from their homes. 

The tools:
  1. HPD’s Alternative Enforcement Program (“AEP”) should be expanded. By selecting the 200 buildings with the worst conditions in the City and by making repairs when landlords fail to comply, this Program has positively impacted thousands of apartments during its seven year existence. The Program’s own success is grounds for enlarging its scope and coverage. In addition, HPD should increase its profile in AEP buildings and help prevent displacement by forcing landlords to post notices concerning the building’s placement in the program and by distributing “know your rights” materials to tenants, especially in rent stabilized buildings.
  2. To incentivize compliance in the context of the most serious housing code violations, the City should increase civil penalties and inspector fees for “Class C” violations at large, and in particular for heat and hot water violations. On the administrative front, HPD should use its Emergency Repair Program to the fullest extent combined with foreclosing on repair liens more aggressively. At the same time, tax lien sales should be reformed to promote the transfer of neglected buildings to affordable housing providers as opposed to the highest bidder.
  3. To better address the high incidence of asthma in dwelling units were mold is prevalent, the City should enact comprehensive mold remediation legislation to require mandatory annual inspections for indoor allergens that trigger asthma. The legislation should also impose standardized remediation rules and procedures, as well as require HPD to make repairs and charge landlords who fail to do so.
  4. Target enforcement activities on landlords who house low-income tenants. This means focusing enforcement efforts on Section 8 landlords, landlords that receive massive tax breaks through the J-51 and 421a programs, and landlords with overleveraged portfolios of rent regulated housing who fail to make repairs as a cost-cutting measure. With respect to Section 8 housing, these tenants are at risk of losing their housing through no fault of their own when their landlords fail to comply with housing quality standards (HQS). All too often, Section 8 landlords who displace tenants will rent newly renovated units to tenants with much higher incomes. HPD should focus code enforcement resources on these building to preserve Section 8 tenants in their homes, in particular those Section 8 tenants who are residing in rent stabilized units. HPD should work closely with the other agencies administering Section 8 benefits (NYCHA and DHCR) to identify Section 8 units in need of Code Enforcement.
  5. Promote the type of City/State coordination that may result in much needed relief for tenants living in substandard conditions. HPD should establish a mechanism to share its enforcement results with the DHCR’s Tenant Protection Unit (TPU), and the TPU should in turn initiate rent reduction proceedings without the need for a tenant complaint.
  6. Establish broader administrative mechanisms to increase code compliance and fine collection. A Repair Enforcement Board is one such mechanism whereby they city could impose and collect fines for code violations, as well as foreclose on certain unpaid fines. Currently, when HPD places a violation, fines begin to accrue if the landlord does not address the condition within the timeframe provided by law. However, only a Judge can order said fines to be paid after a lawsuit is commenced by the City or tenants. Not only may a lawsuit take months, even years, but once in court many such cases settle for an order to correct the violations without the imposition of any fines. Currently, HPD simply does not have the resources to pursue and recoup all of the fines landlords are liable for in court and as a result landlords fail to make repairs with impunity. By creating an effective mechanism for fine imposition and collection, the City can create a financial incentive for repairs and proper upkeep that is largely lacking under the current system.
  7. Reforming the City’s Tax Lien Sale Program. The City should add code enforcement liens to lien sale program and move all tax lien sale buildings to the City’s third-party transfer program rather than tax lien sale. All buildings that are not redeemed go to third-party transfer get buildings into the hands of long term affordable owners and developers. Expand or implement tools to. Add Emergency Repair Program liens into the tax lien sale program so that the buildings with the worst conditions, especially those in overleveraged, speculatively purchased multi-family portfolios, are transferred to more responsible owners, preferably non-profit developers or those who have a record of preserving true affordability for low-income families.
  8. Cracking Down on Airbnb and Illegal Hotels. Airbnb is fueling gentrification in many neighborhoods by incentivizing higher rents and helping to push out low-income and moderate-income residents. The Illegal Hotel Law passed in 2010 strengthened the law requiring that residential units be occupied for periods of at least 30 days.  The Mayor’s Office of Special Enforcement is charged with cracking down on illegal hotel operators and should be expanded and beefed up with additional resources. That unit should be cracking down on Airbnb and other companies that are illegally converting apartments into hotels. Airbnb’s recent offer to pay more taxes in New York does not change the fact that it is driving up housing costs across the City.
  9. Improve DOB Enforcement in Buildings Under Construction. The Department of Buildings (DOB) can help ensure the health and safety of families who occupy buildings that are under construction or renovation by disallowing self-certification of plans by architects when landlords are doing extensive construction/renovation in these buildings, increasing fines and violations when landlords do work without permits or are doing any illegal work, change the basis for which DOB issues vacate orders and instead have them issue orders to correct, create a bad contractor list, for contractors who engage in illegal construction/renovation, and post a tenants bill of rights in buildings undergoing construction and renovation.

Additional Strategies to Preserve and Enhance Real Affordability

In New York City, from 2002 to 2011, there was a 39% drop in the total number of apartments affordable to a family with an income at 200 percent of the federal poverty line.  That means that the City lost 385,000 units of housing affordable to low-income New Yorkers. The government-assisted share of the City’s housing stock has been declining for many years. Additionally, much of the newly developed government-assisted housing stock is targeted at higher income New Yorkers through Low Income Housing Tax Credits. This is in comparison to the Mitchell-Lama and HUD Subsidized, deeply affordable, housing stock which has decreased over the years as landlords privatize their developments. Currently there are almost 100,000 Mitchell-Lama and HUD subsidized housing units left in New York City. Additionally, there are 80,000 units provided under the Low Income Housing Tax Credit program. 
SROs are a critical part of the remaining affordable housing stock and housing of last resort for many low-income and working poor New Yorkers. Landlords harass tenants out with deteriorating living conditions among other means in order to convert the buildings for more profitable means, including illegal tourist rentals or lucrative contracts with City agencies to house the homeless. Landlords can afford to warehouse units for years until the building is empty when they can more easily convert the building or sell it for higher profits.

Development of new affordable housing cannot be the only solution to the problem and preservation of affordable housing stock may be the most cost-effective step toward meeting the need for affordable housing. Below are recommendations for additional preservation strategies.

  1. Repeal the Urstadt Law to Regain Home Rule of Rent Laws. The administration should lobby the State legislature to repeal the Urstadt Law, enacted in 1971. This legislation prevents the City from strengthening laws that protect the nearly 2.5 million tenants who live in rent-stabilized or rent-controlled apartments and is a potential stumbling block for mandatory inclusionary zoning and other innovative strategies to create more affordable housing. Vacancy deregulation is projected to cause the City to lose more affordable housing than it can create, and could also be repealed by the City if the State repealed the Urstadt Law.
  2. Preserve Mitchell-Lama Housing. HPD should develop a preservation plan to preserve the remaining City-supervised Mitchell-Lama developments. Additionally, the City should explore the usage of Article XI as a tool to bring former Mitchell-Lama developments under a regulatory framework, and when Article XIs are used as a Mitchell-Lama preservation tool, to ensure that the income targeting matches is neighborhood-specific and no Major Capital Improvements that are permitted while the owner is receiving an Article XI tax abatement.
  3. Preserve Project-Based Section 8 Housing. The City should work with the United States Department of Housing and Urban Development to identify buildings at risk of loss of affordability and work closely with advocates to preserve those buildings as a long-term affordable housing resource.
  4. Preserve Low Income Housing Tax Credit Units and Housing Development Fund Corporation’s. Over the last number of years, the City has preserved affordable housing through LIHTC’s and through HDFC’s. However, many of the affordability restrictions are contained in complicated legal agreements between the owners and the City. The City should create a centralized searchable database which would provide the public with information about these units to ensure that the tenants and cooperators understand their rights. Additionally there should be increased oversight over owners to ensure they are meeting their low-income housing tax credit obligations. Lastly the City should develop a plan to address the end of affordability restrictions of the remaining LIHTC units and to ensure permanent affordability.
  5. Preserve Single Room Occupancies (SRO). The City should (a) Stop rewarding SRO owners who harass permanent tenants out of their buildings in order to empty units for lucrative contracts with City agencies (DHS, HRA, HPD, etc. for upwards of $3,000/month) and preserve the housing as affordable permanent housing; (b) Explore solutions to warehousing SRO units; (c) Propose legislation to amend the law to increase the inquiry period for Certification of No Harassments from three to ten plus years.
  6. Preserve Affordable Rent-Stabilized Apartments. To correct the high increases of the past years approved by a Mayor Bloomberg appointed Rent Guidelines Board, this Administration’s Rent Guidelines Board should issue a rent guideline which provides for a rent freeze for two consecutive years. Additionally, the City should support the tenant movement in the 2015 rent law renewal campaign to repeal vacancy deregulation and reform the Major Capital Improvement System, the Preferential Rent system, the Individual Apartment Improvement System, the Vacancy Bonus system, and the Rent Control System as the means of raising rents to the decontrol threshold. HPD should work with DHCR to identify landlords who are deliberately violating the rent laws and to take action where necessary.