Alarming Distress In Rent-Stabilized Buildings Highlights NYAA Testimony To The NYC Rent Guidelines Board
RGB Data Shows Significant and Growing Financial Hardship in Pre-1974 Buildings Outside The Core of Manhattan.
(New York, NY) – The New York Apartment Association testified before the New York City Rent Guidelines Board on Thursday, highlighting the severe financial distress that thousands of Pre-1974 buildings outside the Core of Manhattan are currently experiencing.
The testimony outlines the steep decline in operating income and its connection to disinvestment in aging rent-stabilized housing. Between 2019 and 2023, the net operating income for Pre-1974 rent-stabilized buildings outside the core of Manhattan has declined by 25.2%, when adjusting for inflation. This has led to a decline in spending on maintenance of 10.5% in that same time period.
“The only way to preserve safe rent-stabilized housing is by making sure operating income covers costs. NYAA works all year lobbying to lower government-controlled expenses on unsubsidized rent-regulated housing. Unfortunately, the costs still are going up and the Rent Guidelines Board is put in a difficult position,” said NYAA CEO Kenny Burgos.
“We are asking the RGB to keep the thousands of failing buildings from being further defunded. We need them to be able to tread water while we step up our efforts to get them help from the city and state government. We are asking for a rent adjustment in line with the RGB’s commensurate adjustment calculations so we can keep hundreds of thousands of apartments from further deterioration,” added Burgos.
Key data points highlighted in the testimony:
From 2019 to 2023 inflation adjusted net operating income declined by 25.2% for Pre-1974 buildings outside the core of Manhattan
During that same time, NOI declined 35% in the Bronx for Pre-1974 buildings.
Adequate net operating income is necessary to pay for mandated capital expenditures including XRF testing, installation of natural gas detectors, and Local Law 97 prescriptive measures. The cost of these unfunded mandates on an average building (40 units) is between $25,000 and $60,000.
More than 170,000 rent-stabilized tenants are currently receiving subsidies to freeze their rent through Section 8, FHEPs, SCRIE or DRIE.
Click here to view our prepared testimony and slides.