“Mamdani reverses campaign promise to expand rental assistance” is the sort headline from the New York Times That feels like a blow to a mayor. Gothamist had the story two weeks ago, but the headline was tame (“Mamdani delays expansion of New York housing aid program amid budget pressures”).
The ostensible reason for the decision is that Mamdani needs to close a $7 billion budget gap, and cannot add spending to a CityFHEPS program that has already increased from $176 million in fiscal year 2019 to $1.2 billion last year.
But a political adviser said there is likely more to it.
“The huge budget aspect obviously plays a role in the new mayor’s move, but I suspect there is a deeper underlying ideological reason behind it,” the source emailed me. “The mayor and Cea Weaver and the like are routinely suspicious and do not support any program that addresses affordable housing instability and homelessness by paying landlords.”
Edited version: “The mayor and Cea Weaver don’t like paying landlords.”
In any case, they cannot pay landlords with money they do not have. Remember, they can’t raise income taxes. Only the state can do that. And that won’t happen this year with Gov. Kathy Hochul facing a Republican challenger.
But tax revenues continue to grow even without a rate increase. Will Mamdani CityFHEPS eventually expand to comply with the law passed by the last city council? That’s questionable at best.
Rather than fight the City Council’s lawsuit demanding full funding for the expansion, Mamdani is attempting to negotiate a settlement with the City Council and the Legal Aid Society.
“It’s not just about the money involved, it’s about the mechanism and who gets paid,” the source said. “I think City Hall has other plans for this crisis. Everything they do in this area does not include rent payments.”
The Adams administration claimed the CityFHEPS expansion bill could cost $17 billion over five years. The council insisted it would be less, but it would be worth it anyway – partly because vouchers are cheaper than shelter beds.
Lost in this debate is an uncomfortable truth: rental vouchers do not create housing. They do the opposite: they increase competition for the available supply. That drives up rents.
Homelessness is not just about poverty or mental illness. Many cities have poverty rates like New York’s, but little homelessness because housing is available and cheap. Here, the vacancy rate for voucher-eligible units is approximately 1 percent.
A family in a shelter or crashing with a relative takes their voucher and goes apartment hunting. The city must ensure that enough housing is built to compensate for the increased demand.
What we’re thinking about: Michael Powell has been a journalist in New York City for decades, but in the 1980s he was a tenant organizer in East Flatbush. That gave him a fascinating perspective from which to write about the struggles of tenants and owners of rent-stabilized buildings — a perspective, he notes, that Mamdani lacks. Powell posted one free link to his article. Send your thoughts on this to eengquist@therealdeal.com.
Something we learned: Many readers emailed me to say that NYCHA’s $54,000 per apartment cost to install heat pumps was too high. But one real estate source, whose co-op spent $70,000 per unit to add heat pumps, thought it was too low. NYCHA told me the $38.4 million project included electrical upgrades, framing, radiator removal and more to accommodate 2,137 heat pumps in 712 units, as well as new hot water systems. Alternatives to solve the project’s heating problems would have cost the same or more, a spokesperson said.
Elsewhere…
The mayor’s new Chief Technology Officer, computer scientist Lisa Gelobter, led the team that developed the animation technology used to create GIFs. She was also on the Hulu launch team.
Of those IDsthey should be able to add technology to the outdated, cumbersome HPD violation process.
I’ve been collecting anecdotes and opinions about housing violations for a future column. From my conversations with landlords, the process is full of inefficiencies – and more than a little unfairness.
Gelobter and her team could start introducing technology to make it easier to clear violations after repairs are made.
Coordinating city inspectors’ follow-up visits to tenants is a full-time job for some property management employees. Even if they manage to get everyone on the same page, sometimes the inspector or tenant misses the appointment, and it can take weeks or even months for the stars to align again.
One landlord suggested that a superintendent could record and upload a video showing the completed repair, with the tenant confirming it had been done. An HPD employee can then resolve the violation without leaving her desk.
Closing time
Residential: The highest housing deal recorded on Thursday was $16.4 million for a sponsor sale 4,962-square-foot condominium unit at 211 West 84th Street on the Upper West Side. Alexa Lambert, Alison Black and Elizabeth Goss of Compass did the entry.
Commercial: The best recorded commercial deal was $5.9 million for a bulk sale of condominium units, storage units and parking spaces by the Permanent Mission of Canada to the United Nations.
New on the market: The highest price for a home that came on the market was $9.7 million for a 4,592-square-foot, 25-foot-wide townhouse at 37 Garden Place in Brooklyn Heights. Jennifer H. Cooke of Brown Harris Stevens has the entry.
Groundbreaking: The largest building permit filings were for a combined project at 680 and 690 East Fordham Road in Belmont. It would be 190 units and 116,822 square feet. Nikolai Katz submitted the permit on behalf of Hen Vaknin of Bridge Asset Management.
— Matthew Elo
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