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Thousands of Subsidized Units Will Return to Affordable Housing Under Legislation that Passed the City Council

Registration required for thousands of previously unaccounted for 
affordable homes with fines for bad landlords
 
Upgrading Housing Connect to include existing affordable housing with 
notification for eligible units so residents can apply all in one place

 
New York, NY – Landlords failing to provide required affordable housing in exchange for city financing, tax breaks or additional density will have to register their units and offer new and existing units to residents for rental in one location or face escalating fines under legislation that passed the New York City Council yesterday. Introduction 1015-A, authored by Council Member Ben Kallos and sponsored by Manhattan Borough President Brewer, and Housing and Buildings Chair Williams was introduced in response to a ProPublica report estimating that New York City has paid developers $100 million for 50,000 affordable units that might not be offered for affordable rates.
 
“New York City is in desperate need of affordable housing. It is a crisis, and we cannot allow landlords to hide even a single unit of it from the public,” said Council Member Ben Kallos. “We need a full accounting of every affordable unit of housing in the City, and we need regular monitoring and strict enforcement. If New Yorkers are going to pay billions of taxpayer dollars to developers in exchange for building affordable units, we need to ensure residents in need can actually get that affordable housing.”
 
New York City and State for decades have failed to hold landlords and developers accountable for agreements like 421-a, J-51, and Article XI. In 1993 New York State eliminated penalties for failing to register, allowing thousands of building owners to ignore the law for years and charge rents above the legal limit. These programs provide direct financing, decades-long tax abatements, or additional density to landlords and developers in exchange for building and maintaining affordable housing units whose tenants have income that meet a certain percentage of the Area Mean Income. Together these programs cost the city roughly $1.2 billion per year in tax revenue, but much of the affordable housing is getting lost. ProPublica found that owners of 15,000 buildings — receiving over $100 million from the city — failed to register any affordable units, leaving New Yorkers roughly 50,000 units short of what they paid for. After hearing this legislation, Mayor de Blasio identified 37,141 apartments that were avoiding $304 million in property taxes while failing to comply with the 421-a affordable housing program.
 
The legislation seeks to solve the following problems that have long plagued New York City’s decentralized network of affordable housing:

  • Non-Registration – owners fail to register thousands of buildings with tens of thousands of units for which they receive hundreds of millions in tax breaks each year.
  • Paper Applications – applicants must mail an application request, receive the application by mail, return the application by mail, and wait hoping nothing got lost in the mail.
  • Lotteries and Rejections – three quarters of applications have been rejected in lotteries because individuals apply for the wrong affordable housing for their income.
  • Waiting List Corruption – investigations revealed dozens of instances of corruption and bribery surrounding waiting lists for affordable housing.
  • Numerous Individual Places to Apply – Multiple websites offered by DHCR, HPD,  HDC  and non-profits like Met Council as well as at individual affordable housing buildings.

The legislation mandates the following solutions:
 
Finding Affordable Housing

  • Online Application for All City Subsidized Affordable Housing in One Place – owners will list all affordable housing receiving any city subsidies on a central city website where New Yorkers can apply for new and existing affordable housing. Residents would be able to find the address, apartment size and number of bedrooms, maximum rent, amenities with monthly fees, pet policy, elevators and ADA accessibility, and how to apply for the unit.
  • Matching Residents to the Correct Affordable Units by Income – residents will complete a profile which will be used to match, notify and pre-fill an application only to units for which they actually qualify. Individuals earning less than $53,450 a year and families earning 80% of the AMI will be linked to apply for NYCHA public housing.
  • Waiting List Transparency and Application Tracking – applicants will be able to track the progress of their applications and their position on waiting lists.

 
Ensuring Subsidized Housing is Offered at Affordable Rates

  • Owner Registration – starting in 2020 owners of affordable housing receiving direct financing, tax abatements or additional density from the City will receive outreach and be required to annually register each unit online with the city.
  • Enforcement and Fines – individuals can file complaints with HPD required to investigate and issue early warnings that would lead to fines escalating overtime from $100 per month per unit to $2,000 per month per unit if unresolved. In 1993 New York State eliminated penalties for failing to register, allowing thousands of building owners to ignore the law for years and charge rents above the legal limit, now they are back for city subsidized affordable housing.

 
Tenant Protections

  • Protection from Illegal Rents – tenants could verify whether the rent they were charged was legal with HPD.
  • Public Information – a list of all affordable housing by street, apartment size, manager, and the affordable housing subsidy would be available for the public to hold landlords and the city accountable.
  • Manager and Superintendent Information – already being filed by owners under the housing maintenance code and hard to find this information would be available online.
  • Privacy – privacy protections would be provided for victims of domestic violence with units receiving tenant based financial assistance such as SCRIE, DRIE, or HASA excluded.

 
Time Line

  • January 1, 2018 –All affordable housing receiving new or renewed subsidies from the city through financing, tax abatement, or additional density through Mayor de Blasio’s Affordable Housing Plan would be covered.
  • July 1, 2020 – Launch of upgrade Housing Connect or a new system to satisfy this legislation.
  • July 1, 2021 – HPD will provide recommendations for including all existing affordable housing. Prior to this date, existing affordable housing that is receiving city financing, tax abatements or additional density will be able to offer vacant units voluntarily.

The legislation’s requirements for registration, offering, disclosure and enforcement apply to affordable housing units that are restricted to tenants based on income and does not apply to units that are not restricted by income or are otherwise market rate.
 
“This legislation is an important step in the right direction - improving the lives of those in need of housing and protecting the financial interests of New York City taxpayers.
Let's continue to work together to see that these noble civic goals are met in the future through this and other forms of legislation and regulation at our disposal,” said Stephen Werner an HPD Analyst and hero whistle blower who built a rent stabilized building look up tool to call attention to the problem.
 
“I am very pleased that Council Member Kallos and an OSA member were able to work together to improve affordable housing in New York City. Although we have a lot more work to do, this  bill is a great step in the right direction and will bring accountability to landlords and developers who cheat the system,” said Robert J. Croghan, Chair of the Organization of Staff Analysts (OSA), which represents Stephen Werner and protected his whistle blower rights.
 
“Combatting the affordable housing and homelessness crisis in this city is a complex and daunting task, and it is essential that there is adequate oversight over the process of creating and preserving affordable units. Landlords cannot be permitted to make promises of affordable housing, collect taxpayer money, and then shirk their responsibility to uphold that promise of delivering affordable units. This bill helps to create the transparency that is badly needed in this process, by listing all registered units online and keeping landlords accountable,” said Housing and Buildings Chair Jumaane D. Williams. “I thank Council Member Kallos for his work on this issue, and for this legislation that helps ensure that our city’s investment in affordable housing is put to meaningful, beneficial use, with lasting impact for New Yorkers in need.”
 
“Requiring affordable housing to be registered and accessible through a single user-friendly portal is a good idea that’s long overdue,” said Manhattan Borough President Gale A. Brewer, who sponsored the legislation in partnership with Councilmember Kallos. “In 2017, there’s no reason this information should be scattered among a hodgepodge of websites and PDF flyers, or for affordable units to go unregistered and unpublicized because of a lack of accountability.”
 
“This bill is a huge step forward in creating transparency about affordable housing in NYC.  This will provide an additional check to ensure owners are registering their affordable housing and give tenants the information they need to make well informed decisions their housing needs,” Harvey Epstein, Director Community Development Project, Urban Justice Center. “I want to applaud the efforts of Councilmembers Kallos, Williams and Mendez as well as Borough President Brewer for introducing this and we look forward to quick hearing and passage of this important legislation.”
 
“New York's tenants are experiencing a severe affordable housing crisis, and I applaud Councilmember Ben Kallos, Borough President Gale Brewer, Councilmember Jumaae Williams, and Councilmember Rosie Mendez for increasing transparency and the preservation of affordable housing, and making it easier for tenants to know their rights and secure their housing protections,” said Katie Goldstein, Executive Director of Tenants & Neighbors.
 
“We applaud the leadership of Councilmember Kallos on addressing this important issue in New York City; Introduction 1015-A will ensure that units within buildings that receive a city benefits continue to be accessible to New Yorkers seeking affordable housing in their communities. This legislation will bring back to the affordable housing market, thousands of units throughout the City of New York,” said Rolando Guzman, Deputy Director for Community Preservation at the St. Nicks Alliance.