Video and transcript of our conversation with Errol Louis, Michelle de la Uz, Arpit Gupta and Howard Slatkin
Friday, June 26, Vital City hosted a conversation about what comes next for New York City’s rent-stabilized housing — and for tenants and landlords more broadly — in the wake of the rent freeze championed by Mayor Zohran Mamdani. The night before our event, the Rent Guidelines Board voted to freeze rents on the city’s rent-stabilized apartments, delivering on Mamdani’s campaign promise.
The cheering in the room was real, but so was the harder morning-after question about the ramifications of preventing any rent increases on rent-regulated units at a time when property taxes, energy costs, insurance costs and other outlays are rising.
The question turns out to have very different answers depending on which building you’re standing in. A unit in a mostly market-rate building is not a unit in a 100-year-old walk-up that depends entirely on stabilized rents to pay its bills, and treating the two the same is how good intentions curdle into deferred maintenance, distress and the kind of disinvestment New York spent the 1970s learning to regret.
To sort out where the freeze helps, where it hurts, and most importantly what policy proposals city and state leaders should pursue next, Vital City contributing writer Errol Louis sat down with three people who have thought long and hard about these tradeoffs: Rent Guidelines Board member and NYU Stern economist Arpit Gupta, who cast the RGB’s lone dissenting vote; Michelle de la Uz of the Fifth Avenue Committee, who builds and operates the affordable housing in question; and Howard Slatkin of the Citizens Housing and Planning Council.
This transcript has been edited for length and clarity. Video of the full conversation is posted above.
Errol Louis: Welcome to “After the Freeze: What’s Next for New York City Housing,” presented by Vital City, which seeks to improve civic life by finding great ideas and innovative research and making them available and understandable to those who shape urban policy. I’m Errol Louis, political anchor at Spectrum News NY1 and a contributing writer for Vital City.
We’re glad to have a chance to talk about this issue right after it became newly relevant, following last night’s vote of the Rent Guidelines Board. For the next hour, I’ll be talking with some interesting people who have interesting things to say. We’ll talk for a bit, and then we’ll invite you to join in using the Q&A function at the bottom of your screen.
Joining us this morning are Arpit Gupta, a Rent Guidelines Board member and an associate professor of finance at NYU Stern; Michelle de la Uz, executive director of the Fifth Avenue Committee, a nonprofit community development corporation that develops, preserves and manages affordable housing and community facilities; and Howard Slatkin, executive director of the Citizens Housing and Planning Council, a research and policy organization focused on housing, zoning and neighborhood planning across the five boroughs. Welcome, and thank you all for joining us.
I want to jump right in with you, Mr. Gupta, because you were, as they say, in the room where it happened. What was it like being at that fairly raucous hearing last night?
Arpit Gupta: It’s similar to every year, to be honest, especially for the final vote. We have hundreds of people in the room, and the venue was at capacity. The owner member sitting next to me made a prepared statement, and I couldn’t hear a word of it from a foot away. So it’s a very raucous moment, and I understand it’s a great experience for many tenants. I appreciate the energy everyone brings to the process.
Errol Louis: Does the board meet or have discussions between these public hearings?
Arpit Gupta: We do. There’s a requirement that any discussion involving five or more members be reported to the public, so we have a lot of discussions involving four or fewer people.
Errol Louis: And one last scene-setting question: Has it occurred to the chair that they could keep order in the room at some of these hearings?
Arpit Gupta: I can’t speak for chairs in past years. I imagine the thought has occurred to them, but it’s a real challenge to find a way of doing so while respecting the democratic process and people’s rights to free assembly and speech.
Errol Louis: Fair enough. Let’s get into the substance, then. As a board member, what’s your understanding of the legal requirement to balance the data and the other factors — the overall economy, tenants’ ability to pay, affordability concerns — against the hard data about the cost of operating a rent-stabilized building?
Arpit Gupta: We have a very broad mandate. The board’s enabling statute sets out three basic things for us to look at. The first pertains to building and housing conditions. The second relates to cost-of-living measures. The third is essentially other data the board wants to consider.
So even the conventional framing of what the RGB does — balancing affordability for tenants against cost pressures for owners — is interpreted primarily out of that third leg of the mandate, along with the cost-of-living indices. The statute doesn’t give us that much to work with, and the courts have interpreted quite liberally the ability of boards like ours to weigh the data and balance the competing interests we’re meant to serve.
Errol Louis: Michelle, in your capacity as a longtime builder and operator of affordable housing, what have costs been like in recent years? We keep hearing from the apartment associations and other landlord groups that expenses have been skyrocketing while rents have not. From your point of view, what’s the situation?
Michelle de la Uz: Thanks for having me. There’s no question that the cost of owning and operating housing, including affordable housing, has gone up. Insurance costs in particular — we’ve heard a lot about this — have risen anywhere from 25% to more than 200%, depending on the property, and there’s concern they’re going even higher for 100% affordable projects. Water and sewer rates have also gone up. That’s been our experience.
Errol Louis: And to the extent that we now have this freeze in place, how will it affect your ability to do your work? Do you have buildings that will be affected?
Michelle de la Uz: We do. Tenants need housing — they need affordable housing — and owners need rents to pay the bills associated with maintaining the properties. The challenge is that people’s incomes have not kept pace with the cost of living. We definitely have properties that will be challenged, and quite honestly already have been challenged, in terms of paying our mortgages.
For context: all of our units are rent-regulated, and they’re also under regulatory agreement with the city or state of New York. So we have a belt-and-suspenders approach to ensuring affordability, and all of our tenants are low- and moderate-income. Any rent increase is a real challenge for them — but all of our properties are underwritten by government to assume revenue, meaning rents, increases of 2% a year, and expense increases of 3% a year. We’ve seen expenses go up well beyond 3%, certain categories even more. Meanwhile the revenue side, especially with this rent freeze, will be flat.
That said, we understand why our tenants can’t support paying more. And we know there needs to be another public-policy solution to help address our cost needs as owners.
Errol Louis: We’re definitely going to get to that. But in the short term, after a vote like last night’s, do you contact the city and say, listen, the assumptions under which we struck our deal no longer hold —
Michelle de la Uz: We’ve already contacted the city. They know.
Errol Louis: Seriously, though, what do they say? Much of the impetus for last night’s vote came from City Hall.
Michelle de la Uz: They knew this going in, and I think they recognize the strain it’s going to place on those of us who own 100% affordable housing for low-income tenants. They recently launched a set of new programs to help owners and managers of affordable housing address some of the gaps that exist — not just because of the RGB vote, but because of other strains that go beyond it.
Even absent any rent increase, we’ve had tenants falling behind, especially since COVID. We have higher arrears rates than we used to, and housing court is taking longer to resolve cases, with a backlog at the city’s HRA office. Meanwhile, our lenders still expect their mortgages, Con Edison and National Grid expect to be paid, DEP expects to be paid, and our insurers all expect to be paid — and must be, if you don’t want to default. We’re committed to preserving our affordable housing in perpetuity, but the math is getting harder.
Errol Louis: Howard Slatkin, balancing all these competing needs to make sure we have a stable, if not expanding, stock of affordable housing is something you spend a lot of time thinking about. How important is the distinction between “good” landlords and “bad” landlords? Are the motivations as important as the market forces?
Howard Slatkin: I think the outcomes are what’s important. The goal for landlords’ responsibility should be to deliver quality, sound, well-maintained housing for residents — which is what we all think residents deserve. The challenge is that owners have different pools of resources to do that with. As I’ve said before, a good landlord who’s broke can’t really be a good landlord. You can have all the good intentions in the world, but without the resources to deliver maintenance and services, you won’t be a good landlord to your tenants despite those intentions.
The thing we like to highlight is that rent is two things at once, and we have to keep both in mind. The RGB process is almost the opposite of that — it’s basically an either/or decision. Rent is an expense for tenants; it’s the biggest household expense for most renters in New York City. But it’s also the primary source of operating revenue for the buildings they live in. So when you shortchange that, it comes back to tenants too. They live in the consequences of whether their buildings are adequately funded. That’s what makes getting this set of policies right so important.
Errol Louis: Is the issue that rent is due every 30 days, but the effects of an underfunded building won’t be felt for months or even years?
Howard Slatkin: That’s certainly part of it, though sometimes the effects come faster than that. What you can see in the data that some portfolio managers have shared is that, because of all the bills Michelle just ran through — utilities, taxes, the mortgage, none of which are optional — the thing that gets shortchanged is the physical investment in the buildings, especially the non-emergency work that can be put off. Those things pile up and turn into bigger bills down the road.
One data point I find instructive: the Community Preservation Corporation put out a brief on its rent-stabilized portfolio in New York. Over five years, operating expenses increased 27% while rents increased only 11% — and every category of operating expense rose except one: repairs and maintenance. That’s worrisome, because it means that, by covering all the non-optional obligations, things that really shouldn’t be optional are becoming optional for people managing affordable buildings.
Errol Louis: Michelle, ultimately the HPD inspectors come knocking, right? Maintenance isn’t really optional.
Michelle de la Uz: That’s right. We have an obligation to provide habitable apartments and properties, so it’s not optional. But it’s what Howard is describing: you might take longer to get an extra bid, to find a vendor willing to do the same work for less, you stretch the timeline. That’s not something we want to do, and we avoid it, but the reality exists.
This is why owners of regulated affordable housing have been alarmed for more than a year — going back to the prior administration, even when the RGB was voting for increases. We were seeing expenses rise at an alarming rate and rent collections come in below historical norms. There’s an existential crisis on the affordable-housing side. The city has invested billions of dollars in affordable housing for low- and moderate-income tenants, and for our regulated stock we don’t pay property taxes, unlike the for-profit-owned rent-stabilized stock. We’ve been saying for a while that we’re not on a good trajectory. If we don’t invest in this housing stock, the buildings will suffer, the tenants will suffer, and the investment the city has made over generations is at risk. The whole vision of an inclusive city, where people of all races and incomes can survive and thrive, is at risk.
So we need a variety of public-policy solutions. That said, we know tenants right now — especially low- and moderate-income tenants — cannot afford more. They’re at a breaking point. Add what’s happening with cuts to SNAP and Medicaid and new requirements there, and you reach a breaking point. I think that’s why you saw the fervor last night. For tenants in rent-stabilized housing across the city, this is potentially a question of survival.
Errol Louis: Arpit, Mumbai is often cited as a worst-case scenario, from more than half a century ago. From an economist’s point of view, explain the nightmare we want to avoid.
Arpit Gupta: Let me take an example closer to home: the New York of the 1970s and ’80s, when we had massive distress in the rent-stabilized segment. The Bronx was burning. We saw widespread distress among owners and steep declines in housing value. This was also the period when rent stabilization began. It ultimately led to roughly 100,000 units coming under city control through in rem foreclosure — essentially because the buildings couldn’t generate the revenue to pay their taxes. Today that’s more commonly done through tax-lien sales. But in that period, the city took just under 100,000 units that were unaffordable for private owners to operate into government hands, with the intention of running them as affordable housing. And the conventional wisdom is that it didn’t go well.
So when we talk about the bad scenario, the worry is tangible. You have, as Michelle put it so well, a cap and a freeze on the revenue you can bring in, while costs are not capped.
This whole system is frustrating to sit in the middle of, because it’s pitched as owner versus renter — but the government is in the background controlling all of it. The government controls insurance regulation, which drives the liability exposure and lawsuits spiking insurance rates. It controls property taxes, which Michelle doesn’t pay on her units but which account for about 31% of expenses for rent-stabilized buildings overall. The Furman Center has done great work showing the inequitable burden property taxes place on rental housing generally, and rent-stabilized housing in particular. The Water Board is government-controlled too. So the government controls most of the costs owners face — and then it stands up this board and gives us a mandate to translate those government-set costs into burdens on tenants. We get caught in the middle.
The risk is that if the board sets rent adjustments one way while government does not control costs, costs keep rising, revenues are frozen, and a number of these buildings become unviable. It starts, as Howard said, with deferred maintenance — and the Furman Center has highlighted that we’re already seeing the beginnings of it. That leads to violations and building-condition problems that HPD can try to address in the short run, but only so far. Then you get failures to pay lenders. The nonprofit lenders tell us that maybe a third of rent-stabilized buildings in their portfolios currently don’t have the cash flow to pay their mortgages. They’re dipping into reserves to do so, and once those run out, the buildings go into distress and foreclosure. Eventually the property taxes don’t get paid, it lands in government hands, and you get either government control, as in the ’80s, or tax-lien sales.
This also changes who owns the buildings. The landlords who would buy distressed rent-stabilized properties may not be the same kind of landlord we’ve had — I worry they’d be much more extractive. So there are real, tangible concerns about the future of rent-stabilized housing in a world of capped revenue and uncapped costs.
Errol Louis: It’s interesting that you say “the government,” but this new city government was voted in by the people. As is often the case in a democracy, we have to look at each other and take some responsibility. Arpit, you cast the only dissenting vote last night. Even taking into account what you just said, what were you trying to convey with that vote?
Arpit Gupta: I wasn’t trying to convey anything beyond doing the job. We have a mandate to execute, which has been interpreted as balancing competing interests. I’m just trying to do my best in public service to make what I think is the best decision in the interest of the public I represent as a public member.
I’d be entirely in favor of a rent freeze if it came under conditions that warranted it. This isn’t widely known, but the rent freezes under the de Blasio administration happened either under the extraordinary conditions of COVID, or, in an earlier instance, when the commensurate measure the board uses to track cost changes over time was actually negative — prices were falling — largely because energy costs were declining. In that case, the freeze was a positive adjustment relative to building costs. So rent freezes, even rollbacks, are completely within the board’s mandate and judgment if costs are under control.
And the city can control a lot of these costs. It’s entirely open to the administration to say, “We’re cutting property taxes, we’re capping insurance expenses,” as it has plans to do, in ways that would justify a freeze or a reduction. But the data we were presented this year showed those cost-containment efforts still incomplete, and a cost picture for owners that is quite high across every category. To freeze rents under those conditions presents a real challenge. I certainly acknowledge, as Michelle pointed out, that tenants face substantial hardship too. It’s no easy task to ask hundreds of tenants who come to us in public testimony to bear more. I’m very cognizant of that, and my hope is that we find better solutions.
A piece that just went up on Vital City today tries to advocate for programs that strike a better balance — protecting and capping rental expenses for low-income tenants without defunding buildings, which leads to the drastic outcomes we’ve seen here before.
Errol Louis: Right.
Michelle de la Uz: And there is one cost that, at least, local government doesn’t control — the cost of debt, for the for-profit owners of rent-stabilized housing that isn’t otherwise regulated. And it’s important to recognize that the rent-stabilized stock is not homogeneous. You need policy solutions crafted to its different segments. Some owners bought rent-stabilized properties in a low-interest-rate environment that has since changed, expecting external circumstances that didn’t hold. In some cases they over-leveraged and are now stuck. A building with a few rent-stabilized units that’s mostly market-rate is very different from a building that’s entirely rent-stabilized with very low-income tenants. A lot of our rent-stabilized buildings date to the 1920s — they’re 100 years old, walk-ups. We also have newer affordable housing. The needs are very different.
Howard Slatkin: Let me piggyback on that. I was describing the finances of rent-stabilized buildings recently and said it’s a bit like describing NBA basketball in New York as a general proposition. You can say it’s the greatest year ever — but you still have the Nets. And I’m a Nets fan, to be clear. The point is that rent-stabilized housing is very far from being one thing.
Michelle named the most important distinction: there are buildings that are entirely stabilized, where the building’s income comes entirely from stabilized units. When rents are frozen, those revenues are frozen accordingly. Then there’s another third or so of the stock that sits in buildings that are mostly market-rate, which puts those units in a completely different financial position. When you average the two, you get the Bill Gates-walks-into-a-room problem — everyone’s income goes up on average, but it doesn’t change what’s happening in the 100% affordable subsidized stock, or in the pre-1974 stock that’s almost entirely still rent-stabilized. That’s where you need specific public policy targeted at the revenue problem.
Arpit Gupta: I completely agree with that characterization, and I think it sheds light on something people find confusing. They hear from politicians that profits went up 6% or 10% this year, and if you’re a tenant whose building conditions are bad, you reasonably wonder where the money is going. I understand the concern. But that 6% or 10% is an average of two opposite trajectories. The part of the stock mixed in with market-rate units — because of regulatory abatements, or because some units were deregulated over time — is doing fine; those buildings are seeing record profits. The remaining half of the stock that is 90%-plus rent-stabilized is seeing declining profits and declining valuations. So we need different tools for them. In my Vital City piece I think a lot about how to make more of the stock resemble that mixed stock, which I think makes for a much more resilient housing stock.
Errol Louis: Everyone should read the Vital City article he’s referring to — I found it very helpful. Let’s go deeper into solutions. There are well over 100 people on this webinar, many of them journalists, and the public discussion is happening right now. Michelle, what are the two or three things government should focus on to move the needle, now that we have this new playing field with a two-year freeze?
Michelle de la Uz: A few things affect affordability. One is rental subsidy for eligible tenants. Only about one in four people eligible for Section 8 actually receive it in our city. The state has stepped up recently on rental subsidy, but the need outstrips the supply, and there’s real concern about the hole it could create in the city’s budget. Still, providing rental subsidy at scale for people who need it is one solution.
Another is workforce development. We train more than a thousand people a year and place them in living-wage jobs. A big part of this is that wages haven’t kept up, so we need to train people for the jobs of today and tomorrow and help raise their incomes.
And for those of us who own and manage regulated affordable housing: we’re no longer in a low-interest-rate environment, so we need to revisit our underwriting and pay down some debt — release these properties from debt obligations, because the math, as they say, ain’t math-ing.
Errol Louis: Howard, give us some solutions.
Howard Slatkin: I’ll build on Michelle’s list, which covers the essential components. First, we need a concerted set of policies to keep costs down, and that’s hard because it’s a collection of individual issues — wrangling insurance rates through various reforms, water-rate assistance for affordable housing (which was increased this year, but more is needed). DEP has to cover the cost of operating the water system and faces a similar bind, while affordable-housing operators have no new revenue to pay higher water rates. There are also the administrative costs that jump out of the Community Preservation Corporation’s analysis — the cost of navigating code enforcement, which is important but can be cumbersome and inefficient.
Second — and I’ll admit I haven’t yet read Arpit’s piece, so any overlap is just great minds thinking alike — we should take the tenant-facing half of rent and address it separately from the building-revenue half. Look at solutions that reduce a tenant’s responsibility for rent without reducing the flow of revenue to the building. That includes the supply of Section 8 vouchers, which isn’t where we’d like it, and CityFHEPS, which helps tenants pay the rent needed to keep the building operating. It’s powerful, and it’s costly, so we have to maximize our ability to deliver it.
There are also programs that already exist — SCRIE and DRIE, the rent-increase exemptions for senior citizens and people with disabilities. They’re effectively a rent freeze for people who qualify with incomes below a certain level. The state legislature just expanded eligibility from $50,000 to $75,000 in income, which is great. The idea is that if you have people who can’t afford an increase, you address their need specifically without taking revenue from the building — because those programs issue the landlord a rent-abatement credit in the amount of the increase, as if the rent had gone up, while the tenant doesn’t pay it.
Those are the kinds of solutions we need to look at, because as long as costs keep drifting out of line with people’s ability to pay, this problem only gets worse.
Errol Louis: Arpit, talk about some of what’s in your article, because you’re on a similar track — more means-testing, more tightly focusing where subsidy and support go.
Arpit Gupta: Absolutely, and I’ll talk about SCRIE to make this concrete. With a program like Section 8, you cover essentially the entire rent for the tenant, which is powerful but very costly. It’s a funded program, so people line up, some get vouchers, and many don’t. The city programs like SCRIE cover only the incremental increase. That provides stability — households can plan for what their rent will be — and it’s a lighter-touch intervention. So I advocate expanding SCRIE-style protection, including a new program for low-income renters who aren’t elderly or disabled. That’s one pillar: protecting the lowest-income households.
A couple of others. Given the heterogeneity in the stock, the guidelines should be tailored rather than one-size-fits-all. There are many ways to do this; the way I prefer is to condition the rent-guideline increase on building conditions. This follows testimony from hundreds of tenants who told me the same thing: if you’re a slumlord, you get a rent freeze, while if you operate your building well, with no violations and no eligibility for the city’s Alternative Enforcement Program, which targets the worst violators, you’d get a different adjustment. Tying the adjustment to conditions does a few necessary things. It aligns incentives for proper maintenance. It ensures the worst actors get a worse deal. And, more importantly, it creates an incentive, because with rent-stabilized housing there’s a line out the door for every unit, so an owner can get away with deferring repairs since the tenant is effectively stuck in place. Separate guidelines keyed to building conditions would push against that.
The third, longer-term direction is to make more of the affordable stock look like that mixed-income stock. We have a couple of existing templates. There’s a program called Mix and Match that ensures a building has tenants at different levels of ability to pay. There are new NYCHA developments — in Chelsea, for example — that combine market-rate and public-housing units in the same complex. My idea is to make this happen for more rent-stabilized buildings. You might have a stabilized building with certain vacancies and convert some toward market rate in exchange for deeper affordability on other vacant units, preserving building-level affordability while giving owners flexibility. You could add density on rent-stabilized properties and make the incremental units market-rate, providing the ballast to improve conditions for existing tenants. These solutions are better socially — there’s a lot of evidence that mixed-income buildings produce better outcomes — and financially, because the surest way to make these buildings less dependent on what the RGB decides is to give them a separate revenue source from market-rate tenants who cross-subsidize the lower-income ones. If more buildings looked like that, we could also have more rent freezes in the future, because not all of a building’s revenue would depend on the RGB.
Errol Louis: I liked the part of your article where you talked about pairing apartments within a building — a market-rate unit alongside a subsidized or stabilized one. We have dozens of questions coming in, and I urge people to use the Q&A function. Let me start reading them.
Here’s one from Ilan: The mayor told us there’s a city fund to help cover expenses when rents don’t match them. Any idea what it is? Michelle, do you know about this?
Michelle de la Uz: For those of us who own the regulated stock, it’s part of that TOOLS package to help preserve existing affordable housing that’s rent-stabilized and under regulatory agreement. Howard may be aware of something broader, but that’s what I’m tracking — and we’re eager to apply. I understand things start next month.
Errol Louis: Every so often we report on a relief fund nobody has applied for, because it doesn’t quite match people’s needs —
Michelle de la Uz: Yes. I’m forgetting the name, but I think that was for vacant apartments in need of upgrades, with a certain amount of money attached.
Howard Slatkin: I’m not up on the latest there. It was an effort to get at units that needed capital investment and would otherwise not return to the market — an outcome nobody wants. Setting that aside, there’s a broader set of tools worth emphasizing. The state recently reauthorized the J-51 tax incentive for the preservation and rehabilitation of existing housing, which is important, and the City Council needs to authorize it and get it running so the city has that tool.
At the same time, none of us wants to reach the point where distress gets beyond what can be handled building by building. If individual buildings come in and work out their finances with the city, that’s great — but there are a lot of buildings. There are almost half a million units in the pre-1974 rent-stabilized stock alone, and there aren’t going to be 400,000 preservation agreements. At some point you have to address these issues at scale, not through one-off arrangements. It’ll take a combination of tools in the toolkit to get there.
Errol Louis: Here’s a question about last night from Jay: Why didn’t we see multiple proposals, as in past years? Arpit?
Arpit Gupta: There was a consensus among the other board members about the proposal to be passed, so the board moved ahead with that one.
Errol Louis: Is the assumption that you have until next year to see how this works, or are there interim decisions the board can make?
Arpit Gupta: We have a season — we start around March and go through this final vote, and now we’re done. The remaining board will reconvene next year, and we’ll see where things stand.
Errol Louis: This is from Adam Daly at amNewYork: Christina Smith alleged in her resignation letter that the board’s outcome was predetermined and that questions about the RGB’s data and methodology went unanswered. Do you agree with any part of that? What was your understanding of whether the board weighed the cost data before the vote, and did Smith raise concerns internally before resigning?
Arpit Gupta: One thing I can say is that, unlike in some previous years, I observed no interference by the administration in individual members’ decisions. I have to credit the administration on that independence, and I have to credit the professional, hardworking staff who provided excellent data and services. I stand firmly on those two points. As we discussed earlier, how to interpret the mandate is largely a matter of discretion left to the board.
That said, I hear where Christina is coming from in her frustration about what we do as a society if we have a board able to systematically set these adjustments through a freeze. The mayor, as you know, campaigned on four years of freezes. Will we keep freezing for four years regardless of cost? Everyone agrees we need costs to come down — but the city faces fiscal constraints. If we do all the things we’re discussing — property-tax cuts, more vouchers — that pulls resources from other parts of government. So what actually happens when the rubber hits the road and costs stay elevated while the resources aren’t there? How does Michelle underwrite her properties? If you’re a lender, what do you put down for future rent adjustments? There are real procedural questions about a body, appointed by a mayoral appointee, making decisions that become very challenging for everyone to live with. I hope we find solutions before then.
Howard Slatkin: I know this wasn’t the question, but I’d be remiss not to add my two cents: we should get beyond the gladiatorial spectacle of the Rent Guidelines Board and to the policy issues underneath it. A lot of what Arpit just said gestures at that. The RGB is not in a position to fix the affordability crisis. It has a mandate and has to decide within the parameters it’s given, and that alone will never solve the crisis. It’s the other issues we’re discussing that have to be layered on. We obviously need to pay attention to the RGB process, but we shouldn’t limit our imagination to the decisions before that board.
Michelle de la Uz: Can I pick up on that? I hear you on the gladiatorial spectacle, but I’d love — and Fifth Avenue Committee and Neighbors Helping Neighbors, our affiliate, had tenants in the room — to say that this was historic for them. They’ve been fighting for this; it affects their daily lives. What the RGB hearing process does is make tangible how public policy shapes people’s lives, because they get to participate every year and they understand how it works. I wish other democratic processes were as well understood by everyday people. If we could bottle that energy and bring it to Washington, we’d have dramatically different outcomes. We saw some of it in action in Tuesday’s primary here in New York City. We need that level of civic engagement at every level, all the time. It’s hard to sustain, but it’s what we need to address the other policy problems we’re discussing — because ultimately this is about political will and investment at scale, and that comes only with the kind of pressure we see at the RGB applied to other areas where people are suffering.
Errol Louis: Speaking of vouchers, the City Council is battling right now to finish the budget, and one proposal on the table would expand the CityFHEPS program so that perhaps 20,000 more people could get vouchers. Michelle, thinking of you as a landlord more than as an advocate, would that help?
Michelle de la Uz: Absolutely. We have people who’d be eligible but, for lack of additional resources, aren’t receiving it yet.
Errol Louis: Howard, the budgetary question is that CityFHEPS is expanding at about 4% a month, so the cost of the program would double — it’s around $1.74 billion now — and there are deficits ahead if expansion continues unchecked.
Howard Slatkin: There’s a budgetary question underlying all of this, and trade-offs embedded in it. But vouchers are a great example of a solution worth the cost. Section 8 is an incredibly powerful tool for aligning the interests of tenants and landlords — everyone wants the full rent paid and the paperwork moving so you can recertify every year. The availability of those funding sources to support building revenue and keep people securely housed is enormously powerful.
For budgetary and other reasons, we should also look at solutions like the SCRIE expansion Arpit mentioned. We’ve recommended the same — extending SCRIE-style protection to a category of lower-income residents — because it addresses stability. It’s not as powerful as a voucher, but it’s far less costly and could be scaled more broadly. Balancing those tools is an important piece of this.
Errol Louis: Howard, was your organization on record for, against, or seeking amendments to the 2019 Housing Stability and Tenant Protection Act? The apartment association points to it as a key piece — to put it simply for the audience, it closed off vacancy-deregulation provisions that had long been in place. Landlord groups say it made it impossible for many units to become profitable.
Howard Slatkin: That precedes my time at the organization, but my understanding is that we didn’t take a position. To be clear, we’re not a landlord organization; we’re a housing-policy organization more broadly. That said, there have clearly been consequences of the 2019 HSTPA — some unintended, some untenable — that need to be addressed.
Embedded in all of this is the challenge of having to address both sides of the issue. One unfortunate consequence of a rent freeze can be seen in a building full of low-income seniors, where everyone has a Section 8 voucher to make up the difference between what they can pay and what it costs to operate the building. With a rent freeze, those tenants wouldn’t pay an increase no matter what — and their rent was already effectively frozen for them. But absent a freeze, if rents went up 2%, the building would receive 2% more per apartment from the federal government. With a freeze, you don’t get that. The rent is now frozen for the building too. That’s a consequence of the one-size-fits-all shape of the rent laws and the way they apply across every category of housing. We need to think creatively about sustaining revenue to those buildings in particular — the ones we spent billions of public dollars to create as long-term, sustainable affordable housing — and be partners in keeping them going.
Errol Louis: I should mention that Arpit Gupta has had to step away — we knew we wouldn’t have him for the full hour — and we thank him for his time.
Michelle, do we need to think differently as a city about all of this? A theme throughout this hour has been that there’s far more complexity than our current structure for setting affordable-rent policy takes into account. We have new digital tools, we have AI — the catch-all answer to everything — but we do have the ability to build more nuance into our policy, don’t we?
Michelle de la Uz: We do. To the mayor’s credit, the housing plan — “block by block,” as the deputy mayor has described it — is an all-of-the-above approach. There’s an acknowledgment that building and preserving 200,000 units of affordable housing each will take multiple tools. I think we’re clear on the need and aligned on the ambition. My concern is whether we have the funding to realize it. There’s a lot of political will, and quite a bit of alignment on the all-of-the-above approach. There’s also a sense of urgency among those of us who already own and manage affordable and rent-stabilized housing that we need these solutions yesterday, and at scale. That’s where the alignment isn’t there yet.
Errol Louis: On the credit side, some banks — Signature Bank, New York Community Bank — have voluntarily or involuntarily exited the affordable-housing lending business. Have other players stepped up? Is there relief or innovation there you’d recommend?
Michelle de la Uz: The Community Preservation Corporation did step up in acquiring the Signature portfolio. I’d love to see the philanthropic community come together with government to create a multibillion-dollar fund that provides blended, lower-interest debt, so we could swap out higher-interest debt on our affordable properties for lower-interest debt — but at scale, in the billions.
Errol Louis: What would that enable you to do?
Michelle de la Uz: What I just described. We have permanent mortgages on affordable housing at 6% or 7%. Bringing that down to 4% or 5% would meaningfully improve cash flow and help us address property needs. I’d also point to the underwriting assumptions. When Fifth Avenue Committee goes to the city to build affordable housing, the assumptions are 95% rent collection a month, 90% occupancy, 2% annual increases in income, and 3% annual increases in expenses. Those numbers are a fantasy right now. We need to reset them to the new norm.
Errol Louis: Exactly.
Michelle de la Uz: I’d like to deal with reality. I call myself a pragmatic progressive — let’s achieve the same goals, but realistically, together. We need to adjust these expectations to realize the same vision.
Errol Louis: Howard, your thoughts?
Howard Slatkin: I want to add to Michelle’s point about scale, and raise a caution that’s shouting in my head. We have many segments of the housing stock that will need help, and we can’t forget the long queue of obligations already in front of us. We have our public-housing stock, where we’re partway through a massive generational reinvestment — through RAD, through PACT, and through the Preservation Trust — to recapitalize buildings neglected for decades. We can’t shift resources away from that.
We have the Mitchell-Lama stock, which is in many ways a cautionary tale. You can find buildings there that had rents frozen for seven, 10, 12 years and then faced massive increases at the end — not only huge and dislocating for tenants, but higher than what you’d have needed had you simply sustained revenue along the way, because of the accumulated disinvestment and the big capital needs that piled up.
So we have that stock to assist, and the stock Michelle is partly responsible for, and that doesn’t even cover the private, unsubsidized rent-stabilized stock. My concern is that even after we marshal the resources for the buildings the government has direct financial obligations to as a partner, there’s the private stock that may also need resources — and, as you noted, private lending isn’t growing in that space. When you stack multiple years of a rent freeze on top of that, the terms on which an owner can secure a loan become that much less favorable. That’s going to be challenging.
Errol Louis: That brings us to the end of our time. To Seth and others who asked whether the conversation will be available afterward: an enthusiastic yes. Go to the Vital City site, where it’ll be posted. For now, I want to thank Michelle de la Uz, Howard Slatkin and Arpit Gupta for a great discussion. I learned a lot, and I think our viewers did too. Keep watching this space — meaning Vital City — for an ongoing conversation as we get closer to a sustainable housing policy, which we all agree New York badly needs. Thank you all for joining us.
