NYC landlords holding 60K rent-stabilized units for ‘ransom’

A large chunk of New York’s prime affordable housing stock is sitting empty and unavailable, according to a newly obtained state housing agency memo. 

Although the US Census Bureau’s 2021 NYC Housing and Vacancy Survey put the official number of unavailable and unoccupied rent-stabilized units in the boroughs at 42,860, The City acquired a document showing that number to be far higher: 61,000 units. 

The finding is important because it shows “warehousing” — when landlords purposefully keep apartments vacant — is happening at much higher rates than realized, and during a housing crisis, which those units could significantly alleviate. 

Based on the document, The City also found that the number of apartments registered as rent-stabilized dropped more between 2019 and 2020 than it has in the past 15 years. Following a major state rent law overhaul in 2019, more than 95,000 formerly rent-stabilized units have disappeared from the market. 

Tenant advocacy groups put the blame squarely on landlords, with nonprofit Service Society accusing them of holding stabilized units for “ransom” in an attempt to move political policy in their favor. 

“The housing crisis in NYC has never been more severe, and these landlords are openly holding an essential good off-market in the hopes of forcing policy more favorable to them,” the Bronx’s University Neighborhood Housing Program research director Jacob Udell told The City. “Affordable rental units with strong tenant protections are exactly the type of housing most in need right now, and withholding them has undoubtedly exacerbated the affordability crisis.”

Landlords say their hands are tied by rent laws, which make it impossible to renovate vacant units without losing money. 

“Many of the apartments that turned over during [COVID] had legal rents below $1,000 a month and the prior tenant was there for 50-plus years, so the apartment needs a ton of work,” Zachary Kerry, who has a portfolio of more than 1,000 Brooklyn units, told The Real Deal. “Because I can’t reinvest into that apartment and capture the cost of that investment, it’s just impossible to re-rent that unit.”