The Real Estate Board of New York to The Committee on Housing and Buildings Regarding Housing Connect

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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 Committee on Housing and Buildings for the opportunity to provide testimony on Housing Connect and reforming the affordable housing lottery.

New York City is facing a housing crisis of historic proportions, and Housing Connect plays a critical role in ensuring that New Yorkers can access affordable housing. However, at a time when the need for affordable housing is more urgent than ever, the current structure and administration of Housing Connect create unnecessary barriers that delay lease-ups, waste valuable affordable housing resources, and contribute to prolonged vacancies.

REBNY appreciates the intent of Intros 1264, 1265, and 1266. Intro 1264 would require the Department of Housing Preservation and Development (HPD) to list previously occupied affordable housing units on the housing portal and limit consideration to applicants who apply through the portal. Intro 1265 would mandate that the housing portal provide enhanced updates to users – and their designated representatives – about their applications and matching units. Intro 1266 would establish in-person assistance for Housing Connect Applicants. While these measures are important, these bills fail to address the lottery system’s fundamental issues, and without more comprehensive reform, Housing Connect will continue to fall short of its goals.

The housing lottery process, which begins about six months before the expected occupancy of a building, is riddled with inefficiencies. According to the Mayor’s Management Report, approving an applicant takes an average of 202 days, and only 24% of lottery applicants are approved within three months. With a citywide vacancy rate of just 1.4%, and tens of thousands of New Yorkers applying for each affordable unit, extensive timelines in the lease-up process are unacceptable.

Similarly, the process of moving shelter residents into designated units is painfully slow. The Mayor’s Management Report found that in FY24, it took an average of 196 days to lease a homeless placement set-aside unit. When leasing a homeless placement unit, identified tenants often fail to attend scheduled unit tours, and owners receive no updates or alternative tenants from the City. As a result, units that owners could quickly lease to other qualified applicants instead remain empty, awaiting referrals that may never arrive. We urge the City to create clear and enforceable timelines for homeless referral units. When referrals fall through, owners should be permitted to promptly release units for general occupancy so they don’t remain empty.

Once a building is occupied, the process of re-renting vacant affordable units is even more inefficient. Therefore, we commend HPD for its recent changes to the Marketing Handbook, which governs the Housing Connect re-rental process. Now, a temporary waiver will permit owners and marketing agents

to find and qualify applicants for affordable units outside of the Housing Connect system. REBNY hopes this waiver will mitigate extensive delays in what typically is a slow process.

Equally important to address are the administrative challenges that arise during the lottery’s basic pre-marketing steps. Unit registration is a particular pain point for owners. REBNY members frequently submit completed property registrations to HPD, only to receive no acknowledgment of receipt despite repeated follow-ups. Absent HPD confirmation, projects are left in limbo and unable to proceed with marketing or lease-up. We urge HPD to improve responsiveness and tracking for critical pre-marketing steps like property registrations to ensure the timely delivery of much-needed affordable housing.

We look forward to working with the City and other stakeholders to implement these reforms and ensure affordable housing reaches New Yorkers who need it.

Thank you for considering these points.