Rent Increases No Cure for Abandonment
By Jenny Laurie

While New York City is in no danger of losing its low-income housing to abandonment any time soon, landlords continue to use “distressed housing” as a stalking horse in their demands for high rent increases from the entire universe of rent-stabilized tenants. Data over the last several years has shown landlords’ income is higher than ever before, interest rates are lower than ever, lending terms are great, and most owners have been able to refinance for lower rates. The good economy has minimized the problem of buildings that are physically neglected and behind on their taxes and mortgage payments.

Celia Irvine, housing-policy analyst for Manhattan Borough President C. Virginia Fields, attempted to put the fear of abandonment to rest by addressing the Rent Guidelines Board’s concerns about distressed housing in special, invited testimony in May.

The RGB’s public and landlord members had dragged out the specter of the huge losses of housing stock that resulted from the tremendous abandonment of the 1970s—buildings that were taken over by the city and then slowly destroyed by neglect, leaving tens of thousands of tenants in low-income neighborhoods without housing. Irvine pointed out that there has been a very low level of both mortgage foreclosure and tax delinquency in recent years, thanks to both an improving economy and to better government enforcement.

When the city stopped “vesting” in 1993 (a practice in which it takes buildings from landlords when real-estate taxes have not been paid), it had no property-tax-enforcement policy to replace the threat of vesting for a couple of years. Once the city started several enforcement and assistance programs for troubled owners in 1996, landlords started paying back taxes to avoid losing their buildings to an ownership-transfer program.

Irvine explained that buildings with high maintenance cossts and low rental income won’t be helped by higher rent increases. These buildings are occupied by very low-income tenants who, she pointed out, already pay high percentages of their income for rent.

The message from her testimony seemed to be that RGB members concerned about distressed housing would be most useful by lobbying the city, state, and federal governments for greater funding for rent subsidies, and low-interest loans and grants, maintenance, and financial-management education programs for owners. Also needed are changes in governmental tax and fee policies in order to help owners in low-income areas deal with high taxes, water and sewer charges, and spiking fuel costs.