New York

Rents for 2 Million New Yorkers Set to Rise Again This Year

Published

2 years ago

June 21, 2023

Rents for 2 Million New Yorkers Set to Rise Again This Year

In 1974, Ahmad and Ann Shirazi moved into a rent-stabilized apartment on Manhattan’s Upper West Side, though at $275 a month, the rent felt high for two bedrooms.

The Shirazis hoped to have children and thought their stay would be temporary. Nearly 50 years later, they are still there, after raising two children in a space they made work because it was affordable.

The story of the Shirazis — Ahmad, 84, a retired film editor who worked on the movies “Scarface” and “The Bonfire of the Vanities,” and Ann, 78, who worked as an illustrator for department stores like Henri Bendel — reflects the experience of many the city’s roughly two million rent-stabilized tenants, almost a quarter of the city’s total population.

As New York City became one of the most expensive places in the nation, apartments with regulated rents and guaranteed lease renewals offered a reprieve to the working and middle class: The Shirazis now pay $1,025 a month, while a similar unit in their building, which is not stabilized, rents for more than $5,600.

On Wednesday, the city’s vast stock of rent-stabilized homes, which has come to be one of New York’s most important sources of lower-cost housing, is about to become a little more expensive. A New York City panel is set to let rents in the city’s one million rent-stabilized apartment rise for the second consecutive year, citing high inflation and ballooning costs for property owners.

Last month, the panel, known as the Rent Guidelines Board, backed increases on one-year leases of between 2 and 5 percent and increases on two-year leases of between 4 and 7 percent, in a preliminary vote.

It would be the second time during the tenure of Mayor Eric Adams — who appoints members to the panel and who has expressed sympathies for the difficulties facing landlords — that the Rent Guidelines Board would allow stabilized rents to increase. Last year, the panel voted to raise rents on one-year leases by 3.25 percent in rent-stabilized homes, and on two-year leases by 5 percent.

The Shirazis, who earn about $4,500 month in retirement benefits, will find a way to manage, they said. They and several other renters across the city — including higher earners, retired people who had lived in their apartments for decades and newcomers — said that incremental increases has helped them find stability in New York City’s otherwise chaotic and unforgiving housing market.

But many also said the moment also reflects something deeper: how people of modest means are finding it harder and harder to live in New York City.

As expensive as it is to live in New York, no other American city has a rent regulation system as vast: More than one million apartments — half the rental market and almost 30 percent of all of New York City’s homes — are covered by a system begun in 1969.

The majority of rent-stabilized homes are in buildings built before 1974. For many years, the number dropped, as landlords moved to leave the program and get more income from higher rents.

Since 2017, however, the overall number has grown, according to a tally of units registered with the city and state, particularly as many new units and rehabilitated units became rent stabilized in exchange for tax breaks or subsidies.

While many of the newer units rent at a higher rate, and there are no income restrictions associated with rent-stabilization, the system tends to benefit people of lower incomes. The median household income in rent-stabilized apartments was $47,000, compared with almost $63,000 in private, unregulated units, according to a 2021 city survey. The median rent in stabilized apartments was $1,400, compared with $1,825 in private, unregulated apartments, according to the survey.

The city’s “economic diversity is premised on rent stabilization,” said Samuel Stein, a housing policy analyst at the Community Service Society, a nonprofit group that advocates for lower-income New Yorkers.

But now, the future of the program is less clear.

In the wake of rent laws passed by left-leaning state politicians in 2019, property owners say they feel beleaguered and unable to make renting stabilized apartments financially viable. A group of New York City landlords has petitioned the U.S. Supreme Court to undo the regulations, a case that has drawn the interest of a variety of business groups, including the U.S. Chamber of Commerce, who are eager to see rent controls repealed or eased nationwide.

Michael Tobman, the director of membership and communication for the Rent Stabilization Association, an industry trade group, said the system forces private owners to provide a public benefit.

“All they have are escalating costs, and this piece, increases from the Rent Guidelines Board — that’s desperately needed,” he said.

The mayor has defended the panel’s approach as a way to protect mom-and-pop landlords, sometimes noting that he himself is a small landlord, even as he has called for the panel to steer away from the highest increases.

“We simply cannot put tenants in a position where they can’t afford to make rent,” he said last month.

But many landlords of rent-stabilized buildings are big companies. They include developers like Cammeby’s, Lefrak, L&M Development, who each have several thousands of rent-stabilized units in their portfolios, in addition to market-rate units. The companies either declined or could not be reached for comment.

John A. Crotty, founding member of the Workforce Housing Group, which has about 1,500 rent-stabilized homes in its portfolio, said increases were justified because during the tenure of the previous mayor, Bill de Blasio, the panel largely rejected major increases, placing landlords in a difficult position.

“When you fall below the real cost line, and then you have a period of hyper inflation, how is this any kind of good?” he said. “No matter how big of an increase Adams does, it won’t be enough.”

Peter Madden, the executive director of Westbeth Artists Housing, which has about 383 apartments in the West Village, the vast majority of which are rent stabilized, acknowledged the pressures facing property owners.

But he also said rent stabilization is the “largest, best affordable housing program the city has.”

At Westbeth, which also receives some subsidies from the city, rents on stabilized homes range from less than $1,000 to $2,300 for a three-bedroom.

“If not for rent stabilization, I don’t know how folks would do it,” Mr. Madden said.

For some tenants, rent stabilization is a lifeline, particularly as the city experiences one of the most brutal rental landscapes in recent memory during a rebound from the worst of the pandemic.

The 2021 survey found that one-third of New York City tenants spend more than half of their income on rent. For them, looming increases will force difficult choices about where else to cut back on spending.

“A rent increase this year for me would be like $80 more each month,” said Chen Ren Ping, 65, who shares a rent-stabilized apartment in Chinatown he has lived in since 2004. “If we didn’t have to pay those $80, we would eat better, our lives would be better, we would have an improved quality of life.”

Mr. Chen said he earns about $794 a month in social security payments. But he said his half of the rent for the two-bedroom apartment is $800, so he does repairs around the neighborhood to supplement his income.

Ann Shirazi said she was not happy about the coming increase for her own household. She also worries about the future of the city.

“It was a beautiful place to raise our kids,” she said. “And now because of the wealth, in my view, it has completely changed.”

New York

Large Blaze Ravages Bronx Apartment Building, Leaving Many Displaced

Published

5 hours ago

January 10, 2025

Press Room

Large Blaze Ravages Bronx Apartment Building, Leaving Many Displaced

Dozens of families were looking for shelter after a large fire broke out at an apartment building in the Bronx early Friday, injuring at least seven people, the Fire Department said. There were no fatalities or life-threatening injuries, according to officials.

About 250 firefighters and emergency medical responders rushed to a six-story residential building on Wallace Avenue near Arnow Avenue after a fire was reported there just before 2 a.m., the Fire Department said. The blaze on the top floor was elevated to a five-alarm fire about an hour later, it said.

Several dozen firefighters were still gathered outside the building at around 10 a.m. Many windows on the top floor were blown out and some had shards of glass hanging in place that resembled jagged teeth. Smoke continued to climb from the building as a firefighter on a ladder hosed the roof.

The fire was brought under control shortly before 2 p.m., according to fire officials.

The seven people who were injured included five firefighters, the department said in an email. One person was treated at the scene but declined to be taken to a hospital.

A spokeswoman for the Police Department said earlier that some people had suffered smoke inhalation injuries.

Robert S. Tucker, the fire commissioner, said during a news conference that it was a miracle that there had been no serious injuries or fatalities. Officials said that all of the apartments on the building’s top floor were destroyed.

Firefighters blasted water at the smoke and flames pouring out of the upper floors and roof, according to videos posted online by the Fire Department and television news outlets. Heavy winds had fueled the blaze, the department said.

The cause of the fire was under investigation, officials said.

The Red Cross was at the scene helping residents that were displaced by the fire, and a temporary shelter had been set up at the Bennington School on Adee Avenue nearby. Doreen Thomann-Howe, the chief executive of the American Red Cross Greater New York Region, said during the news conference that 66 families had already registered to receive assistance, including lodging. She said she expected that number to increase.

Juan Cabrera and his family were among those seeking help at the Bennington School. Mr. Cabrera said that he and his family had not heard a fire alarm but had instead heard glass breaking as residents climbed out of windows. He said he had also heard people race across the hall one flight above him while others screamed “Get out!”

Mr. Cabrera, 47, said he had smelled smoke and woke up his daughter, Rose, 13. He and his wife, Aurora Tavera, grabbed their IDs, passports and cellphones, and the family left the building.

“I felt desperate,” Ms. Taverna, 32, said.

“Thank God we are still alive,” said Mr. Cabrera, who works as a school aide and custodian and has lived in the building for five years. “The material stuff you can get back, but we have our family,” he said.

Louis Montalvo, 55, was also among those seeking help. He said firefighters banged on his door at around 3 a.m. and that he had smelled smoke.

“I am grateful to be around,” Mr. Montalvo said, as he stood outside of the temporary shelter. He was still wearing his felt pajama pants, which had snowmen printed on them.

Vanessa L. Gibson, the Bronx borough president, said she was “so grateful” there had been no fatalities from the fire.

The last major apartment fire in the Bronx occurred in 2022, and resulted in 17 deaths, which experts said were entirely preventable. Self-closing doors in the building did not work properly, allowing smoke to escape the apartment where the fire started and rapidly fill the structure’s 19 stories.

New York

New York’s Chinese Dissidents Thought He Was an Ally. He Was a Spy.

Published

13 hours ago

January 10, 2025

Press Room

New York’s Chinese Dissidents Thought He Was an Ally. He Was a Spy.

The Chinese government’s paranoia about overseas dissidents can seem strange, considering the enormous differences in power between exiled protesters who organize marches in America and their mighty homeland, a geopolitical and economic superpower whose citizens they have almost no ability to mobilize. But to those familiar with the Chinese Communist Party, the government’s obsession with dissidents, no matter where in the world they are, is unsurprising. “Regardless of how the overseas dissident community is dismissed outside of China, its very existence represents a symbol of hope for many within China,” Wang Dan, a leader of the Tiananmen Square protests who spent years in prison before being exiled to the United States in 1998, told me. “For the Chinese Communist Party, the hope for change among the people is itself a threat. Therefore, they spare no effort in suppressing and discrediting the overseas dissident community — to extinguish this hope in the hearts of people at home.”

To understand the party’s fears about the risks posed by dissidents abroad, it helps to know the history of revolutions in China. “Historically, the groups that have overthrown the incumbent government or regime in China have often spent a lot of time overseas and organized there,” says Jessica Chen Weiss, a professor of China studies at Johns Hopkins University. The leader Sun Yat-sen, who played an important role in the 1911 revolution that dethroned the Qing dynasty and led eventually to the establishment of the People’s Republic of China, spent several periods of his life abroad, during which he engaged in effective fund-raising and political coordination. The Communist Party’s own rise to power in 1949 was partly advanced by contributions from leaders who were living overseas. “They are very sensitive to that potential,” Weiss says.

“What the Chinese government and the circle of elites that are running China right now fear the most is not the United States, with all of its military power, but elements of unrest within their own society that could potentially topple the Chinese Communist Party,” says Adam Kozy, a cybersecurity consultant who worked on Chinese cyberespionage cases when he was at the F.B.I. Specifically, Chinese authorities worry about a list of threats — collectively referred to as the “five poisons” — that pose a risk to the stability of Communist rule: the Uyghurs, the Tibetans, followers of the Falun Gong movement, supporters of Taiwanese independence and those who advocate for democracy in China. As a result, the Chinese government invests great effort in combating these threats, which involves collecting intelligence about overseas dissident groups and dampening their influence both within China and on the international stage.

Controlling dissidents, regardless of where they are, is essential to China’s goal of projecting power to its own citizens and to the world, according to Charles Kable, who served as an assistant director in the F.B.I.’s national security branch before retiring from the bureau at the end of 2022. “If you have a dissident out there who is looking back at China and pointing out problems that make the entire Chinese political apparatus look bad, it will not stand,” Kable says.

The leadership’s worries about such individuals were evident to the F.B.I. right before the 2008 Beijing Olympics, Kable told me, describing how the Chinese worked to ensure that the running of the Olympic flame through San Francisco would not be disrupted by protesters. “And so, you had the M.S.S. and its collaborators deployed in San Francisco just to make sure that the five poisons didn’t get in there and disrupt the optic of what was to be the best Olympics in history,” Kable says. During the run, whose route was changed at the last minute to avoid protesters, Chinese authorities “had their proxies in the community line the streets and also stand back from the streets, looking around to see who might be looking to cause trouble.”

New York

Hochul Seeks to Limit Private-Equity Ownership of Homes in New York

Published

22 hours ago

January 9, 2025

Press Room

Hochul Seeks to Limit Private-Equity Ownership of Homes in New York

Gov. Kathy Hochul of New York on Thursday proposed several measures that would restrict hedge funds and private-equity firms from buying up large numbers of single-family homes, the latest in a string of populist proposals she intends to include in her State of the State address next week.

The governor wants to prevent institutional investors from bidding on properties in the first 75 days that they are on the market. Her plan would also remove certain tax benefits, such as interest deductions, when the homes are purchased.

The proposals reflect a nationwide effort by mostly Democratic lawmakers to discourage large firms from crowding out individuals or families from the housing market by paying far above market rate and in cash, and then leasing the homes or turning them into short-term rentals.

Activists and some politicians have argued that this trend has played a role in soaring prices and low vacancy rates — though low housing production is widely viewed as the main driver of those problems.

If Ms. Hochul was inviting a fight with the real estate interests who have backed her in the past, she did not seem concerned. She even borrowed a line from Jimmy McMillan, who ran long-shot candidacies for governor and mayor as the founder of the Rent Is Too Damn High Party.

“The cost of living is just too damn high — especially when it comes to the sky-high rents and mortgages New Yorkers pay every month,” Ms. Hochul said in a written statement.

James Whelan, president of the Real Estate Board of New York, said his team would review the proposal, but characterized it as “another example of policy that will stifle investment in housing in New York.”

The plan — the specifics of which will be negotiated with the Legislature — is one of several recent proposals the governor has made with the goal of addressing the state’s affordability crisis. Voters have expressed frustration about the high costs of housing and basic goods in the state. This discontent has led to political challenges for Ms. Hochul, who is likely to face rivals in the 2026 Democratic primary and in the general election.

In 2022, five of the largest investors in the United States owned 2 percent of the country’s single-family rental homes, most of them in Sun Belt and Southern states, according to a recent report from the federal Government Accountability Office. The report stated that it was “unclear how these investors affected homeownership opportunities or tenants because many related factors affect homeownership — e.g., market conditions, demographic factors and lending conditions.”

Researchers at Harvard University found that “a growing share of rental properties are owned by business entities and medium- and large-scale rental operators.”

State officials were not able to offer a complete picture of how widespread the practice was in New York. They said local officials in several upstate cities had told them about investors buying up dozens of homes at a time and turning them into rentals.

The New York Times reported in 2023 that investment firms were buying smaller buildings in places like Brooklyn and Queens from families and smaller landlords.

Ms. Hochul’s concern is that these purchases make it harder for first-time home buyers to gain a foothold in the market and can lead to more rental price gouging.

“Shadowy private-equity giants are buying up the housing supply in communities across New York, leaving everyday homeowners with nowhere to turn,” she said in a statement on Thursday. “I’m proposing new laws and policy changes to put the American dream of owning a home within reach for more New Yorkers than ever before.”

Cracking down on corporate landlords became a prominent talking point in last year’s presidential election. On the campaign trail, Vice President Kamala Harris called on Congress to pass previously introduced legislation eliminating tax benefits for large investors that purchase large numbers of homes.

“It can make it impossible then for regular people to be able to buy or even rent a home,” Ms. Harris said last summer.

In August, Representative Pat Ryan, Democrat of New York, called on the Federal Trade Commission to investigate price gouging by private-equity firms in the housing market. He cited a study that estimated that private-equity firms “are expected to control 40 percent of the U.S. single-family rental market by 2030.”

Statehouses across the country have recently looked at ways to tackle corporate homeownership. One effort in Nevada, which passed the Legislature but was vetoed by Gov. Joe Lombardo, proposed capping the number of units a corporation could buy in a calendar year. It was opposed by local chambers of commerce and the state’s homebuilders association.

A bill was introduced in the Minnesota State Legislature that would ban the conversion of homes owned by corporations into rentals. It has yet to come up for a vote.

At the federal level, Senator Jeff Merkley, Democrat of Oregon, and Representative Adam Smith, Democrat of Washington, introduced joint legislation that would force hedge funds to sell all the single-family homes they own over 10 years.