stand for tenant safety

3 Anti-Market Victories for NYC Affordable Housing in 2017

Tenants and advocates had real success this year (ANHD)

Tenants and advocates had real success this year (ANHD)

For affordable housing advocates in New York City, 2017 was a sum-of-all-fears kind of year. The affordable housing crisis continues to touch all corners of the city (and America) leading to a shocking increase in homelessness, foreclosures, and rent burdens. The election of Donald Trump and the placement of Dr. Ben Carson at HUD have expedited the federal retreat from housing aid and removed the possibility of national solutions for affordable housing (and for helping NYCHA.) Finally, the squabbling of Mayor de Blasio and Governor Cuomo has nearly paralyzed efforts for reform and relief at the state level.

But it hasn’t been all doom and gloom. Largely through the tireless efforts of local tenants and advocates, the cause has seen several key victories at the city-level. 

Further more, these three victories show that even modest tweaks to the existing political and legal framework can lay the foundation for the type of profound change that we need to address the crisis at a structural level. Namely, we need to reject the market ideology that has caused the crisis and continues to exploit it.

1. Community Land Trusts have arrived as a powerful affordability tool

Any reader of this blog knows how important homeBody thinks community land trusts are to ensuring permanent affordable housing in the city. CLTs separate the value of the land from the value of the structure on it by placing the property in a trust, permanently removing it from speculation. After many years of organizing by NYCCLI and New Economy Project, it finally seems that NYC gets it too.

In July, the Department of Housing and Preservation announced a request for information on CLTs for the first time and has partnered with Enterprise Community Partners NYC to offer $1.65 million for the formation of three new CLTs in the city: Interboro CLT, El Barrio, and a brand new coalition CLT through NYCCLI.

Just last week, the City Council passed a law recognizing CLTs in the city’s administrative code, which opens them up to working with city agencies on a more formal basis.

These are modest steps, but incredibly important ones in helping the model take off in the city. The fact that it has taken almost a decade for these measures to happen, shows what a slog it has been. But it also shows how quickly things are starting to happen.

Building off of Cooper Union (the first and longest tenured CLT in the city), the newest CLTs have a long way to go to grow, but the necessary roadmap, administrative tools, and advocacy groups now in place will help to do so.

The hope now is that other community organizations will become aware of the model and have the tools to go forward with their own CLT. I also hope that the city beings to think seriously about turning over city-owned land to CLTs or even forming a municipal land trust as quasi-public housing.

Either way, introducing a model that removes speculation on land values in the city is a major win for affordable housing and sustainable communities.

2. Right-to-Counsel will prevent evictions and reshape housing court

In August, the city radically reshaped its housing court structure by becoming the first city in the US to guarantee legal representation for low-income tenants in eviction fights. For a relatively modest $155 million over 5 years in legal aid, tenants that were previously outgunned in housing court now have a greater chance of avoiding eviction altogether. As of 2015, 90% of landlords had legal representation, while only 10% of tenants did. This rebalancing will have a profound impact on the cost to families facing homelessness.

With the homeless population now exceeding 60,000 people in NYC, keeping families in their current homes also becomes the most important homeless policy tool for the city. Right-to-counsel will reduce the cost of providing homeless services by an estimated $320 million and will hopefully alleviate some of the political pressure associated with homeless shelters and clustering that is crippling the city’s ability to meet the sadly growing homeless population. Keeping families in homes is the key.

The larger hope with this move is to alleviate the equally crippling pressure on the housing court division. There were over 350,00 filings last year for only 50 judges. This backlog locks thousands of landlords and tenants in slow proceedings that ultimately undermine the ability for the city to ensure transparency and accountability. The rule of law is only as good as a government’s ability to enforce it and creating more balance on the tenant side will hopefully recalibrate this dynamic for the better.

3. No Harassment Certification is a small step towards decommodifying housing

The other big development on enforcement occurred at the end of November, when the City Council passed the Certificate of No Harassment (CONH) legislation, largely through the efforts of ANHD. This law, along with the larger Stand for Tenant Safety package also passed this year, aims to stop the common and pernicious practice of landlords harassing rent-regulated tenants out of their units in order to increase profits.

With the skyrocketing value of property across every borough, there is large incentive for speculators to buy a building and force out rent-regulated tenants. The goal in many cases is to either demolish a building or increase the rent-roll in order to flip it. This practice has been difficult for tenants and the city to prevent.

The CONH is intended to disincentivize this speculation by putting the pressure on landlords to prove that they are not harassing tenants. Buildings that fall into certain categories of risk (related to speculation) must receive this certificate if they are to begin construction projects or otherwise impact the quality of life of existing tenants.

It is ultimately still just a speed bump rather than a roadblock against speculation, but it shows that tenants and advocates fighting back against more powerful financial interests can win. Removing the worst actors from the housing market by raising the risk and cost of harassment is a necessary first step in radically reforming the property landscape in NYC.

 

I don’t want to suggest that these three events were the only “victories.” There are other events this year that I could have spoken about, such as Mayor de Blasio’s Housing 2.0 plan for his second term, or Governor Cuomo’s new housing budget.

However, I chose them because these three items speak to the larger hope that we can reduce the suppressive power that “the market” has over our housing discussions. Market solutions have their place in any affordable housing policy discussion but only after we reposition the basic premise of housing as a basic right.

Speculation destroys cities by devouring neighborhoods and dehumanizing housing. It really is that simple. Treating housing as an asset-first policy has led us to the affordable housing crisis and has scarred many communities in NYC, perhaps permanently.

If enough people force the discussion on housing to return it to shelter-first, we absolutely can find practical and lasting solutions to the affordable housing crisis. As many tenants and advocates have shown this year, it is also absolutely possible.

NYC Passes New Tenant Protections, But Needs More From State

The city is, but will the state? (urbanjusticeleague)

The city is, but will the state? (urbanjusticeleague)

On Wednesday last week, the New York City Council passed a series of bills aimed at protecting tenants from harassment caused directly or indirectly by landlord’s construction projects.  In all, 18 bills were passed and are expected to be signed by Mayor de Blasio.  The “Stand For Tenant Safety” package comes in light of other recent efforts by the city to help tenants such as right-to-counsel and shows a remarkable shift in housing policy as a response to the ongoing affordable housing crisis.  However, without a larger comprehensive redesign of rent regulation laws, these efforts only raise the potential cost of abuse rather than remove the underlying motivations for landlords and developers. 

When a rent-regulated tenant moves out, the landlord can raise rent a lot more than they can if the tenant stays.  That basic logic creates a perverse incentive for some landlords to try to push the tenant out.  Such tactics have included cutting off power, heat, or gas; not properly protecting tenants from in-building construction work; physically damaging a tenant’s unit during construction, or doing work or inspections at odd hours of the night or early morning.  The intended purpose of these practices is to make life so unbearable for a tenant that they voluntarily move.

In other cases, landlords begin construction projects under the guise of upgrades only to intentionally create damage that forces certain tenants (or potentially every tenant) to move.  There have been several high-profile criminal cases recently involving landlords who have used these tactics and the stories are difficult to comprehend.

It’s safe to say most landlords and developers do not resort to unethical, even criminal, behavior, but it is impossible to know how widespread even milder versions of these practices are across the city. Up until now, the city hasn’t had clear guidelines to identify such practices.

Stand for Tenant Safety is designed to find out just how often they occur and to raise the cost of these behaviors.  The bills have three main focuses: first, one creates an Office of Tenant Advocates within the Department of Buildings to make it easier for tenants to log complaints about construction work. Second, it increases penalties for construction jobs without proper permits and proper tenant messaging to cut down on scopecreep. Third, it classifies visits or calls from landlords at odd hours as harassment.  

The bills will make documenting potential abuses much easier for tenants and city officials and will serve as a bulwark against landlords attempting to harass tenants through sabotaging a building’s quality of life.  These are much needed protections for all tenants, whether they are regulated or market rate.

However, the basic logic that I spoke of earlier remains the core problem in the rental market.  Specifically for rent-regulated units, the lure of vacancy decontrol – the ability for a landlord to significantly raise rent after a tenant moves out or when the rent hits $2500 – remains too tempting a target for landlords.  (It’s easier for landlords to raise rents on market units obviously, but the speed of appreciation in certain fast-growing neighborhoods raises the specter of such tactics even for market-rate tenants.) 

The current mechanics of the market and the regulatory regime within it guarantee that capital will find ways to force out tenants in order to raise rents. And it will continue to attract the speculator landlord/developer over the service provider landlord/developer.

There is an entire cottage industry within the real estate world that specializes in identifying and buying buildings with rent-regulated tenants with the explicit purpose of forcing them out, or to “de-tenant” then flip the building.  The industry of course uses euphemisms like “under-performing assets” or “under-utilized inventory” to describe the buildings and uses others like “revitalize” or “reoptimize” to describe the process of kicking out tenants, but the message to investors is clear and universal: Buy low, sell high.

Without removing the incentive provided by vacancy decontrol (and other loopholes around rent regulations) all the tenant protections in the world won’t prevent certain landlords from looking for ways out.  Only the New York State legislature can change the rent laws to address this fundamental issue. There are many political reasons why that is unlikely to happen anytime soon.

I always think of rent regulation in terms of Abraham Lincoln’s famous “A House Divided” speech on slavery.  NYC can’t function in the long run half regulated, half market.  There is little logic or basic fairness to the system now – for landlords and tenants alike.  It needs to be either one or the other. 

I’ve strongly advocated for universal rent regulation for rental apartments in order to avoid the more fundamental problems that our current mixed market encourages.  Only with an entirely new rent regulatory system, one that doesn’t look like the system we currently have to be clear, can we really avoid the type of speculative displacement that is eroding the long-term health and diversity of the city. It's also the only way to remove the more speculative, short-term actor from entering the landlord business in the first place.

In the basic Econ 101 model, rent regulated units are akin to any distressed asset like a failing business.  If an asset is not performing to its “highest, best use” you change some variables and try to make it more productive.  This type of business will always attract a certain type of speculative buyer.  That’s fine if you’re talking about a restaurant or even a publicly-traded company. It’s not so simple if you’re talking about a home.

A home is more than an asset.  How you measure the utility of living in a home – especially one that the resident rents – is difficult to measure in our classical economic models.  That doesn’t mean it’s impossible to measure, it just means that it involves assigning value to certain activities or behaviors that most economists have shied away from historically.

As a result, we have plenty of economic research about the “costs” and “damage” of rent regulations (although all data collection is subjective to a degree) based on classic models, but don’t have much research that measures the broader “health” of a city with rent regulations.  These models aren’t interested in the empirical state of a city as much as the theoretical state.

The discussion about rent regulations comes down to one of values.  On the one hand, creating more economic activity and growth is a good thing for the city.  On the other, how much activity and where it occurs can be a bad thing for the city if it isn't spread out. 

Mayor Bloomberg famously thought having every billionaire in the world living in NYC would be great for the city.  We currently do have the most amount of billionaires, but it’s hard to argue that the city greatly benefits either through their economic contributions, tax contributions, or social contributions. 

For a democratic society to truly be healthy, you need a variety of incomes (and their resulting economic and social contributions) to be stakeholders at the city and neighborhood level. If housing is treated as a commodity, that system breaks down over time, as it has been in NYC. Our failing rent regulatory regime is just a symptom of this larger illness. Until we address this problem on a larger, fundamental level, we’ll never escape the cycle of landlord’s looking to get around rent regulations. No city-level laws will ever be able to keep up.