Focus on fixing NYC’s actual housing problem

New York is emerging from a crisis. COVID devastated our economy and left tens of thousands of low-income New Yorkers struggling to pay rent, buy food or pay medical expenses. These people need immediate help from the government and the only real way to provide that help is for the government to give them direct assistance.

On housing, that means fully funding the federal Emergency Rental Assistance Program (ERAP). Monthly surveys of our membership, the owners and operators of rent-stabilized buildings in New York City, suggest that more than 136,000 rent-stabilized tenants are still behind on rent. When you look at all the renters across the state, that number doubles and likely triples. That means that if the state put $2 billion in additional state funding towards rent assistance, it still may not cover the full need.

Additionally, ERAP is not a perfect program. Some renters will slip through the cracks, so the state and New York City should also be investing in other forms of rent assistance, like the newly reformed “One-Shot Deal” program that is administered by the Human Resources Administration. Traditionally, a tenant would have to go to Housing Court before they would be able to get access to this program. Thanks to some reforms passed by the City Council last year, help should soon be available through a simple phone call, allowing renters to avoid Housing Court altogether. Mayor Adams and the Council should make funding this program a priority in their budget.

Unfortunately, some lawmakers are less concerned about solving the problem before them and more interested in using this crisis to pass ideologically driven legislation that will do nothing to actually prevent the vast majority of evictions. I’m talking about the push to pass Good Cause Eviction, which might sound good in theory but would be a disaster in practice.

Renters here already have the strongest tenant protections in the country. Low-income renters are entitled to legal representation and judges can stay evictions for up to a year if a tenant is experiencing hardship. Yet before the pandemic, more than 200,000 renters had eviction proceedings brought against them each year. Roughly 90% of those cases were for nonpayment of rent.

Good Cause Eviction does nothing to help renters who cannot pay for their housing; it expressly allows nonpayment eviction proceedings. Suggesting that this bill will do anything to help the people struggling to pay rent is a flat out lie.

And while doing nothing to solve our immediate crisis, Good Cause Eviction would make our long-term problem, a lack of supply of housing, worse. While supporters of the bill insist it is not rent control, the housing market will most definitely view it as such. The bill would change the economics of housing, creating a bevy of distortions. You can forget about any “affordable” housing ever being built again without massive government subsidies.

The current proposal would basically cap rent increases for owners at a rate below the increase in operating costs in most years. For example, this year, multifamily buildings in New York City are seeing double-digit property tax assessment hikes. The current Good Cause Eviction bill doesn’t account for property tax hikes at all, so if a housing provider raised the rents to cover property taxes, it would be up to a judge to decide if the increase is allowed. Plus, the owner would have to pay the legal fees to make their case.

It’s easy to see why rent control schemes like Good Cause Eviction keep being floated by elected officials. Building tens of thousands (or even hundreds of thousands) of new apartments a year feels like it is too hard to accomplish. A slogan feels easier to enforce.

But if you don’t build new housing, you can’t lower property taxes as a way to reduce rents. So elected officials confronted by an angry electorate feel compelled to do something, even if that something makes housing affordability worse in the state.

You simply need to look at California and Oregon, where similar statewide forms of “Good Cause” legislation have been passed in recent years, to see how housing costs have continued to increase. Why? Because without developing much more housing, regulations like this always lead to scarcity pricing that drives up rents.

As we exit an economic crisis, we have an extremely clear picture of who needs help in our state. Tenants in arrears need immediate help to get back on their feet and so they can avoid eviction. At the same time, renters are being confronted by rising rents, which can only be stopped through the creation of more housing. Good Cause Eviction solves neither of these problems, it just peddles false hope.