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The current state of rent-stabilized apartments
New York City is facing a significant crisis in its rent-stabilized housing market. With thousands of rent-stabilized apartments under threat of foreclosure, the situation is becoming increasingly dire. According to recent data, 176 rent-stabilized units have already been foreclosed upon since 2022, and this number is expected to double each year.
Furthermore, over 2,000 units have been put on notice by banks due to landlords defaulting on their mortgages. This alarming trend raises questions about the future of affordable housing in the city.
The impact of financial pressures on landlords
Many landlords are struggling to maintain their rent-stabilized properties due to financial pressures. Owners often find themselves losing money on these units, leading them to leave them vacant or abandon them altogether. Sarah Saltzberg, co-owner of Bohemia Realty Group, describes the situation as a “bloodbath,” highlighting the challenges landlords face in a market where they are underwater financially.
The introduction of laws in 2019 that capped rent hikes and restricted landlords from raising rents upon vacancy has further exacerbated the issue, discouraging investment in necessary repairs and renovations.
The potential consequences for tenants
As landlords default on their mortgages, tenants are left in a precarious position.
Many fear displacement as new owners may come in and attempt to evict them. Coco Portofe, a tenant in the East Village, expresses concern about the ongoing court proceedings surrounding her rent-stabilized building. While new owners are required to keep rent-stabilized units at the same rent, the financial unattractiveness of these properties may deter potential buyers, leaving residents vulnerable to eviction.
Experts warn that the current situation could lead to a repeat of the 1970s, when landlords abandoned decaying buildings, leaving tenants in the lurch.
The future of affordable housing in NYC
The future of rent-stabilized apartments in New York City is uncertain.
With an estimated 64,314 units losing money, the long-term sustainability of affordable housing is at risk. Mark A. Willis, a senior policy fellow at NYU’s Furman Center, emphasizes that the extent of this rent shortfall will only grow over time. Additionally, the upcoming tax-lien sale planned by the city could further complicate matters, as new buyers of the debt may seek to foreclose on properties to collect what is owed. The combination of these factors poses a significant threat to the availability of affordable housing in one of the most expensive cities in the world.
