the rent is too damn high

Are the Landlords Bluffing?

And why is it so hard to tell?

Video: @chipnyc, @nyvacant

This article was featured in One Great Story, New York’s reading recommendation newsletter. Sign up here to get it nightly.

There’s a one-bedroom in Jackson Heights that looks like it’s absolutely falling apart. On TikTok, you can see the bathroom sink sitting uselessly in the tub, wires hanging crooked from the walls, and debris littering the floors. A place in Greenwich Village has torn-up boards and what appears to be the remains of a stand-up shower in the kitchen. In Harlem, closet doors lean off their hinges in a darkened one-bedroom. These sad little apartments are the victims of rent stabilization, according to the Community Housing Improvement Program (CHIP), which represents rent-stabilized landlords across New York City and the force behind the TikTok campaign. Too costly to renovate and too cheap to rent — a one-bedroom in Chinatown for $570? — owners say they have no choice but to leave them empty. No use to anyone.

CHIP says there are at least 20,000 apartments like these all across the city — dramatically below market rate, basically disaster scenes — all “forced vacant” because they can’t reset rents after doing necessary repairs. (A problem they have asked the Supreme Court to solve for them.) But the city, specifically the Department of Housing Preservation and Development (HPD), says that number is closer to 2,500. This is kind of how it goes. There is dizzyingly little consensus on the matter of our rent-stabilized housing stock — nearly a million apartments, and 28 percent of our housing — and even the basics have been contentious: the condition of these apartments, the money required to make them habitable (even nice), or how many of them are actually empty in the first place. Try to figure it out and you’re sent down a rabbit hole that leads to only more questions. So are these landlords bluffing? And why is it so hard to tell?

To understand this particular dispute over vacant apartments, you have to go back to the spring of last year. Market rents were climbing, setting depressing new records month after month, and the city’s eviction moratorium was winding down for good. It was in this context that, in April, landlords tried to make a deal with Albany: In exchange for a one-time rent reset, they would put what they said were 20,000 apartments back on the market. To drive the point home, CHIP launched its horror-show reel of empty units. A month later, HPD released its initial findings from the 2021 Housing Vacancy Survey, a comprehensive Census-based report, which estimated that there were actually 42,860 vacant rent-stabilized units that were off the market. Come fall, the City reported an even larger figure: According to the state’s Department of Housing and Community Renewal registration data, which comes from landlords self reporting, there were 61,000 vacant rent-stabilized apartments in 2021 — a pandemic spike. A day later, the number grew again as the City reported new vacancy numbers from HPD’s 2021 survey data — showing that there were 90,000 vacant rent-stabilized apartments across the five boroughs if you also included the apartments that were vacant but available to rent.

Unsurprisingly, this numbers battle attracted quite a bit of attention. A housing crisis raged, and here were ostensibly thousands — and thousands and thousands — of empty, affordable apartments going to waste. City Council members and tenant organizers accused landlords of warehousing — intentionally keeping their apartments vacant — as a kind of ransom in order to kill rent stabilization. And landlords more or less agreed — they were, in fact, warehousing apartments, albeit out of what they said was financial desperation. Rent stabilization had made it “prohibitive for owners to invest significant amounts of money in units when they become available,” Jay Martin, the executive director of CHIP, tells me. What else were they supposed to do?

A delayed attempt by HPD to hit the brakes failed. This summer, they came out with a new new number: 2,500. Their data had been “misconstrued,” they told the City Council at a June hearing on vacancies. The units in their survey could be vacant for a number of different reasons — some were actively undergoing renovation, others were only vacant for a short amount of time before they were rented out again. Not every one of these places was being warehoused. Plus, landlords were claiming that unbelievably cheap, long-vacant apartments were the norm, but according to their data, units with a legal rent below $1,000 that had been vacant for over one year, were in need of repairs, and were unavailable for rent accounted for just 2,477 of all units. A fraction of a fraction. All the talk about tens of thousands of vacant apartments was becoming a “distraction,” HPD’s assistant commissioner for housing policy, Lucy Joffe, said at the hearing. In order to quiet the panic, it looked like HPD was trying to call landlords’ bluff about how bad things had become under rent stabilization. (But the language of “distraction” also hit a nerve with City Council members, who argued that HPD was downplaying an issue that was hugely important to tenants.)

But those early numbers — 90,000, 60,000, 20,000 — have been hard to put back in the bag. In part because the Housing Vacancy Survey doesn’t collect data on the extent of repairs an apartment actually needs, a more complicated question that HPD says falls out of the purview of a survey taker. (The state’s registration data also doesn’t collect information on the condition of apartments.) What we’re left with, then, are landlords’ claims that long-term tenants have left these apartments in such dire shape that they simply can’t afford to fix them and no real way to tell if that’s true. Most landlords don’t have to open their books to the city or state unless they’re receiving some sort of subsidy, and there’s no agency going around checking that the four-bedroom in Washington Heights that CHIP claims is a gut job really does need $150,000 in renovations. “I’ve been in vacant apartments that all they needed was a paint job and new appliances,” Linda Rosenthal, a state assemblymember who has a bill that would tax landlords who keep their units vacant, said. “Are there apartments that need massive overhauls? Yes. But they’re presenting this as a crisis of decrepitude that’s not accurate.” And so there’s a standoff while the apartments sit empty all the same.

So we have these competing numbers. But let’s agree that, in a housing crisis, even one empty affordable apartment is bad. What’s a hard-up landlord to do? Well, that’s another standoff: “We have tools to make building repairs and upgrades and we’re creating new ones,” says William Fowler, an HPD spokesperson. While landlords are claiming poverty, he pointed out a new pilot called Unlocking Doors, which can provide landlords with $25,000 per unit for rent-stabilized, prioritizing apartments with the lowest rents, to help fund their renovation costs. In exchange for the capital infusion, these apartments would be reserved for unhoused tenants with vouchers while preserving low stabilized rents. When I asked Martin how much the city would have to offer to bring units back online, he said, “I don’t think the city has enough money, frankly.” He also didn’t like it on principle: “I don’t think it’s in the best interest of taxpayers or anyone for there to be an empty pot where private businesses are drawing down funds.”

Sam Stein, housing policy analyst at Community Service Society, sees the Unlocking Doors pilot as “politically confrontational” — a way to call landlords on their claims about lack of funds. If it’s really just about the repairs, why say no? The landlords’ legal challenge, having now reached the Supreme Court, seems to answer the question. CHIP and other landlord groups have petitioned the high court to consider their bid to kill rent stabilization. “At some point the government is saying we’re mandating you provide affordable housing at a cost that doesn’t compensate you for that,” Martin says of the pending court challenge. The previous loopholes of the system — 20 percent increases between leases, drastically increasing rent after individual apartment improvements and capital improvements (many of which were done fraudulently) — had been a kind of financial silver lining for owners. If they held onto their buildings for a long enough time, at least some of the units would convert to market rate and they’d begin to make real money. But with a more permanent stabilization regime in place, the entire business proposition of rent stabilization had changed. Suddenly the landlords who could wait out their tenants were left with what they saw as a bad bet. But that’s just the risk you take in business, says Rosenthal, the state assemblymember who wants to tax landlords with vacant units. “Landlords portray themselves as victims of the system,” Rosenthal said. “But the fact is they’re in the business of renting out their units. It’s not being foisted on you.”

And it is a business, whether you think that’s a good way to organize affordable housing or not. Which is why Stein, for his part, sees the stakes as more existential. “If landlords absolutely hold on tight,” Stein says of the standoff, “then we’re raising questions about the wisdom of having a system of landlords.”

Are the Landlords Bluffing?