This is What We Do: Affordable Housing Preservation: Building Operators Meeting
For the third event in our virtual series and fundraiser, This is What We Do, UNHP brought together via Zoom 31 individuals representing 12 multifamily building management and development organizations with over 15,000 units to discuss issues affecting affordable housing. The 12 organizations/businesses are committed to providing decent affordable housing to low-income tenants and own and/or manage Bronx multifamily rental buildings with affordable housing regulatory agreements.
UNHP, itself an affordable housing developer with ownership involvement in 27 Bronx properties, shared our experience and research on rising insurance and water and sewer costs. Bringing together Bronx housing operators to discuss the issues that affect the housing they oversee is What We Do to understand trends and emerging issues that jeopardize affordability. It is also What We Do to escalate these issues and seek to address the policies behind the issues. Below is a summary of the discussion around the following pressing issues; water and sewer, insurance, Covid Rent Relief, and NYC Rental Programs. To view the full presentation materials, click here. UNHP posted two blogs about the impact of Covid-19 on our affordable housing portfolio as part of our A Year Into Covid series.
Water and Sewer Programs and Rate Increases
UNHP’s Executive Director, Jim Buckley reported that the NYC Water Board approved a 2.76% increase effective this past July 1. Jim cautioned that we need to remember that the way water rates are set has not changed and double-digit rate increases were approved not too many years ago. The system has to pay its operating costs and debt service entirely from the rates. He also pointed out that the rental payment that the City can collect from the Water Board was waived this year; otherwise, the rate increase would have been higher. The threat of the rental payment always looms – and could mean steep increases especially if the City has fiscal problems. UNHP has issued two past reports on the rise in rates and their impact, Affordable Water for Affordable Housing (2015) and The Cost of Water (2017/18). On a positive note, Jim shared that The NYC Water Board increased the amount of money in the Multifamily Water Assistance Program from $10-12 million.
DEP has also hired a consultant to examine and make recommendations on revising the rate-setting formula for water and sewer services and established the Sustainable Rate Structure Advisory Group, which met for the first time the day before our meeting. The Group is described in the following link: https://www1.nyc.gov/site/dep/whats-new/sustainable-rate-structure-analysis.page; DEP is planning to propose a new rate structure in the next 3 years. DEP has indicated that they are willing to add more people to the working group and Jim was recommending that more people from the affordable housing community should join the group. The discussion that followed focused on a need to build greater awareness about the issue in the housing community and the need for greater transparency in the Multifamily Water Assistance Program. In the discussion, people were appreciative of the increased support for the Multifamily Water Assistance Program, but it was clear that the program needs more transparency.
Rise in Cost of Insurance and Decrease in Carriers
The discussion about rising insurance costs was informative and the scope of the problem was clearly overwhelming. UNHP quickly recapped the results of the survey of insurance pricing trends on 200 apartment buildings.
UNHP had shared the survey with city and state agencies and state legislators. When the state legislature passed legislation authorizing the Departments of Financial Services and Housing and Community Renewal to examine the problem of availability and cost, UNHP reached out to HCR and a meeting has been set for mid-July. The steady rise in price over the past three years does not seem to be changing in 2021. Workshop participants shared stories about the difficulty in obtaining insurance bids from more than one source, the deterioration of coverage, and the rising costs. One owner talked about unattainable umbrella insurance requirements, per apartment premiums exceeding $2,000 in one case and $3,000 in another. Based on the experience of managers of properties outside of the Bronx, it seems clear that the problem is not limited to the Bronx. Several managers pointed out that the actual cost is even higher than the premium charged; the amount of staff, consultant and legal time spent on deals has risen and the limited number of contractors who can bid on jobs due to the rising insurance requirements and costs drives up the actual costs of running and renovating affordable housing. UNHP will add other properties to the study that has already been done and will determine how we can work with the state to look more clearly at this problem.
Covid Rent Relief and Rental of Units Via City Programs
With regard to Emergency Rental Assistance or ERAP, the day of the meeting it was reported that no money has come through the Emergency Rental Assistance Program yet. Groups with social service arms have been doing outreach to tenants and community members who are eligible for relief. Managers talked about working with tenants to help people apply for back rent assistance. While a substantial number of people have applied, it is clear that not nearly enough tenants are willing or able to complete the lengthy and complex assistance application on their own. Many feel the problem relates to the difficulty people may have with gathering and uploading necessary documents to complete the application, while others think there is not nearly enough outreach explaining how much of a benefit this could be for tenants in arrears.
On rental issues, participants expressed frustration obtaining referrals from the HPD’s Homeless Placement Services for apartments designated for the homeless, as well as problems with navigating the New York City Housing Lottery to fill vacancies in fully occupied apartment buildings. Many groups are seeing higher than normal vacancy rates and feel that they are not able to get vacant units filled quickly enough through the City.
It seemed clear at the conclusion of the meeting that there is a real interest in people reconvening to keep exploring the expense and income issues that are confronting affordable housing operators. UNHP will reach out to participants to gather more information on issues like property insurance, water, leasing, and rental assistance and will convene a follow-up meeting later this summer.
Bringing together Bronx affordable-housing building operators to discuss issues that impede the ongoing preservation of these properties and then seeking to address these issues with policymakers is part of What We Do at UNHP. It is just one way we work towards our mission. You can support What We Do as a sponsor or donor by clicking on this link to our donate page. Thank you!