Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, again, everyone. In the midst of New York's always in effect housing shortage housing crisis, how many rent-stabilized units are sitting vacant? Well, according to a New York State Home and Community Renewal Memo obtained by the nonprofit news organization The City, landlords reported more than 61,000 rent-stabilized homes vacant in 2021. That number from a state agency. A city housing agency, the Department of Housing Preservation and Development, contends that the number is actually far greater than even that, 88,830. That's almost triple the number that were reported vacant in January of 2020.

What's going on here? Tenant activists say that landlords are intentionally withholding these rent-stabilized units to create scarcity and force legislative changes for their own benefit. Some landlord groups say that there's a cost-benefit to keeping a rent-stabilized unit empty. We'll explain as we get into all of this now with Sam Rabiyah, reporter at the nonprofit newsroom The City, which broke the story. Hi, Sam. Thanks for coming on today. Welcome to WNYC today.

Sam Rabiyah: Hi, Brian. Thank you so much for having me.

Brian Lehrer: HPDs eye-popping number, the city agency that reports on this, that more than 88,000 rent-stabilized apartments were sitting vacant as of last year. That's an estimate. How did they arrive at that figure?

Sam Rabiyah: HPD alongside some folks from the census actually conduct this survey called The Housing and Vacancy Survey, which I know a lot of folks are familiar with. I think a lot of experts do consider this survey the official source of documentation on what do vacant homes look like in New York City right now. I talked on the phone with both their chief research officer and also their press contact.

They have a very in-depth methodology from what I've been told around how they actually approach this question of where are vacant homes, and why are they vacant. There's a lot of different sources of information that go into that, that also includes on-the-ground research like door-knocking and making phone calls. With all that, that's how they arrived at this survey that showed over 88,000 vacancies.

I think what's significant about this number is, one, it's more than 20,000 more units counted than what landlords registered to the state agency during that year. It's higher than the number that landlords are self-reporting. Also, the HPD survey makes a distinction between units that are considered vacant and unavailable. They're deemed unavailable for rent, and then ones that are vacant and available. What I was told is that a unit purposely being held off the market, which we still don't know exactly how many of those units actually fit that scenario, but that whole pool of 88,000 does give us the universe of potentially warehoused units or potentially these vacant units that are being held off market.

Brian Lehrer: Can you look at these numbers and get any more specific information like what neighborhoods these vacant rent-stabilized units tend to be in or who owns them, whether they're corporate landlords or so-called smaller landlords?

Sam Rabiyah: Unfortunately, we weren't actually able to find that level of detail in the reporting that we did. A lot of folks that I talked to were really curious to know on a building level, how many vacant apartments actually were in their building, were in their neighbor's building, were in the general vicinity around where they live. That's not data that has been made publicly available to my knowledge.

It's the highest level of detail that we were able to get was on a borough level, and that came from the self-reported numbers to the state agency that was in our original article. I think there's still a lot of open questions that center around the details of the state and I think the details are important for the public to know. I think as we continue to report on this issue, we are looking to see if we can get more detailed data further down the line.

Brian Lehrer: Now, listeners, we'd love to get some of your calls about the 88,000 plus vacant rent-stabilized apartments estimated for the five boroughs or even the 61,000 actually reported by landlords to the state, 212-433-WNYC. If you're a tenant in a rent-stabilized apartment at the moment, you don't have that issue.

Maybe you moved out of one recently, and are seeing that it hasn't been rented to the next person, though, you would like to see it paid forward, that rent-stabilized rent, maybe you're a tenant activist or if you're a landlord who owns a rent-stabilized unit or more than one that you're keeping vacant, we want to hear from you help us report this story. 212-433-WNYC, 212-433-9692 with Sam Rabiyah, reporter at the nonprofit newsroom The City, which broke the story about these numbers.

Let me move from the estimate by The City that 88,000 to the 61,000 that the state reported. Even that is an 8% drop in the number of apartments even registered as rent-stabilized between 2019 and 2021. What's going on there, and how significantly does a decline like that affect the overall supply of rent-stabilized units in the city?

Sam Rabiyah: I think that that decline specifically in the time frame that you mentioned, to a lot of tenant advocates and other folks who have been working on this issue for quite some time now, really indicates that, to some extent, this issue is escalating and that there has been a recent increase that seems very statistically significant according to the data that we have on hands.

I would say that just overall, rent-stabilized housing in New York City is some of the most affordable housing available. A lot of folks that I talked to really emphasize this point that oftentimes a rent-stabilized unit can be even more of an opportunity for low-income New Yorkers than stuff that receives state or federal funding or what others would consider affordable housing.

There's a lot of discussion too around homeless folks in New York and specifically how rent-stabilized housing is a potential source of homes for formerly homeless folks, specifically those that have an income that could pay a rent-stabilized rent. A lot of the activism work around that specifically from years ago-- This has been a problem that has persisted for quite some time.

A lot of the activism work around that has specifically noted how even just the idea that we have such a large number of rent-stabilized units that aren't being rented right now poses a problem, particularly for New Yorkers who are vulnerable in certain ways. I think the data showing that this number is increasing is definitely raising the alarm for some folks right now.

Brian Lehrer: One landlord group, and it looks like we have their executive director maybe calling in. Jay in Manhattan, stay there. We're going to take your call. CHIP, the Community Housing Improvement Program, your report blames reforms from 2019, and before we take his call, just give us a little factual background as to what the reforms from the New York State Legislature were in 2019 that he may about to refer to.

Sam Rabiyah: Sure, yes. I'll just try and give you a quick summary because there's definitely a lot to talk about. Basically, prior to 2019, there were a lot of legal pathways for landlords to increase their rent in a rent-stabilized unit that they own after it becomes vacant. There was something that a lot of folks refer to as the vacancy bonus. Basically, prior to 2019, if your tenant leaves a rent-stabilized apartment, you get to jack up the rent 20%.

There was also something called the vacancy decontrol, which essentially meant that once the rent in that apartment hit a certain number. It changed over the years, but it was around like $2,000 to $2,700 a month. Once the rent actually hit that number, the unit left the stabilization universe altogether and just became market rate, and you could charge whatever you want. A lot of tenant organizers that I talked with noted that this created incentives to get to create vacancies. If you're able to vacate your apartment, that means that you can raise the rent and ultimately, reach this target where you can charge whatever you want on that apartment.

Brian Lehrer: That could result in harassing tenants out.

Sam Rabiyah: Yes, and a lot of folks that I talked to have reported issues like that in particular areas of the city. Those two legal pathways were abolished in the 2019 law. I think a lot of the landlord groups that I talked to including Jay, I did talk to Jay for this story note, are blaming some of the rising vacancy rates on this change to the law. Saying that it really curved a lot of property owners' ability to create an income, one that could sustain making needed repairs. That became a really big part of this debate, although hopefully we can get into this later. Some of the data that we did uncover raises some questions about certain claims that groups like CHIP, other landlord groups as well are making about their financial situation.

Brian Lehrer: All right, so let's take that call first. Jay in Manhattan, who again did identify himself to our screener as the Executive Director of CHIP, the landlord's group, known as the Community Housing Improvement Program. Jay, thank you for calling in. You're on WNYC.

Jay: Hi, Brian. Hi, Sam. How's it going?

Brian Lehrer: Okay, so can you confirm the number, these estimates, first of all, from the state, about 60,000 vacant rent stabilized apartments as of last year, the city estimates more like 88,000. Does that sound right to you?

Jay: Yes, no, it doesn't sound right. As we worked with Sam on this story, and it's admittedly a very opaque system in how we regulate rents and rent-stabilized properties in this city. There are multiple city and state agencies that cover regulations. HPD does a survey, and then they extrapolate that data to assume what the vacancies are, and then DHCR actually does the actual registrations for these apartments. Owners are legally obligated to register what units are online and what units are offline. DHCR has this data, but what happens is HPD does this survey, which is what we in government and lobbyists and et cetera, and the press are what publicly we have to go on to know what these true vacancies are.

What we did as an internal organization is we survey radar our members, we looked at the housing vacancy survey, and we believe that the number is closer to about 40,000 to 42,000 units that are on permanent vacancy. There's always what's called churn in the housing market units between Lisa's for two to three months at a time when they're being touched up with paid, et cetera before they're released out. We think the additional reporting that shows there's maybe 20,000 or perhaps even 40,000 more units in vacancy. They may be at one time temporarily vacant, but we believe that the truer number that needs significant renovation costs is closer to 40,000 or perhaps even slightly lower.

Brian Lehrer: Even with that 40,000, let's say that's an accurate number, that's still a lot of apartments. Why would a landlord keep a rent stabilized apartment vacant for an extended period of time getting zero rent instead of getting the rent that they could get under the law?

Jay: This is where it gets paradoxical right, with the 2019 rent laws. What happened in 2019, Sam was absolutely correct that those other mechanisms to increase the rent were removed, but also was changed what's called the individual apartment improvement program, which allowed for an owner to apply for renovation costs to the next renter. That was capped at $15,000. That $15,000 was then prorated over 30 years, meaning that the owner would only be able to apply for a $15,000 rent increase for 30 years per unit at capped at three per building.

When we're looking at these units that are coming offline, and Sam in his reporting also included some 421A buildings, and it admittedly said that probably was late raising the average rent on some of these units, but the units that we see consistently coming on vacancy are well below markets. You're looking at an apartment that's been occupied since the late '70s, early '80s.

The average rent on that unit is probably about $800 when the median area rent is probably closer to 1400 or 1600. It's already about half what the market rent is for that area. That difference in rent is being made up by other renters and the property owner, by the way, this is not a subsidy, there is no subsidy for rent stabilization. It is a system that relies on other renters paying more money or the property owner figuring out a way to cover the below-market cost of the rent.

Brian Lehrer: Jay, I've got to move on soon and take some other callers. I hear everything you're saying. Just clarify one thing for us on that $15,000. You said that's the total amount that, under the new law, they can raise the rent over a 30-year period. I'm not sure I understand that. What would that mean? They can raise the rent each year after that renovation

Jay: That's prorated. It works out to $83 a month.

Brian Lehrer: I see. Thank you very much for weighing in. Appreciate it a lot. How would you put that call into context, Sam? Any anything there that you need to fact-check?

Sam Rabiyah: No. I appreciate Jay coming on. I think these comments definitely point to some of the questions that were raised and the data that we were able to uncover. I think one point that's important to make is that we do not have the granularity in the data to specifically know how many of these units are in this desperate need of repairs.

Unfortunately, CHIP was not able to share any internal data or record-keeping that they have on that. Some of the key pieces here that I think are important to note are that, one, even during the pandemic, the average net operating income, basically income, after you take away all expenses, the average net income that one rent-stabilized department was making, was still between 6,000 and $8,000 for the year. That's just one unit.

Brian Lehrer: What's your answer to the question I asked him, which is what are they waiting for if the rent that they're getting on those vacant apartments, whether it's 40,000 or 88,000 is zero compared to the rent-stabilized rent they could be taking in?

Sam Rabiyah: For that, I would open up the conversation to some of the other housing advocates that I spoke to. There's a lot of speculation around why this is happening. I talked to several tenants across the city who live in buildings where there's a high vacancy rate. They talked about some situations where landlords were at, there's this term called Frankensteining where if a landlord's able to vacate two adjacent apartments, they can actually break down the wall between them and create one larger apartment, which, at this time, allows that to leave rent stabilization. I've had a lot of reports of that from tenants. That was one potential incentive.

Although there is some indication from different governing bodies that loopholes going to be closed soon. I think also some folks have this suspicion that there is a false sense of scarcity being created. Ultimately, we don't really know, like the data that we have can only speak to the vacancy rate and also how much money landlords have been making, landlords of rent-stabilized housing. That's where all these questions come from.

Brian Lehrer: Let's hear now from a tenant calling in from a rent-stabilized building, but who I think sees some things going on around him. Jose, in the East Village on WNYC. Hi, Jose, Thanks for calling in.

Jose: Hey there, First-time caller, longtime listener. We're in the East Village. We've always had market-rate apartments for 25 years. Then as we started to slow down working we found in a rent-stabilized apartment that was in a walkup un renovated, the floors were crooked, and a lot of East Village character. We've been in there for I guess six or seven years. When the pandemic came, the building cleared out people, I guess, who weren't really living here with more beyond school or whatever, a job.

The building was half empty. They renovated all of the apartments except ours because we figured why would they renovate ours. At the very end, they said, We're going to renovate yours too. We moved next door for two months while they renovated ours, and we moved back in. Now I guess half the apartments in the building are renovated but empty and there's no effort to rent them. We would know because we live there. It doesn't make a lot of sense. Says we're personally very grateful. We wondered if maybe when you have all those empty renovated apartments if you can deliver a building partially occupied it maybe if you're trying to sell it, it would be a better deal.

Brian Lehrer: You think, Sam, any evidence of that in your reporting?

Sam Rabiyah: Yes. That did not come up in my reporting, to be totally honest, and yes, thank you so much for sharing your story. The accounts that I heard from tenants who lived in these half-vacant buildings, was that this vacancy actually did create a lot of problems for them and created more opportunities for vermin and other potential repair issues to go unchecked and unnoticed that living next to a vacant unit added more stress and anxiety that this is a space that's not being kept up.

Then also for some folks who reported this Frankensteining issue that having really intense construction was also very disruptive to their living space as well. From the folks that I talk to, I heard a lot of the negative impacts of what these vacancies mean for folks who live in these buildings but yes, I would be very curious to know whether what you're saying is a possibility.

Brian Lehrer: Jason in Astoria, you're on WNYC. Hi, Jason.

Jason: Okay. Yes. Look, I'm actually a landlord myself and I know very much about this issue personally because I'm involved on a daily basis. I just want to say like, you mentioned in the beginning that it was an economic benefit to keeping apartments vacant but it really is more like avoiding an economic loss. That's not what comes out in any of the reporting that I've read in the city and most of the advocates whether it's in the Twitter-sphere or wherever, they're just not getting to the basic principle that you can't force someone any more than you can force a coffee shop to give away coffee for free below the cost of it to make coffee. You can't force anyone to pay negative into a renovation and then rent it back out at an effective loss.

That's one thing. The other thing is that this all started with the 2019 HSTPA law where advocates and politicians and the folks that wrote the bill did so without much input from landlords even though landlords and organizations like CHIP and RSA and [unintelligible 00:22:40] and everybody warned them over and over and over again that warehousing would be a direct consequence of that loss.

Instead of going back and saying, okay, we didn't think it was going to happen but it did happen, it is happening. We should go back and we should make reasonable changes to the HSTPA but instead, they're just going to keep going back to the well which is the landlord's pockets and they're going to keep going back to the same place, banging their heads against the wall, making the same mistakes over and over and over again until they realize that all the stakeholders involved whether it's the government, the tenants or the landlords can all provide an enormous amount of quality affordable housing if they just keep reasonable economic incentives in play for everyone to win. I can listen off the air.

Brian Lehrer: Jason, thank you very much. How would a tenant advocate respond to that based on your reporting, Sam, do you know?

Sam Rabiyah: Right. I can't necessarily speak on behalf of all tenant advocates. I think it would be good for them to also have an opportunity to respond to this question. I can, I guess, speak from my perspective of someone reporting on this story. I think that there are a lot of anecdotal examples where there are units that are in a state of disrepair and landlords do not have the money to repair them. I definitely acknowledge that there is bound to be situations like that that exist within this large pool of data that we found. I think what we were interested in looking at for this story is the overall trends and the fact that, one, we have this really high vacancy rate right now.

Two, it's still unknown how many of these units are unrentable because of their repair issues and would need something like a gut renovation to come back to the market. We still do not have that data and some of the landlord groups CHIP who we heard from earlier are unable to share that. That's still an open question. Three, over the past decade or so, landlords have continued, as a whole, to have seen increased profits, and that landlords, as a whole, even during the pandemic we're still seeing a profit from renting out rent-stabilized units. Those are just the pieces that we have from the data at this point. I think that's where a lot of the questions lie.

Brian Lehrer: I even wonder if some maybe bigger landlords are waiting to see what happens in the election. The last time we had a Republican governor it was George Pataki elected in 1994 and within a few years, it became a major issue in Albany and the rent laws got loosened from a landlord's perspective. We got those things like [unintelligible 00:25:43] control that were rolled back in 2019. I wonder if some of them are waiting to see if Zeldin gets into office but I guess we will find out. Sam Rabiyah, reporter at the nonprofit newsroom The City. Thanks for sharing so much good reporting with us.

Sam Rabiyah: Thank you so much for having.

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