Question7 - Columbia GSAPP

How Do We Ensure All Vacant Rental Units in NYC Are Occupied?

A very basic idea for ensuring a more affordable housing market in NYC is to ensure that all units that already exist are occupied; whether rent controlled, rent stabilized, or market rate. The intentional warehousing of apartments by landlords represent one of the most troubling but potentially most easily resolved aspects of NYC’s housing crisis. When landlords intentionally keep rent-regulated apartments empty, it worsens the shortage of affordable housing and drives up rents throughout the city. This practice is unique among landlords of rent-stabilized units, as they may prefer to leave apartments empty rather than rent them out at the lower rates imposed on rent regulated apartments. These landlords have less of a financial incentive to rent units with low rents, where operating costs and overhead (leasing costs) may outweigh or substantially erode rental income.

This strategy is further motivated by a desire to wait for— or force — regulatory changes. Landlords also cite the cost of repairs and maintenance as reasons for keeping units empty, arguing that the current rent levels don’t justify the expense of renovating older buildings or individual units that are in a state of disrepair.

While landlords practicing warehousing are looking for the city to raise the amount of rent they can increase to cover needed repairs or renovations, housing advocates are pushing for policies that penalize landlords who warehouse units. Proposals include levying fines for apartments that remain vacant for extended periods and offering subsidies or low-interest loans for landlords to make necessary repairs. These policies could help bring thousands of vacant units back to the market, easing some of the pressure on the city’s strained housing supply.