- REAL ESTATE EDUCATION
- GIVING BACK
The Real Estate Board of New York to The Committee on General Welfare of the New York City Council Regarding the FY2023 Preliminary Budget
March 9, 2022
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY thanks the New York City Council Committee on General Welfare for the opportunity to provide testimony regarding the FY2023 preliminary budget and how it responds to homeless services, eviction prevention, and affordable housing.
REBNY shares the Council’s goals of identifying greater opportunities to expand housing access, including for the most vulnerable amongst us and those who have experienced homelessness. Preventative services are an important way to do so, and we were grateful for the opportunity to provide testimony last month to this committee on strategies to help prevent unnecessary evictions from occurring.
Please see below for REBNY’s suggestions on these topics in the context of the FY2023 budget proposal.
Investments in Affordable Housing
Combatting our housing crisis requires the city to prioritize and invest in the tools necessary to create and preserve affordable and supportive housing. In the Mayor’s preliminary budget, for example, the HPD preliminary capital budget shows no increase from the $1.7 billion in spending projected for fiscal
year 2023 by former Mayor Bill de Blasio’s administration. The New York Housing Conference has reported that $4 billion in City capital is required to help to begin to alleviate our housing crisis. This includes $2.5 billion in housing investment for new construction and preservation. REBNY believes that it would behoove the Council to consider additional investments in affordable housing through dollars being allocated for the new construction of affordable and supportive housing, and through the preservation of existing affordable and supportive housing.
Given that resources are limited and may require reallocation from other priorities, it is also important that the Council support tax tools that leverage private sector dollars for the creation of the housing the city needs. That means the Council must also continue to identify opportunities to alleviate residential real estate taxes. In multifamily buildings, property taxes often encompass about a third of a building’s operating costs.2 As a result, abatements remain incredibly important in allowing for affordable housing to be created, particularly in new construction. As the State budget unfolds parallel to the City’s budget, it is imperative that the Council support Governor Hochul’s proposals to help alleviate our housing needs. This includes the proposed 485-w program, which would provide the private sector with an important tool for producing permanently below market rental housing at deeper levels of affordability.
Last year, REBNY strongly supported the passage of Intro 146-2018, which allowed for rent supplements paid through CityFHEPS vouchers to better reflect fair market rents. This was a meaningful change to allow households to access housing and a significant preventative measure for directly combatting homelessness. Moving forward, the Council must lead in ensuring that CityFHEPS is fully funded for FY23, and that agency rules do not prohibit the program being utilized to its full potential.
This includes eliminating the rent reasonableness and utility deduction requirements that have prevented New Yorkers from receiving permanent housing opportunities, even when a unit is below market rent, consistent with the payment standard, and provides safe, quality housing.
REBNY also believes that the Council should prioritize eviction prevention, and that rental arrears from the COVID-19 pandemic continue to plague tenants and landlords alike across the five boroughs. Continuing to prioritize initiatives like the One-Shot Deal program are of merit. In addition, REBNY has continued to call for unused funds from the federal government to be utilized to replenish the Emergency Rental Assistance Program (ERAP) at the state level and believes that the Council could be a powerful voice in advocating for the Governor and state legislature to do so. Resources for City Agencies Budget allocations for the Department of Homeless Services (DHS) are diminished slightly from $2.766 billion to $2.151 billion between 2022 and 2023. Much of this reduction is directly tied to the fact that the previous number reflects a $500 million COVID-related federal funding allocation to the agency. In addition, in the preliminary budget, cost savings and the 3% reduction were also achieved by eliminating vacant positions, including 62 positions at the Department of Social Services (DSS) and 131 at DHS.
While the elimination of certain positions may be merited, REBNY shares the concerns raised by homeless service providers that the Council and the Mayor must make sure that both government agencies and City-contracted human services non-profit providers are well resourced to be able to assist New Yorkers facing homelessness.
In addition, while positions were not eliminated, additional funding should be considered for staffing to help facilitate the processing of Emergency Housing Vouchers through NYCHA and HPD. While these vouchers could assist thousands of New Yorkers facing homelessness, they must be utilized by the end of 2023, meaning that temporary funding to help facilitate their utilization is a worthy use of city dollars.
While by no means an exhaustive list, REBNY believes that an overall prioritization of the above would be fiscally prudent and could help to alleviate housing insecurity and homelessness, leading to an overall stronger fiscal picture for a city.
Thank you for your consideration on these points.