Care about renters? Save this tax break

The politicians who claim they are fighting for tenants’ rights and the protection of affordable housing are the same ones who are failing renters most in need when it comes to actual legislative action. Case in point: the impending expiration of the J-51 program, bringing an end to one of the few programs that actually succeeded in preserving affordable housing for millions.

Progressive politicians are notorious for throwing gasoline on the landlord vs. tenant fire that they helped ignite decades ago. Years of dog-and-pony shows for the cameras and headlines — the rallies, press conferences and demonstrations — have done absolutely nothing to address income-insecure tenants, or help increase and preserve New York City’s affordable housing supply.

While politicians demonize small property owners for housing issues that they often exacerbate, programs such as J-51 and 421-a have played a significant role in ensuring that new affordable housing is built and that existing, aging affordable housing is improved and maintained to provide adequate living conditions for New Yorkers. This year, politicians in Albany and New York City are allowing both programs to expire without any remorse — and more importantly, without offering replacement programs that would help address the festering problems of the city’s aging affordable housing stock.

The 2021 Housing and Vacancy Survey shows that a little more than 3,000,000 of the city’s apartments — that’s four out of every five units — are in buildings constructed before 1974. Even more alarming, approximately 2,042,200 of these rental units, or 56% of the entire housing stock, are in pre-1947 construction. It’s simple math: the vast majority of New York City’s apartments were built, at a minimum, anywhere between 48 and 75 years ago.

This year’s research from the New York City Rent Guidelines Board shows that rent levels and operating income needed to maintain and make necessary repairs to these aging buildings and apartments is significantly lower than in buildings constructed after 1974. When buildings produce less revenue, that means the property owners lack sufficient funding needed to invest back into their apartments. That is why a program such as J-51 has been so significant for mom-and-pop property owners, especially in the outer boroughs, for the last 65-plus years.

In fact, J-51 was enacted by the Legislature shortly after World War II as a way to encourage owners to make necessary upgrades to buildings that were outdated and in dire need of improvements at the time. As time progressed, this highly effective program expanded to its current form, allowing for tax abatements over a period of time for property owners who invested in significant renovations and upgrades to their buildings — as long as apartments that are rent-stabilized remain regulated.

With an aging housing infrastructure, J-51 has become even more significant to the affordable housing landscape. Last year, the City Council made the correct decision of resuscitating J-51 for at least six months after it lapsed. The measure not only revived the program, but also applied retroactively to projects with pending applications submitted at the time of its initial expiration, which had coincided with the worst of the pandemic.

The problem with the City Council measure: It was meant to provide a temporary reprieve in order to provide dozens of Council newcomers with time to negotiate a new program, or renew the program long-term, before its expiration on June 30. Those six months came and went without any renewal or updated J-51 program in place. Even worse, there is no urgency whatsoever from elected officials to renew the program.

For decades, progressive politicians at the state and city level have campaigned on prioritizing the construction and preservation of affordable housing in New York City. The vast majority have not only failed, they have also created onerous legislation, such as the 2019 rent laws. Changes to housing laws have often been mislabeled as the strongest tenant protections in New York history, when in reality they expedite the deterioration of the city’s oldest affordable housing stock by severely limiting the ability of building owners to reinvest in their properties and apartments. As if these restrictions aren’t enough, property taxes and water and sewer rates continue to skyrocket, further depleting the small rainy-day reserves that momand-pop owners are able to scrape together for emergency and unexpected building repairs.

J-51 has been one of the housing industry’s few successful programs over the past seven decades. Renters should be as vocal as their building owners when it comes to urging the so-called “pro-tenant” politicians not to let J-51 expire. The one thing that renters and building owners agree on: No one wants their homes to fall into disrepair.

Strasburg is president of the Rent Stabilization Association, representing 25,000 diverse owners and managers of more than one million rent-stabilized apartments in the five boroughs that house more than 2.5 million New Yorkers.