Getting stiffed on the rent relief

 

6 Sq. Ft. 

New York on Tuesday received an additional $119 million in rent-relief funds from the U.S. Treasury Department, a fraction of the $1.6 billion requested by Gov. Kathy Hochul in January. Hochul’s office estimated 8,500 pending applications for rent relief will be fulfilled with this new funding, as Crain’s reported.

This is the second time the Treasury Department’s allocation of funds for NY’s rent relief has fallen short. In November 2021, the state was granted a mere $27 million, or just 3 percent, of the $996 million Hochul requested.

As of March 14, more than 318,000 New Yorkers have applied to receive back rent paid through the Emergency Rental Assistance Program (ERAP). But just 127,000 applicants have been paid, according to the state’s Office of Temporary and Disability Assistance.

“Every dollar is meaningful; however, this falls woefully short of meeting the financial struggles of the nation’s largest population of income-insecure renters,” Joseph Strasburg, president of the Rent Stabilization Association, said in a statement. “It is deeply disappointing and frustrating that the federal government is failing to come through with the $1.6 billion the state requested in January.”

According to Crain’s, the Treasury Department will soon be releasing information on how states can request additional funds for rent relief. The process is scheduled to begin on March 31. Until then, the state will be forced to take from its own resources to provide relief to New Yorkers in need.

When the state’s eviction moratorium, first instated by former Gov. Andrew Cuomo and extended by Hochul in her first week in office, ended in January, Hochul reopened the state’s rent-relief portal to give struggling New Yorkers an alternative support option following a court order. The state’s Emergency Rental Assistance Program (ERAP) exhausted its funding and as of now will no longer be able to fulfill applications filed after September 21, 2021, according to the program’s website.

 

Cluster apartments cannot be rented by homeless

From Crains:

As the city phases out a controversial program that placed homeless people in often subpar private housing, a crucial question found its way to state Supreme Court in Brooklyn: Once the de Blasio administration stops paying rent for an apartment, are its residents entitled to lease it themselves?

Wednesday a state judge said no.

The jurist found that participants in the cluster-site program were not tenants in the apartments they occupied and thus have no right to a rent-regulated lease.

Unless the decision is overturned by a higher court, the ruling is likely to discourage future lawsuits by homeless people and to bolster the position of landlords, who did not want to be forced into an agreement with tenants who might have trouble paying rent.

More affordable housing but less affordability

From Crains:

The city is building and preserving more affordable housing than ever, but federal programs remain the most effective tool for supporting the poorest households, according to a report released Thursday.

The Citizens Budget Commission analyzed a recent housing survey and found that around 44% of households pay more than 30% of their income in rent—after accounting for government subsidies such as the Supplemental Nutrition Assistance Program and Section 8 housing vouchers.

The 30% rule, the federal standard for being rent-burdened, is an imperfect measurement. High earners could spend a third of their income on rent and still have money left over for luxuries; but some low-income residents, who make up the lion's share of the rent-burdened, can be hard-pressed to pay for necessities if 30% of their earnings go toward rent.

As the report notes, many of the poorest residents spend an even higher percentage of income on housing. About 22% of city households, predominantly made up of low-income senior citizens and single parents, were found to be severely rent-burdened, meaning they devote more than half of every paycheck to rent.

City using strongarm tactics at Willets Point

From the Queens Chronicle:

Wais Mohibi doesn’t like to go down without a fight.

With his partner Jamie Sabeti, he owns A&B Repair Shop & Discount Muffler at 38th Avenue and 126th Street, the lone holdout in an otherwise barren section of Willets Point.

The Bloomberg administration made deals with other businesses in the area, so the properties could be cleared to make way for a since-killed plan to build a 1.4 million-square-foot mega-mall. Many of the businesses were given money and moved to the Bronx but ended up evicted from their new home.

Mohibi and his partner didn’t end up taking an offer.

“I fought with the city,” he told the Chronicle. “They wanted me out.”

Because the business stayed, its lease with the previous owner of their lot was still in effect and they had to start paying their rent to the city.

Mohibi said he doesn’t regret the decision to stay, and not take a relocation deal, but noted that it hasn’t been painless.

“We had a loss of business,” he said.

Not helping his company is its lack of accessible water — which is often a necessary part of auto work.

“[The city] cut off the water,” Mohibi explained. The issue is compounded by the fact that there is no meter the business can use to gauge its electricity usage, a problem he said was also created after the city took over the lease.

Because of the lack of services, Mohibi and Sabeti stopped paying rent to the city about a year ago, according to Ira Cooper, their attorney.

The de Blasio administration is suing them.

AirBnB has caused rental prices to skyrocket

From Bloomberg:

The cost of Airbnb to New York renters: $616 million.

That’s the conclusion of a new report by city Comptroller Scott Stringer that details the home-sharing website’s impact on housing affordability from 2009 to 2016. It’s no secret to New Yorkers that leasing costs skyrocketed during the time. But to isolate the Airbnb effect, Stringer’s office compared the growth in what rents would have been without listings on the site to what they actually were. Airbnb Inc. disputed the study’s findings, calling them “wrong on the facts” and containing “substantive issues with the methodology.”

Owners who list their apartments for short-term stays essentially are removing those units from the rental market, reducing the supply of housing and pushing up the cost of what remains, according to the report. For each 1 percent of all residential units in a neighborhood listed on Airbnb, rents in that neighborhood went up 1.58 percent, Stringer said. The estimated $616 million impact is for 2016 alone.

What a victory!

From Crains:

The de Blasio administration financed an all-time high 24,356 units of affordable housing last year, the mayor announced today.

That number included the construction of 7,177 apartments and the preservation of 17,359 that might have otherwise become market-rate dwellings. Half of the total will be available for residents making less than $33,400 a year, or $43,000 for a family of three, though it was unclear from the announcement what the lowest incomes served will be.

Can someone explain how only adding ~7K "affordable" apartments to the inventory is a victory? We need hundreds of thousands of affordable apartments and the city's response to this is to upzone areas that are currently "low density" and relatively affordable so that developers move in and build market rate housing. Throwing more money at landlords year after year so they keep rents stable also seems like a plan destined for future failure.

Scammers sought in phony apartment rental scheme

From PIX11:

Several New Yorkers hoping to move into new apartments were the victims of a scam, police said Monday.

The culprits met with the victims over the last few months and identified themselves as apartment owners, police said. They took deposits from victims and gave them keys for already-occupied apartments.

The scam started on April 1 when a man took a $1,400 deposit from a 40-year-old woman in Jackson Heights. Subsequent ‘deposits’ by other victims were for even more money. A 25-year-old woman gave a man $1,800 for an already-occupied apartment on April 21.

DeBlasio jacks rent for his own properties

From Politico:

Despite calling for rent freezes for the city's roughly 1 million rent-stabilized apartments, Mayor Bill de Blasio continued to raise rents on several properties he owns in Park Slope, new figures obtained by POLITICO show.

The mayor and his wife have increased the monthly rent on one of the units in a two-family house they own to $2,850 last year, from $2,400 in 2009. The increases came in $50 and $75 increments annually, according to a City Hall source who would speak only on background. They raised the other unit's rent by $25 to $1,825 in June of 2015.

They charge $4,500 for their primary residence, which they left in 2014 to move into Gracie Mansion. The two row houses, worth a combined $3.7 million according to city assessments, are on 11th Street in Park Slope.

The City Hall source would not explain why the mayor raised his own rents while pushing for a rent freeze from the city's Rent Guidelines Board, which has ruled for two years against increases on one-year leases for rent-stabilized apartments. Several years ago, a previous City Hall spokeswoman said the mayor charged his tenants more when he made home improvements.

The mayor's properties are not part of the state's rent-stabilization program, so he is not subject to the board's decisions and is free to charge whatever he wants.

Wealthy renters are choosing Queens

From LIC Post:

High-income renters are flooding into Queens, according to a recent study.

Wealthy residents of New York City have shown a preference for renting rather than owning homes over the last decade, a new report from RentCafe shows, with the number of affluent renters more than tripling in Queens over the last decade.

After Brooklyn, Queens has seen the second largest influx of wealthy renters over the last 10 years by percentage.

Queens saw a jump in high-income renters from 8,486 households to 29,473 households, or 247 percent, over the last decade, compared to the city as a whole, which saw an increase by 137 percent.

The report defined high-income renters as households earning more than $150,000 per year, and found that about a fifth of New York City renters qualified as high-income, or 211,482 households, which is more than all the affluent renters in San Francisco, Los Angeles, Chicago, Houston, San Jose, and San Diego combined.

The report points out that an influx in wealthy renters is a sign of gentrification, with about seven percent of Queens renters now making more than $150,000 per year.

Taxpayer-funded program will pay families to house their relatives

From the Daily News:

The city is offering to pay friends and family members of homeless shelter residents to take in their less fortunate loved ones for up to a year as part of a new program timed to the holidays.

The “Home for the Holidays” program launched this week, and is being offered to 5,000 families who have been living in shelters for at least 90 days.

The host family will get a taxpayer-funded $500 gift card for their hospitality, and extra money toward their rent.

Depending on the size of the family they take in, the host families will receive $1,200, $1,500 and $1,800 a month for up to a year.

The homeless family will also get a $500 gift card to help them settle in.

Department of Homeless Service Commissioner Steven Banks said that the program aligns with the administration’s belief that everyone has to pitch in to address the homelessness crisis, which has led to a record number of people living in the shelter system.

I suppose the timing of this announcement has nothing to do with this:

More U.S. families living with fewer bedrooms

From Curbed:

An analysis of home sizes in the country’s top 100 metro areas found that 26.4 percent of U.S. renters are in want of at least one extra bedroom. Using U.S. Census data, Trulia compared household size with the number of bedrooms in the home and found that across the U.S., homes are getting more and more crowded, with an increasing percentage of households having more family members than bedrooms. While the average size of the American home has ballooned over the years, renters are feeling more and more confined, especially in urban areas.

This "space crunch" is most evident in Los Angeles, where 29.2 percent of households have shared bedrooms—the highest proportion in the country. Roughly 67.9 of renters with children in L.A. were short on bedrooms. New York City is next, with 25.2 percent of households squeezed for space.

Astoria con artist still at it

From PIX11:

Recently, Phivos was arrested after allegedly ripping off a number of other renters from whom he took a combined $13,000 in fees for an apartment in a brand new building on Astoria Boulevard. Each of them was promised the apartment after they paid first and last month’s rent and a broker’s fee. However, none of them got the promised lease or their money back.

As a result, the Queens district attorney investigated Ioannou and he was arraigned on three counts of grand larceny in the third degree and three counts of scheme to defraud in the first degree. Bail was set at $15,000. Ioannou remains in jail awaiting trial. His next court date is March 8.

While that case moves along, another victim has recently come forward. Engeel Zeldon says she gave Phiovs Ioannou $7,200 in cash to rent an apartment on 40th Avenue in Astoria.

Zeldon, the single mother of two children, paid $2,400 each for first and last month’s rent and $2,400 for the broker’s fee. Phivos told her the landlord was out of town in Las Vegas and when he returned a few days later, he would sign the lease and give her the key. But after those few days passed, and Phivos stopped answering the phone, Zeldon went to the office of Astoria First Realty and found it was closed down.

The city marshal had evicted Ioannou for allegedly owing six months rent to the landlord.

How landlords cheat tenants

From WNYC:

69% of New Yorkers – over 5½ million people – live in rented housing. Landlords and developers capitalize on that enormous demand, and some break the law while doing so. Last November, ProPublica began an investigation into how some New York City developers and landlords illegally overcharge tenants and cheat taxpayers. ProPublica reporter Cezary Podkul discusses his ongoing series “The Rent Racket” which examines New York City’s ineffective rent stabilization system and investigates how tax breaks for developers and careless regulatory agencies affect the lives of tenants.

Another AirBnB disaster

From the Daily News:

A Midtown landlord is suing a tenant for $300,000 for repeatedly renting out her apartment on Airbnb for $200 a night.

In papers filed in Manhattan Supreme Court, 357 West 54th St. LLC says Madalina Iacob's bid to make some quick bucks on Airbnb and other short-term apartment rental sites has already cost the building over $60,000 in fines — and could wind up costing it four times as much.

"Under the law, the landlord is strictly liable even though it's the tenant causing the violation — and even though we're not participating in this with this lady," said the building's lawyer, Lawrence Silberman.

Iacob's lease on the small $2095-a-month one-bedroom says that "tenant understands that they may NOT sublet the apartment" — but that's what the yoga instructor and self-described life coach and emotional intelligence coach was caught doing by the city in May, court papers say.

As a result, the building was slammed with four violations by the city, including operating as an illegal hotel, not having the required amount of exits for a hotel and not having adequate fire alarm system for a hotel.

3 bedroom apartment turned into illegal AirBnB hotel

From PIX11:

Eddie Shiew owns a three-story home in Elmhurst, Queens, as a rental property. He recently rented the third floor, a three-bedroom apartment, to Burak Firik and Dogan Kimilli for $2,500 a month.

But after signing the lease, the landlord says he got a call from one of the tenants on the first floor telling him it appeared that construction was going on in the third floor.

Shiew says he went to the building and found that the third floor was in fact being renovated without his knowledge.

“I went in the next day and found they had turned a three-bedroom into a 10-bedroom apartment."

Shiew said it appeared that through the use of sheetrock, a construction crew had divided each bedroom into three small bedrooms.

He says he then discovered that Firik and Kimilli were listing the rooms for rent on airbnb.com, a website for people looking for a cheap place to stay for a short time, usually in someone’s home. And airbnb customers are who PIX11 found living in the apartment. PIX11 spoke with two tourists who were paying $35 dollars a night for a room on the third floor.

Here's how some landlords are fighting back against this.

She can't get them out

From PIX11:

Aida Byrne is in a bind. She and her husband moved out of a beautiful house in Jamaica Estates. They settled in Miami and were hoping to enjoy life in Florida. But her husband, Dr. Rodolfo Byrne, now is battling cancer. And the people to whom they rented their Queens home, Winston and Elaine Bailey, haven’t paid rent in almost two years. TWO YEARS!

Aida says the rent is 38-hundred dollars per month. And after two years she says she’s owed almost 100-thousand dollars in back rent and expenses. She’s been to court more times than she can count! She got a default judgment to evict the Bailey’s. But somehow the system fails her.

Here’s why. Every time Aida turns around, someone in the Bailey family seems to be declaring bankruptcy. And that can stop eviction proceedings even though Aida has a default judgment against the Bailey’s.

First it was the Bailey’s, themselves. Now it’s their daughter who isn’t on any lease. Aida can’t believe it.

Illegal gas hookup found at Astoria complex

From DNA Info:

Elected officials and residents rallied outside the Acropolis Gardens co-ops Monday, where tenants have been living without cooking gas and hot water for nearly two months — despite management's initial promise that the service would be restored by June 19.

Con Edison shut gas off at eight buildings at the development on April 29 because of "unauthorized, improper hookups," according to a spokesman. As of yet, only two of those buildings have had service restored.

The co-ops are managed by Metropolitan Pacific Properties, whose president Steve Osman previously told DNAinfo that Con Edison made an error in shutting off the gas after coming to inspect the properties following a small fire.

A Con Edison spokesman, however, said the service was cut because of "unauthorized, improper hook ups that violate building codes."

"Building management has been made fully aware of what they need to do. Gas was shut off for the safety of the residents," the rep said. "We'll continue working with the city to make restorations as proper repairs are made.”

An attorney for the buildings' co-op board, which contracts Metropolitan Pacific Properties, said Con Edison told them they need to replace the meters at the buildings, but that the utility company were out of the replacement meters.

Con Edison, however, disputes this claim, saying they have not run out of meters.

The attorney, Michael Maio, said the repair process has also been drawn out because workers have to check every individual apartment for gas leaks — none have been found, he said — which requires that tenants be home.

Banks everywhere but no small businesses

From City Journal:

Banks, drugstores, and other large chains are replacing small shops and restaurants, even financially successful ones. Small businesses can’t afford the rents that tenants like TD Bank and CVS can pay. With industry data showing that the average asking retail rent in Manhattan jumped 22 percent in the past decade (after inflation), landlords in prime spots are happy to kick healthy businesses out months or even years before finding a new tenant. It’s worth the wait, they figure. The same logic applies to new spaces, which often stand empty.

Banks have proliferated the fastest. FDIC data show that between 2000 and 2013, the number of bank branches in New York State grew from 3,416 to 4,415—and New York City, with nearly two-thirds of the state’s banks, was responsible for that 29 percent growth. Eighth Avenue between 50th and 59th Streets boasts branches of Bank of America, TD Bank, Chase, and Citibank, three of which opened in the last decade. The banks overwhelm their blocks and leave them with not much going on at night.

Every community needs banks, of course, but market demand isn’t driving this expansion. (When was the last time you stepped inside a bank?) Rather, seven years’ worth of zero-percent interest rates from Washington have kept banks doing well—as did the previous two decades of low interest rates, encouraging American consumers to keep borrowing. Other global chains have taken advantage of these friendly interest rates to rent up Manhattan space as well. There are also other factors at work in the retail rent spike, including the surge in global tourism. But for small businesses, the reality is plain: Manhattan is becoming unaffordable.

I don't know why banks are opening more brick and mortar branches when the trend these days is increasingly toward online banking. And in Queens, it seems that banks are closing more than opening lately.

Fear over rent hike in Kew Gardens Hills

From Crains:

Eight months after Manhattan-based Hudson Realty Capital sold the biggest residential portfolio in Queens in nearly two decades—a 65-year-old, 53-building Kew Gardens complex with 1,270 apartments—work to spruce up the property has begun. New lighting is being installed, front doors replaced and brickwork repointed, and two security guards have been hired to police the parcel, which sprawls over five city blocks.

Now residents await news of what will come next. Having paid $216 million for its asset and committed to undertaking well over $10 million in renovations, Manhattan-based A&E Realty will likely want to raise rents on the 1,270 one- and two-bedroom, mostly rent-regulated, apartments.

Although the new landlord declined to comment on its plans, residents note that rents in the three-and four-story redbrick and clapboard buildings—which stretch across a tree-studded landscape that runs from Kissena Boulevard to 150th Street and 72nd to 75th roads—have long been relatively inexpensive in keeping with the buildings' down-at-the-heels condition.

Based on the improvements, the landlord could increase rents several hundred dollars per unit, but tenants interviewed said they'd be willing to pay more for better maintenance. The landlord has not jacked up rents at other complexes after renovations it has made.

Report details major rent squeeze

From Curbed:

When adjusted for inflation, rents throughout New York City have risen a staggering 32 percent since 2002. Think that's bad? Well, it is (as seen here), but in certain neighborhoods, rents have soared twice as much, or even almost threefold. A report released by the nonprofit Community Service Society says that rents in Central Harlem have risen 90 percent in the last 12 years, from a median rent of $821 to 2014's $1,560. Central Harlem is the neighborhood that's most acutely felt the rise in rents since 2002, with Bed-Stuy following with a median rent increase of 63 percent from $921 to $1,500. Other neighborhoods that follow close behind are the lumped areas of Fort Greene/Dumbo/Brooklyn Heights with a 59 percent increase, and Washington Heights/Inwood with a 55 percent increase in median rent (h/t NYDN).