Seven New York landlords have joined the Rent Stabilization Association (RSA) and Community Home Improvement Program (CHIP) to sue over new rent regulations they claim are ‟unconstitutional.”

The 125-page complaint, filed in the U.S. District Court, Eastern District of New York, names the city, the Rent Guidelines Board along with each of its members, and the state Homes and Community Renewal Commissioner RuthAnne Visnauskas as defendants.

“The main complaint is that, after 50 years of rent stabilization, it is clear that the system doesn’t work,” said the RSA’s general counsel, Mitch Posilkin.

“If the supposed housing emergency continues to exist, maybe there’s something wrong with the system, and we believe the system violates the United States Constitution.”

The regulations that were enacted a month ago restrict or eliminate various ways landlords can raise rents, including vacancy bonuses, vacancy decontrol, individual apartment improvements (IAIs) and major capital improvements (MCIs) as well as high-income deregulation.

“They have locked in a system that won’t even help the people it’s intended to help,” said Posilkin, “which is low income and maybe moderate income people.”

Previously, an apartment could be deregulated if the rent exceeded $2,774 and the tenant’s income was at least $200,000. Keeping those apartments stabilized is one of the changes in the new law, referred to as the Housing Stability and Tenant Protection Act.

CHIP executive director Jay Martin said the rent regulations will make the affordability issue worse.

“It does not promote socio-economic or racial diversity and in fact, it does not in any way target its relief to low-income populations,” said Martin.

“The law actually makes New York’s affordable housing shortage worse by preventing the construction of new apartments, and improvements to existing apartments in properties subject to the law — leading to a lower quality of housing for almost 50 percent of New York’s housing stock.”

An employee for the RGB said the board hadn’t yet seen a copy of the lawsuit.

HCR’s Visnauskas, said, “HCR has and will continue to both enforce the rent laws and investigate those who violate the law to protect tenants and the housing stock. HCR does not comment on pending litigation.” 

TenantsPAC spokesperson Mike McKee called the legal challenge pointless, noting that prior attempts to fight rent regulations through litigating have been unsuccessful.

“They have so much money they’re going to sue even when they know they’re going to lose,” said McKee.

“I’m familiar with the argument of takings and landlords have been trying this argument for 100 years when New York State first enacted rent control. They tried for years to say rent regulation and eviction (protection) is an unconstitutional taking and they lost every single time.”

According to McKee, under the new law, owners will still see a return on MCIs, just not as much as before. Previously, it was around 20 percent, whereas now it will now be six percent. “That’s a nice return on an investment,” said McKee, adding that tenants would be “defending this law vigorously,” and that Attorney General Letitia James and the Legal Aid Society are expected to get involved.

Industry attorneys who spoke with Real Estate Weekly said that while they couldn’t guess the outcome of the suit, they believe it makes solid arguments.

Martin Heistein, a partner at Belkin Burden Wenig & Goldman, said, “I think it truly has a shot at changing something. Nothing’s going to change overnight, but any objective person can see that there are some changes made that definitely act egregiously to the real estate industry. Whether or not those changes will be deemed unconstitutional on the taking of property is up to the court, but it is a very serious lawsuit.”

Specifics in the law Heistein believes could be vulnerable are related to the fact that the rent law is now permanent as opposed to sunsetting every four years as it had in the past.

He said a new restriction that limits an owner reclaiming units of a property for his or her own use to a single unit may also have merit.

Other issues, such as the restrictions on MCIs and IAIs “might be an example of overreaching by the legislature,” the attorney added.

Luise Barrack of Rosenberg & Estis said that while prior challenges to the rent laws have been unsuccessful, this time it may be different.

“It puts owners, particularly small owners, in a position where they can’t improve their properties even if they wanted to,” she said of the new regulations.

“If an owner can repair a boiler, they’re going to repair it, but they’re not going to put in a new one. It’s going to impact the construction industry and it’s going to impact the quality of life of New Yorkers.”

She also said the regulations are now so burdensome they make it a far more difficult task for owners to recoup rent from non-paying tenants.

“They’re making it so difficult it’s practically impossible. I don’t know how small owners in New York are going to survive this.”

One of Rosenberg & Estis’ own attorneys, Patti Stone, has been named in the lawsuit as one of the RGB member defendants, but other than that the firm has no involvement in the case.

Jamie McShane, a spokesman for REBNY, said that while the board was not in a position to comment on the legal merits of the case, “it is clear that our rent stabilization laws have not addressed the City’s affordable housing crisis or provided meaningful assistance to those tenants who most need help.”

Con Edison has kicked off its effort to juice up its power grid with electric school buses.

The tri-state utility giant is using the batteries on five electric school buses that ferry students to an elementary school in White Plains to pump 10 kilowatts into the system.

While that’s a drop in the ocean for a grid that powers millions of homes and businesses in Westchester and New York City, the goal is to test the system to see how it racks up in improving air quality and grid reliability.

“We think electric school buses may provide an opportunity to achieve two of our company’s goals, which are reducing carbon emissions and maintaining our industry-leading reliability,” said Brian Ross, Con Edison’s manager for the project. “We are innovating to help our state and region achieve a clean energy future in which electric vehicles will have a big role.”

Beginning in 2018, the five e-buses made by Lion Electric, a North American leader in heavy-duty zero emission transportation, replaced the usual diesel-spouting buses on the school routes. After ironing out kinks in communication between the buses, the chargers and the batteries, ConEd started relaying the power today.

The charging and discharging takes place at a depot in North White Plains. There, Nuvve Corp, a San Diego-based, green energy technology company that specializes in vehicle-to-grid transfers, plugs the buses into a charger when the demand for power is low. The chargers reverse the flow of power into the grid at times when the buses are not transporting children.

There are approximately 1,000 school buses operating in Westchester and 8,000 in New York City that could make a significant difference if converted to electric.

 “Our operators are dedicated to enabling the success of school bus electrification and V2G for the White Plains School District, with safety and reliability remaining our top priorities,” said Charlie Bruce, senior vice president of Business Development for National Express, which operates the buses for the school district.

Gregory Poilasne, chairman and CEO of Nuvve Corp, added, “The electric buses provide a cleaner environment for communities and help lower CO2 emissions while ensuring that driving energy needs are met every day.”

Con Edison contracted with First Priority Group to help develop and manage the project.

“Our goal was to bring industry experts together in a collaborative fashion to design and install one of the first true bi-directional V2G solutions in the U.S.” said Alex Cherepakhov, FPG’s chairman and CEO. “Vehicle-to-Grid integration is the next step in the evolution of EV fleet power technology and we are pleased to have collaborated with our partners in making this happen.”

The e-buses are made by Lion Electric

National Express pays the energy costs during the school year. Con Edison, the New York State Energy Research and Development Authority and National Express contributed to paying for the buses. Con Edison and National Express paid for the chargers.

The upfront cost of electric school buses is higher than diesel buses. But using electric school buses for vehicle-to-grid purposes could make them more attractive to school districts, the communities they serve, and the bus operators that provide the service.

School schedules match up well with the power needs of Con Edison’s 3.5 million customers. School buses are generally idle during the summer, which is when utility customers’ need for power rises due to air conditioning. Discharging power from the buses into the grid at these times of high demand would take stress off Con Edison electric-distribution equipment.

Among the questions the project will answer is whether the frequent charging and discharging will speed the degradation of the batteries.

A New York City restaurant is set to charge patrons $50 to take a rapid COVID test before they can enter the premises.

City Winery CEO Michael Dorf announced at the weekend that the company will pilot the testing at its New York venues beginning tomorrow (Tuesday).

“It’s the safest way of creating a hospitality experience in New York right now,” Dorf told Yahoo Finance. “It is expensive and I really wish the tests were cheaper. I wish they were paid for by the state or city –  actually I think our insurance company should be the ones paying for it as they continue not to be paying business interruption insurance and they are keeping all of our liability premiums full, even though we are closed

“But this is better than having no one in the facility or being closed.”

Dorf said the company had been forced to furlough 1,000 staff from its venues across the US since the outbreak of the coronavirus in March.

As the winter weather begins to grip the northeast, fewer diners are venturing into New York’s streets to dine.

And the threat of a full shutdown is looming if cases of the virus continue to increase during a second wave – a move that could spell the end for more city restaurants.

NYC Hospitality Alliance estimates thousands of city restaurants have already shuttered permanently and most of the remaining are barely surviving.

Nearly 150,000 industry employees are still out of work and another shutdown could result in 90,000 New Yorkers possibly losing their jobs again, according to the Alliance.

In September, Mayor Bill de Blasio authorized a restaurants to add up to 10 percent to a customer’s bill as a COVID-19 Recovery Charge to help cover the costs of safety compliance.

But Andrew Rigie, executive director of the NYC Hospitality Alliance, said much more help is needed and the government must step in with aid. “Any additional limitations on restaurant operations must be counterbalanced by the city, state and federal government enacting polices to financially support business owners and workers during these trying times,” he said.

Rigie claimed there was no evidence that restaurants had led to a spike in the city’s COVID cases, adding, “While public health and safety must be paramount, we have not seen contact tracing data indicating that highly regulated indoor dining causes the recent infections, and thus struggling small business owners and their employees should not be the left holding the bag as a default reaction without being justly compensated.”

A spokeswoman for City Winery said the rapid testing pilot program will only operate on Tuesday and Wednesday nights at this time. The restaurant is open Thursday through Monday with no testing requirement.

Uber Eats is unveiling a new outdoor pavilion that will help Harlem restaurants keep serving customers during the worst winter days.

Called The Renaissance Pavilion, the custom-designed outdoor dining destination stretches along Adam Clayton Powell Jr. Blvd from 137th to 139th streets in the historic Strivers’ Row neighborhood.

It will be unveiled on Monday (Dec. 21) with six local restaurants taking part, including Ruby’s Vintage and Sexy Taco, The Row, Alibi, Ma Smith’s Dessert Café, and Harlem Chocolate Factory.

Uber brought together a team of 32 independent small businesses, 84 percent of which are Black-owned, including architects, artists, producers, creatives and merchants for the venture.

“We know black-owned businesses have been disproportionately impacted by the health crisis, and are incredibly honored to work with the Harlem community in partnership with such a talented group of collaborators,” said Julia Paige, Director of Social Impact at Uber.

“Uber Eats is committed to the success of restaurants everywhere, so this is the first in a national series of design projects we’re proud to support across the country this winter, and why we are launching a national Playbook to help cities and restaurants to succeed.”

The pavilion stretches for two blocks along Adam Clayton Powell Jr. Blvd

The Renaissance Pavilion at Strivers’ Row was developed for Uber Eats in partnership with Nikoa Evans, Harlem Park to Park; Valerie Wilson, Valinc PR; WXY architecture + urban design and EatOkra.

Designed to support black owned businesses with winterization during the cold months ahead, New York-based WXY architecture and scaffolding company Urban Umbrella created the pavilion for the six independent black owned restaurants and businesses.

The units have been outfitted with a system of custom-designed Parklets (the outdoor dining structures that sit in restaurant parking spaces), with safety regulations incorporated, such as 50 percent airflow, created by Harlem based architects, and scaffolding that will allow them to maintain and grow their offerings to continue serving their customers safely and comfortably outside through April, 2021.

The heated and architecturally designed Parklets and Umbrellas are timely to address the immediate needs of the restaurants as New York City closes indoor dining.

The restaurants all have winterized outdoor seating provided by Uber Eats and produced with the help of Harlem based architects JP Design, Brandt:Haferd, and Body Lawson Associates.

Artwork adorning the structures was created by artists LeRone Wilson, Guy Stanley Philoche, Dianne Smith, Thomas Heath and Omo Misha.

WXY architecture + urban design developed the corridor design strategy and executed the design plan for the progra. Harlem Park to Park and Valinc PR are executive producers of community engagement, PR and marketing for the six-month activation that will include a schedule of activities and events designed to help drive traffic to the corridor and support Harlem’s significant network of black businesses throughout the duration of the activation.

Uber has also created a Winterization Playbook with WXY called “Keeping the Tables Turning” for restaurants, civic organizations and cities to work together to transform public spaces for use by restaurants.

The Regional Plan Association wants tri-state legislators to phase out single family homes most New Yorkers can’t afford and turn them into apartments.

The RPA believes re-writing the zoning rules for the four million houses in the area would level the playing field to give more people a roof over their head.

“For our region to thrive equitably, state and local policy makers must create diverse, new, affordable housing options,” said Tom Wright, President and CEO, Regional Plan Association.

“Large single-family homes are misaligned with what many people today can afford or need. We can’t just build our way out of the problem. We need to comprehensively rethink our existing housing stock to meet the needs of a new generation.

“We have an opportunity to create a model for smart densification that minimizes the strain on infrastructure, and an obligation to undo the harm which exclusionary zoning has inflicted on communities of color.”

In a new report, entitled Be My Neighbor: Untapped Housing Solutions – ADUs and Conversions, the RPA calls on the governments of New York, New Jersey and Connecticut allow more Accessory Dwelling Units (ADUs), which are basement, garage and attic apartments, and offer financial incentives large single- and two-family houses to include additional units.

Calling the move “one of the best ways to reduce the impact of new housing, as they require minimal additional infrastructure” the RPA says the plan could create 500,000 new homes, including 100,000 in New York City.

According to the RPA, the coronavirus pandemic has exposed overcrowding as a major crisis in the tri-state metropolitan region.

Fundamentally, to self-quarantine, everyone needs a home. New York City alone created 363,000 more jobs than homes over the past two decades, and the region has been creating only one new housing unit for every two new jobs.

 Even if job losses from COVID-19 temporarily reverse this trend, the Association believes the pandemic is driving us toward a wave of homelessness and foreclosures that will create an even greater need for affordable housing choices.

“In this economic crisis we are entering, ADUs provide a dual benefit: more affordable homes for those who need them and more income for homeowners who will struggle to pay their mortgage,” said the civic group, which believes its report highlights the connection between land use and racial and economic segregation.

Across the tri-state region, but most noticeably in the suburbs, municipalities have created exclusionary zoning codes where the only residential buildings allowed are large single-family detached houses.

In communities where detached single-family homes comprise more than 90 percent of the housing stock, the white population is 86 percent, with Black and Latinx representing less than two and six percent of the population, respectively.

The report argues that more flexible land use and zoning practices that allow and encourage ADUs and conversions could both help reduce racial segregation and expand housing opportunities for people of all incomes.

RPA’s report provides two sets of recommendations, both region-wide and specific to New York City, for the creation of new housing stock through ADUs and conversions:

Region-wide:

Promote ADUs and conversions through New York, New Jersey, and Connecticut state legislation: Each state should establish policies that specify the rights of owners, provide guidelines for the creation of new housing units, and give financial and technical assistance to municipalities. In some cases, and with the proper oversight, these new units could contribute to local fair share obligations.

 Make it easier to legalize and construct ADUs and make conversions through zoning code changes and local ordinances: Cities should not just update their zoning to facilitate the creation of ADUs and conversions, but offer incentives for good design and enact more flexible occupancy and dimensional requirements.

 Create more flexible parking requirements: Off-street parking requirements make many ADUs and conversions impossible, so towns should allow more flexibility in parking requirements.

 Provide technical assistance, financing, and information: Cities should offer assistance to owners creating ADUs or making conversions, and prioritize statewide financing programs, especially those targeting senior citizens.

 New York City:

Allow housing conversions and ADUs in NYC by eliminating zoning requirements that exclusively require large detached single-family dwellings: Permitted land use in zoning districts R1, R1-1, R1-2, R2, R2A, and R2X should be expanded to include two-family dwellings; currently these districts only allow large detached single-family homes.

 Reduce multifamily consolidations: Disincentivize the conversion of multifamily housing into single-family homes by continuing to tax the new unit as a multifamily property if the conversion would reduce its property taxes, and explore other zoning and building disincentives for consolidations.

 Support New York City’s Basement Apartment Program expansion on a city-wide level, and look for opportunities for other ways to add ADUs: In addition to restoring the Basement Apartment Conversion pilot program and providing a detailed program for its citywide expansion, the City should reform other laws and building codes to ease conversions of attics, garages, and other spaces that could be converted and meet safety standards.

Rethink Off-Street Parking Requirements for two- and three-family homes: Even when allowed by zoning, additional off-street parking requirements often make ADUs and conversions impossible. Especially near transit, off-street parking requirements for added units should be modified.

The report has been widely welcome by government and civic groups with RuthAnne Visnauskas, Commissioner of New York State Homes and Community Renewal, saying the plan has the potential to expand the stock of affordable homes while making the best use of existing resources.

Matthew Murphy, Executive Director of the NYU Furman Center believes it could yield real benefits for renters and owners, while also creating jobs and stimulating growth.

Other supporters include the Municipal Art Society of New York,  Long Island Builders Institute, Citizens Housing Planning Council NYC,  Enterprise Community Partners, the American Planning Association New Jersey Chapter (APA NJ) and the New Jersey Housing and Mortgage Finance Agency.

Rebekah Morris, Senior Program Manager, Pratt Center for Community Development, said, “In a city and region in desperate need of housing, and with city policy that has long enabled much of small homes policy to remain exclusionary to low-income residents and residents of color, RPA’s policy analysis and call to action on allowing accessory dwelling units is timely and much needed. I encourage anyone that cares about equity, healthy homes, sustainability, housing justice and more to read this report and join the fight to bring ADUs to New York City and beyond.”

The report examines case studies in cities like Greenwich, CT; East Orange, NJ; North Hempstead and Islip, LI where state and local regulations make it easier to bring ADUs online and convert single-family homes.

It also outlines how cities across the country, from Minneapolis to Portland, have passed legislation that provides new frameworks for creating more housing and allowing for more flexible uses of single-family homes.

B&B Urban and L+M Development Partners announced that the Linwood Park Apartments, a new affordable rental building in Brooklyn’s East New York neighborhood, has officially opened to residents.

The building, which includes supportive housing for formerly homeless families, is one of the first affordable buildings to open in New York City since the onset of the COVID-19 pandemic and is the first affordable building to be completed following the large-scale rezoning of East New York in 2016.

“This marks the completion of the first new residences made possible by the City’s large scale re-zoning of East New York and we are especially gratified that 100% of the apartments will serve low income New Yorkers including 30 units for formerly homeless families” said Alan Bell, principal of B&B Urban, a developer focused on addressing the housing needs of homeless families.

 “Hats off to our partners L+M and HousingPlus and to the NYS Department of Housing and Community Renewal and NYC’s Department of Housing Preservation and Development for stepping up to finance such sorely needed housing.”

HousingPlus honored L+M Builders, the building general contractor, and MHG Architects, P.C., who designed the project, at their Housewarming & Good Person Virtual Awards Celebration last month, recognizing the two companies for their “dedication to providing safe and stable housing for women and children experiencing homelessness.”

“The COVID pandemic has disproportionately impacted families struggling with housing insecurity and economic hardship and these challenges have been particularly acute in neighborhoods like East New York,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas. “That is why we are so pleased to see 100 households have moved into Linwood Park Apartments and will have access to resources and support designed to help them move forward and live successful, healthy lives.”

The 10-story project includes 10 units of affordable housing for families earning less than 50 percent of Area Median Income (AMI), as well as 59 units of affordable housing for families earning under 60 percent of AMI. An additional 30 units of supportive housing have been set aside for formerly homeless families. On-site services for these tenants will be provided by HousingPlus, one of the leading supportive housing groups in the country.

Designed as a green building, the Linwood Park Apartments features a photovoltaic solar installation and energy efficient appliances and fixtures. The project also features a host of resident amenities, including a community room with kitchenette, an exercise room, laundry room, children’s library, computer lab, landscaped outdoor space and a roof terrace.

Linwood Park Apartments was designed by MHG Architects PC and features 25 studios, 25 one-bedrooms, 33 two-bedrooms and 16 three-bedrooms apartments, a live-in superintendent and 3,500 square feet of community facility space. The building is located at 315 Linwood Street at Atlantic Avenue.

First-time buyers drove the new development market in Manhattan in Q3 2020, picking up studio and one-bedroom residences, while buyers in Brooklyn sought more space with two-to four-bedroom purchases significantly up quarter-over-quarter, according to new Q3 2020 New Development Insights from Brown Harris Stevens Development Marketing (BHSDM).

In Manhattan, 12 studios and 55 one-bedroom residences went into contract in Q3, up 83 percent and 58 percent respectively quarter over quarter.

In Brooklyn, two- through four-bedrooms were all up more than 50 percent quarter over quarter, accounting for 60 percent of all new development sales in Brooklyn.

In total, 200 new development units went into contract in Brooklyn (37 percent increase quarter-over-quarter) and 154 new development units went into contract in Manhattan (44 percent increase quarter-over-quarter).

Q3 was largely flat with Q1 2020, which saw 167 units absorbed in Manhattan and 195 units absorbed in Brooklyn.

The average Q3 new development discount in Brooklyn from the last ask or last amendment was five percent while Manhattan saw larger discounts averaging 13 percent.

“This past quarter showed promise in returning to pre-lockdown levels, mirroring the strength we saw at the end of 2019 into the start of 2020. Buyers who have aspired to purchase in Manhattan are finally finding their moment with low interest rates, negotiability, and inventory opportunity,” said Stephen Kliegerman, president of Brown Harris Stevens Development Marketing.

“This is different in Brooklyn, where we are seeing buyers dive in or trade up for larger units, getting more space for their money, and hone in on farther out neighborhoods now that commuting is not as high on the priority list.”

Additional Brooklyn insights include:

The median price for Brooklyn new development units on the market was $1.29 million, and an average per square foot of $1,326; while the median price for contracts signed was $992,000 and price-per-square-foot for contract signed units averaged $1,210. This reflects an increase from Q2 2020 which had a median contract price of $895,000 and average price-per-square-foot of $1,145.

Brooklyn absorption decreased 18 percent in Q3 2020 over Q3 2019 (243 vs. 200) but there was a 37 percent increase in signed activity when comparing Q2 2020 and Q3 2020.

The Central Brooklyn neighborhoods of Crown Heights, Bedford-Stuyvesant, Stuyvesant Heights, and Bushwick had the most contracts signed in the quarter (54), while the single neighborhood with the most absorption was in Downtown Brooklyn, followed by Bedford-Stuyvesant.

Based upon Q3 absorption rates (16.6 units’ average a week) it will take roughly 7.5 months to absorb the 491 active units that are currently on the market. In Q2 since the reopening, absorption was 10.5 units a week vs. 16.6 units a week in Q3.

Half the units that went into contract in Q3 were under $1 million (102 units); 38 percent was priced between $1 million and $2 million (75 units); 11 percent were priced between $2 million and $4 million (21 units); and 1 percent were priced between $6 million and $8 million (2 units).

Additional Manhattan insights include:

In Manhattan, the median price for on the market new development for Q3 was $3.6 million and the average price-per-square-foot was $2,936; whereas median price for contracts signed in Q3 2020 was $2.37 million and average price-per-square-foot for contracts signed was $2,306.

Manhattan had a 30 percent decrease in absorption of units in Q3 2020 over Q3 2019 (221 vs. 154).

Whereas in Brooklyn 50 percent of absorbed inventory was under $1 million, just 11 percent (17 units) were priced under this threshold in Manhattan. Thirty-one percent (48 units) were priced between $1-2 million; 30 percent (46 units) were priced between $2-4 million; 21 percent (32 units) were priced between $4-8 million; and seven percent (11 units) were priced between $8-33 million.

West 34th to 14th Streets had the most units signed in Manhattan (31 units), followed by Downtown East (24 units). This excludes buildings where all bulk listings entered the system in one day (46 units in total).

Based on Q3 absorption rates (averaging 12.8 units a week), it would take roughly 22 months to absorb the 1,095 active units currently on the market in Manhattan.

“The discrepancy between median asking price for new development units and the average price for contracts signed illustrates that buyers are seeking more space for less money and are willing to enter submarkets that provide the best bang for their buck,” said Kliegerman.

Robin Schneiderman, managing director, BHSDM, added, “What’s really unique about the last two years is that each quarter has faced historic and unprecedented events that have shaped the real estate market. We saw a window at the end of 2019 and in early 2020 that normalized after the rush to sign before tax changes and lull thereafter, yet before the Covid shutdown. Q3 shows that we are once again stabilizing against that.”

Methodology

These stats analyze what sold and what was listed during the lockdown for Manhattan and Brooklyn between July 1st to September 26th, 2020. This data tracks new development projects only, defined as those new to the market and currently selling sponsor units, excluding conversions that converted prior to 2016. Buildings that have fully sold out of sponsor units are not included, even though they may have recently been built. Resale data is not included in this report. All listings were compiled as of September 26th, 2020. All contract signed activity is based upon publicly reported contracts.

The New York City Department of Housing Preservation and Development (HPD) and the New York City Housing Development Corporation (HDC) today issued a Request for Expressions of Interest (RFEI) aimed at providing renters more choices for paying their security deposits.

As the City considers incorporating more security deposit payment options, the Security Deposit Alternatives RFEI is the first step in identifying eligible companies that can offer alternatives to traditional, lump-sum deposits for affordable housing applicants of newly constructed homes. 

The RFEI is the latest in the City’s efforts to make it easier for New Yorkers to access affordable housing and fulfills Mayor de Blasio’s State of the City 2020 commitment to put money that used to go to security deposits back in the pockets of hardworking New Yorkers by creating options for how renters pay security deposits, starting with City financed homes. 

“Many New Yorkers are living paycheck to paycheck making it difficult to afford the high upfront costs that come with moving into a new home. This administration is committed to creating better options for renters who might have trouble paying a security deposit all at once, and we’re looking for the right partners to join us in this important goal,” said HPD Commissioner Louise Carroll.

“I applaud the Mayor for his vision to create a city that all New Yorkers can afford. This is another major step toward that goal.”

“Security deposits create barriers to mobility for too many New Yorkers. Providing alternatives to these burdensome requirements is an important step towards creating a fairer and more equitable city,” added HDC President Eric Enderlin. “We look forward to advancing this initiative to make it easier to obtain a safe, secure, and affordable home.”

Security deposit alternatives are financial products that allow renters to pay a portion of their security deposit value instead of the full amount at the time of lease-up. A traditional lump-sum security deposit can present a barrier for low-income and middle-income households. The requirement can prevent tenants from relocating to new housing when they need it. 

HPD and HDC will determine if the products and services being offered can meet the needs of the City’s development partners and tenants and consider select providers for a pre-qualified list that developers may consider for doing business.

Under the RFEI, providers cannot charge more than one month’s rent over a renter’s tenancy. They must also allow renters to pay a small portion of the security deposit upfront or the full amount over time while insuring owners against property damage claims or unpaid rent, among other requirements. 

“Policymakers must work with just as much urgency to respond to the economic challenge.  The purpose of security deposits is to ensure that apartments are livable, but it is time to reimagine this so that everyone benefits,” said Council Member Robert E. Cornegy, Jr.

 “Security deposits help landlords avoid damage to their properties, which ultimately should help tenants as well by keeping building maintenance expenses down. For many renters, security deposits only seem like an arbitrary extra fee. So I am very encouraged that HPD and HDC are working to find new solutions to keeping apartments habitable, which will help keep our communities whole.”

To be considered for the initial pre-qualified list, companies should send their responses in a single PDF to securitydeposits@hpd.nyc.gov by February 15, 2021. More information about the RFEI can be found on HPD’s website.  

The Rent Stabilization Association, which represents 25,000 landlords of the one million rent-stabilized apartments in the five boroughs, has slammed the state’s new COVID-19 Emergency Eviction and Foreclosure Prevention Act.

RSA President Joseph Strasburg warned that a blanket eviction moratorium without the requirement of proving economic hardship effectively encourages thousands of employed tenants – many using their apartments as their workplace – not to pay rent, and will push the city off the cliff of bankruptcy and take down the affordable rental housing infrastructure like a house of cards.

“Owners recognize and support the need to help tenants without sufficient financial resources to pay rent due to job loss or health circumstances. However, this state legislation extends the eviction moratorium for residential tenants based on the submission of a simple declaration of financial hardship without proving such hardship caused by COVID-related job loss or income reduction,” said Strasburg.

“With no requirement of proof that the COVID-19 pandemic negatively affected their income, and no income limitation to qualify for eviction protection, a tenant whose household income went from a half-million dollars to $250,000 would qualify for eviction protection by declaring that their income has been ‘significantly reduced,’” Strasburg said.

“Technically, it has – but they clearly could afford to continue paying their rent and should not be protected by an eviction moratorium.

 “This law should have the same scrutiny and eligibility review as Section 8, senior citizen rent increase exemption, and other government-sponsored assistance.  Anything less, what impetus would there be for any tenant to pay rent, even if they are still employed – including thousands working from the apartments they will be withholding rent payments?” Strasburg added.

 Strasburg said the legislation is in stark contrast to California’s legislative approach in their eviction law (AB3088), which requires tenants earning $100,000 on 30 percent of AMI to provide documentation supporting their hardship claims.

 “A cap on the amount of the rent level would ensure that the benefits of this legislation would reach those that need it.  This legislation does not make a serious effort to require tenants to take advantage of available rent relief – such as the DHCR rent relief program, the federal rental assistance program, or the city’s HRA one-shot program.  Lawmakers should be directing their constituents to these programs, whose funds are critical to landlords in maintaining and keeping their buildings safe and to paying their real property taxes – the latter vital to keeping the city and essential services afloat,” Strasburg said.

 “The tsunami of evictions is not occurring; in fact, a minimal number of evictions have been executed since March 7 – and those cases pre-dated March 7.  Tenants have been protected by the Governor’s eviction moratorium executive orders and the Safe Harbor Act,” Strasburg said.

 The Senate Democratic Majority today passed the COVID-19 Emergency Eviction and Foreclosure Prevention Act.

 Considered the strongest bill in the nation to block eviction proceedings from going forward, it allows renters and homeowners to stay in their homes if they are facing hardships due to the pandemic for at least 60 days.