Rent Stabilized Housing in New York City: A Summary of Rent Guidelines Board Research, 1994 New York City Rent Guidelines Board Chairman Edward Hochman Public Members Hilda Blanco Barbara Gordon-Espejo Agustin Rivera Jane Stanicki Tenant Members Leslie Holmes Kenneth Rosenfeld Owner Members Joseph Forstadt Harold Lubell Rent Guidelines Board Staff Timothy Collins Executive Director Douglas Hillstrom Director of Research Edwin Fields Research Associate Jed Friedman Research Associate Andrew McLaughlin PIOC Survey Supervisor Leon Klein Office Manager Cecille Latty Public Information December, 1994 A Letter from the Chairman ....................................5 Acknowledgements..................................................11 New in 1994 ..............................................................13 Owner Income and Expense 1994 Price Indices of Operating Costs Introduction ......................................................16 Rent Stabilized Apartments: Summary ....................................................17 Elements of the Price Index.....................18 Changes in PIOC Components ...............20 Rent Stabilized Lofts........................................25 Rent Stabilized Hotels .....................................25 Projection of Price Index for 1995 Summary ....................................................26 Components...............................................26 1994 Income and Expense Study Introduction ......................................................30 Summary ...........................................................30 Local Law 63 .....................................................31 Methodology.....................................................32 Cross Sectional Study: Rents............................................................33 O&M Costs.................................................35 O&M Ratios ...............................................37 Distribution of O&M Costs .....................37 Distressed Properties................................38 Longitudinal Study: Rents............................................................39 O&M Costs.................................................39 O&M Ratios ...............................................41 1994 Rent Guidelines Board Mortgage Survey Summary ...........................................................42 Changes in the Mortgage Survey Sample and Questionnaire ......................42 Response to the Survey ...................................43 Characteristics of MortgageFinanced Properties .........................................46 Tax Arrears in Rent Stabilized Buildings, 1994 Summary ...........................................................48 Changes in Arrears, 1988-93 ...........................49 Arrears and Mortgage Debt............................51 Measuring the Effect of Mortgage Debt on Tax Arrears...................................................52 Mortgage Foreclosure Actions .......................53 Table of Contents Survey of External Conditions .......................54 Owner Survey Methodology and Response....................56 Owner and Building Characteristics......57 Building Income ........................................57 Debt .............................................................58 What is to be Done?..................................58 Rent Skewing Rent Skewing in Rent Stabilized Buildings, 1994 Introduction ......................................................62 Summary ...........................................................63 Literature Review.............................................63 Statistical Analysis ...........................................65 Tenant Income and Housing Affordability 1993 Housing and Vacancy Survey Report Summary ...........................................................70 Contract Rent ....................................................70 Rent Increases, 1991 to 1993 ....................71 Household Income...........................................74 Winners and Losers ..................................74 Geographical Differences.........................75 Poverty and Public Assistance................76 Housing Affordability ..............................76 Vacancies............................................................77 Affordability of Vacant Units ..................77 Tenant Income and Housing Affordability Summary ...........................................................79 Income and Rents.............................................81 Low Income Renters ........................................82 Housing Court Actions and Evictions ..........84 Housing Supply Housing Supply Report New Construction and Tax Abatements.......86 Housing Permits .......................................86 421-a ............................................................87 In Rem Housing and Tax Foreclosure............88 In Rem Housing ........................................88 Tax Foreclosure..........................................88 Residential Co-op and Condominium Activity ...................................89 3 Appendices Appendix A: Guidelines Adopted by the Board A.1 Apartments & Lofts .................................93 A.2 Hotel Units................................................93 Appendix B: 1994 Price Indices of Operating Costs B.1 PIOC Sample, Price Quotes per Spec, 1993 vs. 1994.................................95 B.2 Expenditure Weights, Price Relatives, Percent Changes and Standard Errors, All Apartments, 1994 ...................................96 B.3 Price Relatives by Building Type, All Apartments, 1994 ...................................97 B.4 Percentage Change in Real Estate Tax Sample by Borough and Source of Change, Apartments and Hotels, 1994............................................98 B.5 Tax Change by Borough and Community Board, Apartments, 1994 ......98 B.6 Expenditure Weights and Price Relatives, Lofts, 1994 ...................................99 B.7 Expenditure Weights, Price Relatives, Percent Changes and Standard Errors, All Hotels, 1994 ..........................................100 B.8 Price Relative by Hotel Type, 1994 ......101 B.9 Changes in the Price Index of Operating Costs, Expenditure Weights and Price Relatives, 1984-1994 .................102 Appendix C: 1994 Income & Expense Study C.1 Cross Sectional Income and Expense Study: Estimated Average Operating & Maintenance Costs by Building Size and Location, Structures Built Before 1947 ..................................................104 C.2 Cross Sectional Income and Expense Study: Estimated Average Operating & Maintenance Costs by Building Size and Location, Structures Built After 1946. ...................................................105 C.3 Cross Sectional Income and Expense Study: Estimated Average Rents and Income (1992) by Building Size and Location .......................................................106 C.4 Cross Sectional Sample, RPIE Filings ...107 4 Appendix D: Mortgage Financing D.1 Interest Rates for New and Refinanced Mortgages,1994......................108 D.2 Interest Rates for New Financing and Refinancing from Lending Institutions Responding in 1993 and 1994...................108 D.3 Loan Characteristics, 1994 ....................109 Appendix E: Tax Arrears E.1 Tax Arrearages, Buildings Three or More Quarters in Arrears, 1988-93 ..........109 Appendix F: 1993 Housing and Vacancy Survey F.1 Occupancy Status ....................................110 F.2 Economic Characteristics .......................112 F.3 Demographic Characteristics ................120 F.4 Housing/Neighborhood Quality Characteristics...............................124 Appendix G: Tenant Income and Housing Affordability G.1 Average Annual Unemployment Rates by Borough, 1988-93........................128 G.2 Composition of the Rent Regulated Housing Stock in New York City, Housing and Vacancy Survey, 1981,1987,1991 and 1993...............................................................128 G.3 Consumer Price Index for All Urban Consumers, New York-Northern New Jersey, 1988-94 ...................................129 G.4 Yearly Average Payroll Employment by Industry for NYC, 1988-94 .........................129 G.5 Composition of the Housing Stock in New York City, Housing and Vacancy Survey, 1981, 1987, 1991 and 1993 ...........130 Appendix H: Housing Supply H.1 Permits Issued for New Housing in New York City, 1988-93 .............................130 H.2 Units in Buildings Receiving Preliminary Certificates for 421-a Tax Abatements, 1989-93 ..................................131 H.3 HPD Vestings of Occupied Multiple Dwellings, FY'86-FY'94..............................131 H.4 Number of Residential Co-op and Condominium Plans Accepted for Filing by the Attorney General's Office, 1987-93 .............................................131 Letter from the Chairman Rent 6. The neighborhoods in which these units are 1994 saw New York City’s residential real estate 7. A malaise afflicts all efforts to systematically From the perspective of the Guidelines Board (RGB), the year ending 30 June market, at best, “hold its own.” At worst, various parts of that market are in crisis. As a result of located become increasingly blighted; and address this unfortunate situation. continuing trends, the RGB’s Spring, 1994 Factors Leading To Distressed Housing Conditions those actions within the RGB’s purview- however Of course, a brief note such as this cannot deliberations often were concerned with taking limited those actions may have been- to stem the address all the causes that have helped create this majority of RGB members believed that action at complexities of many of these factors and the lack tide of “distressed” housing. To state it bluntly, the many levels of government is needed to assist private housing units that, for a myriad of reasons, have become so uneconomical to operate that their private sector owners increasingly are abandoning them. no one: Such abandonment serves the interests of 1. Owners lose their investments; 2. Other potential owners are discouraged from committing their capital and other resources to such housing ventures. 3. The city itself loses much-needed revenues disturbing condition, especially given the of consensus about others. Having so stated that, the RGB nevertheless believes that among the core factors producing this crisis is that properties that produce little or no profit also tend to be occupied by tenants who have the least ability to pay more in rents (due to such factors as job losses or other income erosion). Adding to this unfortunate mix is that landlords of these properties have seen their already slim net operating incomes eroded over the years by increased taxes, water and sewer charges, the looming nightmare of lead poisoning when such units leave the tax rolls. and the costs of its abatement, etc. Preservation & Development often is forced and sewer costs and other such factors into care for these properties. increases, it currently is powerless to address the 4. The city’s Department of Housing to extend its already-strained resources to 5. Tenant’s are faced with the prospect of yet more “once-affordable” housing becoming unhabitable and unavailable. While the RGB can take these taxes, water account when determining the yearly rent underlying factors that result in these costs. Yet another cause that’s not limited to the distressed housing sector is growing rent 5 collection losses, which often more than offset the to pay rent of those with low incomes fell the increases. At its hearings, the RGB heard a host of stabilized intended beneficial effect of the RGB guideline owners claim that if they could just collect all the rents that lawfully were due, at least they would have a fighting chance of preventing their properties from being distressed. Especially in small buildings, though, the failure of even one or While the wealthiest quartile of rent households experienced average income losses of nearly 5% during this period, due to a loosening in the upper end of the market those tenants’ rents actually fell by an average of 4%. Conversely, real incomes among those in two tenants to pay their rent can make the the poorest quartile fell by 8.5%, while their rents abandonment. poorest neighborhoods collection losses rose, and difference between at least breaking even versus Failure of the New York City Housing Court System At this juncture, the RGB would be remiss if it failed to voice its concern that the New York increased by nearly 4%. As a result, in the city’s the owners of distressed properties slipped further into tax arrears. Consequently, absent extraordinary measures by other agencies whose actions affect the residential housing market, a sharp rise in tax foreclosures appears inevitable. Making the RGB’s job more difficult was City Housing Court purportedly has failed to the conflicting evidence concerning this income with the prompt and effective remedies that at there was a general decline in income resulting provide good faith, well-intentioned landlords least theoretically are available to such landlords. We voice no direct criticism at any particular party, nor do I, as chairman, believe it proper to detail the improvements that several board members noted they would hope to see instituted in that court system. Still, the RGB could not help but be struck by the widespread dissatisfaction with the current Housing Court realities as expressed by both tenants and landlords, but especially the latter. As with all such studies, there is a danger of distortions at the extreme that might produce inaccurate averages. decline. Some statistics seemed to indicate that from the city, regional and national recession of the past few years. Other statistics seemed to indicate that the middle and upper level income strata fared relatively well, while the lower income level was especially harder hit. If accurate, this latter explanation would help underscore the concerns about distressed housing. Just as there was much discussion among RGB members as to the impact of the SCRIE program (i.e. the “Senior Citizen Rent Increase Exemption”), so too were there suggestions that part of the solution might lie with a so-called “low Failing Tenant Income Nevertheless, while the average real incomes of all rent stabilized tenants declined somewhat in the early 1990s, the ability 6 furthest. income SCRIE.” The RGB realizes that such a program would require city and state coordination and approval, and certainly would involve significant financial costs to those governing authorities. Rather than endorsing such a concept at this time, the RGB instead hopes that the pertinent authorities would review the 22” situation: the RGB recently has approved only program for the truly indigent. approved for this year was not uncommon), feasibility and propriety of such a rent relief thereby depriving the operators of the funds to upgrade their facilities. (Other testimony, though, Single Room Occupancy (SRO) Conditions Perhaps no concern appeared so insolvable or elicited such heart-rending testimony as the issue of what generally is referred to as SRO housing. the most minimal increases (the 2% increase questioned whether these operators would invest greater increases in their buildings versus simply pocketing any additional monies.) The SRO situation is unfortunate for Frankly, the persons who rent these many reasons, not the least of which is that in an pitiable, and just as often, these SROs are all that for a number of those currently in distressed quarters often are among the most vulnerable and stand between a person’s sleeping in a relatively warm, dry room versus sleeping on a park bench or street grate. Unfortunately, the conditions in these facilities often are deplorable. (For instance, shortly after the RGB concluded its 1993-94 duties, the scandal and seizure of the Kenmore Hotel erupted.) Certainly, there are many honorable ideal situation SROs could provide suitable living housing. In many instances, these occupants would be quite content with a warm, safe single room with adequate toilet facilities. Unfortunately, what once was a staple of the New York City housing stock - respectable single room occupancy facilities - appear increasingly to be an endangered species. The declining number of SROs coupled persons who attempt to maintain SRO buildings, with the increasing number of homes (over the testimony regarding unsanitary conditions, rooms is a crisis situation that has been ignored for far too but the RGB heard considerable amounts of past ten years) seemingly would indicate that this that barely approached what most persons would long. buildings in which the physical safety of the “Middle Sector” Housing consider a minimal level of habitability, and tenants could not be guaranteed. Deplorably, it seems that a number of Having just described the worrisome universities have engaged in these practices in conditions of the lower end of the residential As shockingly, far from having “minimal” middle segment is that it roughly held its own. buildings in which they have housed students. rents, a good number of buildings apparently had rents that would have afforded the tenant other options. After paying these rents, many tenants housing market, the best that might be said for the Again, though, generalized statistics may lead to erroneous conclusions. Landlords with large numbers of units often had little money left to meet their other were better able to buffer themselves by obtaining In fairness to the operators, the RGB heard as a general rule, operating costs increased about needs. testimony that SROs essentially were in a “Catch- economically beneficial economies of scale. Still, 3.5% per year during the past three years, while 7 adjustments in legal rents have averaged about “neutral” criteria, such as changes in operating approved rent increases more or less offset rising enough, and the RGB is sensitive to both tenant 3%. Thus, while one might conclude that RGB- costs, it would appear that landlords in even this seemingly sound segment of the market were unable to accumulate any significant cash reserves, either to meet emergencies or else provide for improvement and expansion. This process is difficult and landlord complaints that the formula currently used either fails to reflect certain realities or otherwise factors them into the equation in an incomplete fashion. It also has frustrated RGB members that Thus, while these landlords have been they must set “across the board” rates, although all incentive for large amounts of private capital to apartment on Central Park South occupied by a able to “hold their own,” there appears to be little flow into new housing projects, except either at the “high rent” end or in conjunction with favorable tax laws to induce such new construction. One bright spot during the past few years is that the decline of interest rates allowed many prudent landlords to refinance their mortgages, thus lowering their costs significantly. Moreover, in this sector of the rental market landlords tend to face much lower losses arising from nonpayment by tenants. Unfortunately, recent interest rate increases by the federal reserve banks probably will soon foreclose this option for landlords who have not yet acted. The Increasing Difficulty of the RGB’s Duties The RGB’s mandated duties are to limit any undue effects on New York City’s private housing market resulting from the legislatively- determined housing shortage. That is, the RGB is charged with countering the raw market power that private owners otherwise would have in a market in which demand is deemed to be so much in excess of supply. The RGB performs this duty by making rent adjustments after reviewing a variety of 8 and financing costs. board members are painfully aware that a luxury high income tenant hardly is interchangeable with an apartment in a depressed part of this city which is occupied by a tenant whose income barely is above the poverty level. Thus, denied the ability to make “scalpel-like” incisions, the RGB instead must conduct this sensitive task with the blunt instrument of uniform guidelines. Moreover, while this task is difficult enough even in those housing sectors where landlords are relatively solvent and tenants are relatively stable and affluent, it is all but a nightmarish process as regards the lower income and outright distressed sectors. While the RGB must take a generalized approach in setting rates, which perforce must factor into the equation those statistics from the middle and upper rental levels, in fact these generalized conclusions often fail to address the actual problems in the lower end housing market. A few percentage points increase in rent simply can’t offset the effect of one or two tenants failing to pay rent in an apartment building of twenty units. Nor, conversely, can many of those other similarly situated tenants afford to pay much more than even the most “modest” of increase. Thus, RGB decisions risk being made as much on “politically sensitive” grounds as on good faith, objective, economic grounds. As was noted by the RGB’s former executive director, Timothy Collins: itself is an extraordinary measure over time may result in the program being used for purposes for which it was never intended. Thus, in sum, raising rents on all tenants to When rent collections are weak because of declining tenant incomes or various other social and institutional factors, the coordinates conventionally used to neutralize the effects of the housing shortage on rent levels lose precision. Discussions of where rents should turn then descend into rather murky debates about how to spread economic pain in an evenhanded or fair-minded way. In the short run, this may be a practical and unavoidable way to deal with exigent circumstances. After all, the primary purpose of appointing a Rent Board to study industry conditions and to adopt annual rent adjustments [as opposed to using a mechanical formula] is to inject a humane sense of flexibility into the process. In the long run, however, a regulatory process driven by aberrant pressures runs the risk of losing all sense of purpose and direction. immunize owners from the effects of a recession or, conversely, holding down rents to preserve affordability for tenants who are suffering under the same downturn, would recast the RGB into an agency intent on “social engineering” and reallocating wealth in a highly subjective and often arbitrary manner. Over time, such an approach could only undermine the coherence, usefulness and legitimacy of the system. The RGB’s multi-faceted mandate is to (a) protect tenants from any untoward rent increase resulting from the current housing shortage; (b) guarantee landlords a fair and equitable return on their investments and efforts; and (c) protect and promote New York City’s overall housing stock. While many would argue that these goals often are Summary in conflict, the Rent Guidelines Board nevertheless Those concerned with the RGB’s functions continually should bear two considerations in mind. First, the RGB was meant to counteract the effects of what the state legislature determined was and is a continuing acute housing shortage. Such regulations, however, were never meant to either shall endeavor, as it has in the past, to perform these duties to the best of its ability and in accordance with its legislative mandates. Final Note In closing, I would like to thank the RGB’s guarantee any owner a profit (i.e. thereby saving staff for another year of outstanding work. What as an adjunct to the social welfare programs (i.e. one of the premier housing policy resources and an incompetent owner from his own folly) or serve protecting poor tenants from economic forces that would be in effect, even if the housing shortage did not exist). Second, the rent regulations are themselves premised on exigent circumstances. Thus, as a corollary to the first point, piling yet more extraordinary measures on a program that once was an administrative backwater has become authorities in the city, state and nation. In particular, I wish to recognize Doug Hillstrom’s continuing leadership in producing the type of outstanding research and scholarship that is found throughout this volume. I also wish to express my gratitude to all eight other board members who have been so 9 gracious to me during my first year as chair. Although we’ve all not agreed on every policy or and staff I wish to extend our collective best the contributions of each to the practical work of our very able executive director and legal counsel, approach - nor were we expected to - I appreciate the board and to their efforts in stimulating those outside the RGB to reevaluate the city’s and state’s approach to housing policy. I can say without hyperbole their expertise, dedication, and sacrifice is greatly underappreciated by the general public. Edward S. Hochman, Esq. Chairman New York City Rent Guidelines Board 10 Finally, on behalf of the RGB’s members wishes and my personal gratitude to Tim Collins, who is departing after seven years of outstanding effort. His scholarship was exemplary, his integrity stood unchallenged, his devotion to the RGB’s mission was steadfast, and his service to the board members and especially the chair was outstanding. He will be sorely missed. Acknowledgements This volume summarizes all the major research projects - including the 1994 Price Index of Operating Costs (PIOC) - produced by the staff of the Rent Guidelines Board during the 1994 guideline “season.” We accept full responsibility for the analysis and findings contained herein. complete without mentioning temporary survey workers. our PIOC Many thanks for diligent efforts to: Shirley Alexander, Penny Z. Blake, Sonia Cumberbatch, Tyrone Riggins and Lavern Shakes. Apart from their work on the PIOC, the The PIOC is certainly the most resource RGB staff should be commended for several other index requires hundreds of hours of staff time to the highest response rate ever from bankers for our intensive project undertaken by the RGB. The complete; by the time the PIOC is wrapped up, the endurance of its participants is usually stretched to the limit. This year Andrew McLaughlin was in charge of the vendor and owner surveys, which are critical elements of the PIOC. Andrew did an exceptional job organizing materials for the efforts. As a new staff member, Ted Fields coaxed mortgage survey. In addition, Ted's piece on rent skewing in stabilized housing clearly outlined a very complicated issue and provided important new insights. Jed Friedman's work on the 1994 Tax Arrears Study was exemplary and further clarified this very important issue. The RGB also benefitted greatly from the survey and supervising our temporary work assistance of several city and state agencies. The than ever and the productivity of the survey staff files used in computing changes in real estate taxes crew. The quality of the data gathered was better reached an all time high. As usual, Speedwell Inc. worked with RGB staff to compute the tax and water/sewer components of the price index. They also reviewed the final draft of the PIOC. Key contributions were also made by Speedwell to our study of tax arrears in rent stabilized housing. Everyone on the RGB research staff contributed to the PIOC in some way. Jed Friedman calculated the fuel oil cost component. Andrew McLaughlin gathered data on changes in utilities and labor costs. Ted Fields was primarily responsible for our PIOC projection for 1995. Finally, no acknowledgements would be Department of Finance (DOF) helped to prepare for the PIOC. For the fifth consecutive year, DOF also supplied the RGB with crucial data from owner income and expense (I&E) filings. Alisa Avruch produced much of this information, often under tight time constraints. We would like to thank Julie Walpert for acting as liaison with the DOF on these and other matters and Doug Layne for help with other Finance Department issues. James Rheingrover provided updated improved figures on real estate sales prices. Commissioner Department of Wright Housing and Preservation and the and Development (HPD) helped with several projects, including provision of data on tax abatements and 11 in rem housing. A number of other agencies provided with a wide variety of additional Department of City Planning supplied the RGB report The Impact of Metered Billing for Water and supported this year’s research agenda. The with important data on real estate tax arrearages. Sewer on Multifamily Housing in New York, and New York State Attorney General’s Office. The building owners, tenants, housing scholars, Co-op conversion data was obtained from the New York State Public Service Commission and the New York City Water Board and Department of Environmental Protection also provided information and relevant data for a number of this year’s research projects. Finally, two disclaimers must be made regarding this report. First, this volume includes only RGB staff research. Timothy Collins Executive Director 12 sources of information, including Speedwell Inc.’s The Board was also written submissions and oral testimony from public officials and other interested parties. In addition, although this report does include a summary of the Board’s guidelines for 1994-95, it is not intended as an explanation of these guidelines. Those who are interested in this issue should consult the Board’s explanatory statements which are issued in conjunction with this year’s rent orders. Douglas Hillstrom Director of Research New in 1994 This is the sixth annual compilation of imminent recovery in the troubled low rent stock. Although a fair amount of the material in Rent worsen in the rent stabilized sector in 1993. Both research from the Rent Guidelines Board. Stabilized Housing in New York City remains the same from year to year (e.g. the Price Index of Operating Costs for Rent Stabilized Apartments), much of the research is new or somehow improved each season. We think it is useful to point out a few of this year's highlights, as well as new material in the appendices which might be useful for your own studies. Last year the RGB completed its first comprehensive assessment of tax arrears in rent stabilized housing. Using a variety of data sources The report found that tax arrears continued to the number of buildings in arrears and the mean level of arrears increased substantially. For buildings that were behind on tax payments in both 1992 and 1993, the average amount owed increased by ONE-THIRD. Most troubling of all, the report found a sharp reduction in the willingness of landlords to redeem their properties. As tax arrears have mounted, fewer landlords have the means or inclination to take back their properties from the city. Last year's report on the New York City - including information on tax arrears, registered Housing and Vacancy Survey (The NYC Housing study presented a sobering picture. 1991)) was a rather positive assessment of the rents, and landlord income and expense data - the The and Vacancy Survey: A Ten Year Retrospective (1981- magnitude of tax delinquency was increasing decade. Despite the litany of complaints the Rent to avoid foreclosure by the city. landlords and tenants, the HVS data showed that sharply and many owners had failed to take action Although the report documented serious problems in the low rent housing stock, it was unclear at that time whether conditions had stabilized or would continue to worsen. There were some positive signs. Landlord redemption of properties was not significantly lower than in previous years. There was hope the economy was beginning to strengthen. Finally, it appeared that Guidelines Board hears each year from both BOTH groups gained during the eighties. Tenant incomes rose faster than inflation and they had more income to spend on non-housing goods by the end of the decade. Owners' rents rose substantially faster than the rate of inflation and also outpaced the RGB's Price Index of Operating Costs. But what a difference two years can make. bank foreclosure proceedings would restore the Our report comparing data from the 1991 and 1993 had been part of the speculative fever of the recession can undo the progress of a decade. In the economic viability of many of the properties which eighties. Our report Tax Arrears in Rent Stabilized Buildings, 1994 (p. 48) dashed all hope of an Housing and Vacancy Surveys shows how a deep 1993 Housing and Vacancy Survey Report, (p. 70) we found that the period 1991 to 1993 was kind to neither tenant nor landlord. The deepening 13 recession made it impossible for many landlords to of the existing literature uncovered theoretical and stabilized apartments allowed. On the tenant side and unregulated housing markets. Statistical raise rents as fast as the guidelines for rent of the equation, income plummeted 10% in real terms and the median rent-to-income ratio increased substantially, from 26% in 1991 to 28% in 1993. The report also found that income inequality, which increased greatly in the eighties, continued to grow from 1991 to 1993. Apart from adjusting rents from year to analysis of 1993 data from two hundred and twenty rent stabilized buildings as well as the cross-sectional data set of the 1991 HVS revealed statistically significant skewing of rents for comparable apartments in both stabilized and unregulated rental buildings within the city. The study also found similar average year, the Rent Guidelines Board also bears some annual "length of occupancy" discounts (one common criticism of rent regulation is that it the regulated and unregulated sectors, but responsibility for ensuring that rents are "fair." A increases rent inequities among tenants by promoting "rent skewing", in which identical apartments become differently priced over time due to variations in their turnover rates. Since the Board's policies (e.g. the vacancy allowance) often influence turnover rates, an understanding of the rent skewing issue is crucial. Rent Skewing in Stabilized Housing (p.62) examines the issue in detail. The report includes an examination of the theoretical literature as well as some new empirical work by RGB staff. Review 14 empirical evidence of skewing in both regulated measure of skewing) for sitting tenants in both generally higher average total discounts for tenants in stabilized units than for those in unregulated rentals. This was due to the tendency of tenants to occupy their stabilized dwellings for longer periods than unregulated units. Thus, New York's rent stabilization system encourages stabilized tenants to stay in their units longer than renters in the unregulated sector, leading to higher total levels of rent skewing in stabilized apartments than in unregulated ones. ~23 2:85 .8530 1994 Price Indices of Operating Costs Owner Income and Expense P rior to establishing its annual guidelines, related studies in the 80’s. However, for a variety obligated by law to examine operating substantive changes in the PIOC market basket, the Rent Guidelines Board (RGB) is and maintenance costs that are incurred by owners of stabilized buildings. In the early 70’s, the RGB relied heavily on its Price Index of methodology, or the way the study was administered. Beginning with the 1991 PIOC, many Operating Costs for Rent Stabilized Apartment changes have been made to facilitate the data charges and costs. However, since the late 70’s, PIOC price data. Houses (PIOC) to measure changes in these collection process and to insure the quality of Staff has reorganized and some critics as well as Rent Guidelines Board computerized the PIOC vendor database, determine the profitability of stabilized housing and completely redesigned the owner survey members felt that additional data was needed to beyond an annual price survey. The PIOC measures the price change in a market basket of goods and services which are used in the operation and maintenance of updated the mailing list for the owner survey, mailing materials. In addition, price quotes for fuel oil are gathered on a monthly basis rather than once a year. Following completion of the 1993 PIOC, The original PIOC further efforts have been made to improve the devised by the U.S. Bureau of Labor Statistics of the PIOC. These efforts and improvements stabilized buildings. expenditure weights and market basket were (BLS) which was retained by the RGB as the PIOC contractor from 1970 to 1981. From 1982 to 1990, the PIOC was prepared by private consulting firms. In 1991, the RGB staff’s growing expertise and familiarity made it possible to move the PIOC “in house.” This is the fourth year that the RGB staff has produced quality of data collection and our understanding allowed us to hire fewer data collectors for a shorter period of time each year since the PIOC was brought "in house". In 1991 twelve temps were hired for a ten week period while this year half as many data collectors worked six weeks to complete the survey. Since 1989, RGB staff has completed a the PIOC. substantial amount of about the accuracy of the PIOC methodology in topics of concern have been the reliability of the In order to address the ongoing concerns estimating cost changes, the RGB commissioned 16 of reasons, these studies did not lead to the PIOC contractors to undertake various PIOC- research designed to evaluate the accuracy of the PIOC. The major 1982 expenditure study (which re-weighted the PIOC components), the overall accuracy of the 1994 Price Indices of Operating Costs PIOC, and the precision of various PIOC components. The availability of landlord income and expense (I&E) information from the Department of Finance made it possible to examine the reliability of the PIOC expenditure weights. In general, the I&E information confirmed that the PIOC weights are fairly accurate. In recent years staff has also been able to compare actual increases in costs (Finance I&E data) with changes in the PIOC. Last year we found that the PIOC measurement (5.5%) was higher than the I&E data would suggest (3.4%). This year's comparison found a 4.2% increase in both I&E costs and in the PIOC from 1991-1992. This comparison further supports the accuracy of the Price Index. An effort to gauge the accuracy of the PIOC by comparing its findings with actual expense data controversy will continue. concerning the While accuracy the and legitimacy of the PIOC may never be fully resolved, efforts will be made to improve the PIOC on both an administrative and technical basis. Rent Stabilized Apartments Summary April, 1993 to April, 1994 Taxes ............................................................2.3% Labor Costs.................................................4.3% Utilities Costs .............................................2.1% Fuel Costs ..................................................-0.5% Contractor Services ...................................0.9% Administrative Costs ................................3.7% Insurance Costs..........................................0.8% Parts & Supplies ........................................1.0% Replacement Costs ....................................1.6% Overall ........................................................2.0% Declining worldwide oil prices, falling property tax assessments, and the inability of contractors to raise prices were some of the manifestations of economic weakness or lack of inflationary pressures which are reflected in this year's PIOC. Last year the tax rate rose a scant two- tenths of a percent, and since fully two-thirds of stabilized buildings had reached their maximum assessments, values did not increase much either, resulting in a low tax increase (3.1%). This year tax assessments actually decreased but an increase in the tax rate still resulted in a property tax increase of 2.3%. The overall increase in the Price Index of Operating Costs for Rent Stabilized Apartment Houses in New York City (PIOC) between April 1993 and April 1994 was 2.0%, the lowest increase since 1978. Change in Components of the Price Index of Operating Costs for Rent Stabilized Apartments, In last year’s PIOC projection we Labor costs were up 4.3%, a smaller increase than last year (5.6%). The rate of increase in labor costs has been extremely consistent during the past eight years, ranging from 4.3% to 5.7% . As we noted in the 1991 PIOC report, predicted a low Price Index "due to smaller Contractor Services and Administrative Costs are As it turns out, eight out of the nine Price Index on the strength of the local economy. Although economic conditions in New York City have increases in the Taxes and Utilities components." components either remained the same or increased at a slower rate than last year's PIOC. largely labor-based and depend to a great extent improved slightly, inflationary pressures are still 17 Owner Income and Expense firmly in check. As a result, increases in the Contractor Services and Administrative Costs components (0.9% and 3.7% respectively) are among the lowest in the last ten years. In last year ’s fuel oil projection we assumed a "slight upward production capacity, gradually increasing demand for petroleum, and close to normal weather conditions.” The net effect was to have been a 5.7% increase in fuel prices. Our projection was undone by weak economic conditions worldwide and declining crude oil prices. declined by 0.5%. As a result, fuel oil prices The utilities relative rose moderately, mainly due to the Water Board's freeze on water and sewer rates which was effective during the year. Since water and sewer charges now constitute 56% of the utilities component, the overall increase in utilities was only 2.1%. Unlike last year, changes in insurance costs were lower than the overall PIOC increase. Increases in the Parts & Supplies and Replacement Cost components, which have been fairly consistent (and low) over the past nine was contacted by an interviewer to verify the information and to obtain additional information if necessary. All of the price quotes of the owner/managing agents were confirmed by calling the insurance and management companies and non-union employees. The sample frame for the owner survey included approximately 39,000 stabilized buildings which registered with DHCR in 1991. A stratified sampling scheme was used to choose about 6700 addresses from this pool for the owner mailing - about 500 more than in 1993. The number of buildings chosen in each borough was proportional to the concentration of stabilized buildings in that borough. Nearly 13% of the 6700 surveys mailed out were returned to the RGB. A total of 538 of these contained information which was used. The number of verified price quotes in 1993 and 1994 for the owner survey is shown in Appendix B.1 (page 95). Fuel Oil Vendor Survey Fuel price information has been gathered years, continued to follow the same pattern. on a monthly or bi-monthly basis for the past two 1% while Replacement Costs were up 1.6%. in touch with fuel vendors and to gather the data on Prices for Parts and Supplies increased a meager Elements of the Price Index Owner Survey The owner survey gathers information on management fees, insurance, and non-union years. A monthly survey makes it possible to keep a consistent basis (i.e. on the same day of the month for each vendor). Calling vendors each month minimizes the likelihood of misreporting and also reduces the reporting burden for the companies which don’t care to look up a year’s worth of prices. Finally, the monthly survey shifts some staff work out of the very busy Spring period. Only a few vendors declined to participate labor from building managers and owners. on a monthly basis. Several of these did agree to the purpose of the PIOC, were mailed to the number of fuel quotes gathered this year was Survey forms, accompanied by a letter describing owners or managing agents of stabilized 18 owner/manager buildings. If the survey form was returned, the provide two year’s worth of data in April 1994. The comparable to last year and is contained in Appendix B.1. 1994 Price Indices of Operating Costs Tax Computations management and attorney fees), parts & The list of buildings used to compute the change in taxes included all properties which registered at least once with DHCR between 1984 and 1989. As was the case last year, a list of in rem buildings was obtained from the Department of Housing Preservation and Development. These buildings had been vested by the city and were not, in effect, privately managed rental buildings. They were excluded from the tax analysis. Information on assessed value, tax supplies, (e.g. mops, toilet seats) replacement costs (e.g. refrigerators). and As in prior years, an effort was made to update the vendor database by adding new vendors and deleting those who no longer carry the products in question. Vendor quotes were obtained in person and over the telephone. The method used depended on the particular product or service being priced (e.g. all painters were contacted by telephone due to the difficulty of meeting with them during business hours). The procedures used for gathering price exemptions, and tax abatements was obtained quotes were unchanged from prior years. The approximately 31,000 stabilized buildings. This 1993. from the Department of Finance for the data was used to compute a tax bill for each stabilized building in FY '93 and FY '94. Each building's tax bill was "weighted" based on the number of stabilized units in the building. The change computed for the PIOC is simply the percentage increase in aggregate taxes levied number of price quotes was about the same as in For a detailed description of the items priced and the number of price quotations obtained for each item, refer to Appendix B.1. Other Items In addition to the items previously from FY '93 to FY '94. discussed, Register (OBR) was used to "check" the tax They are: As in prior years, the Open Balance computations. The OBR consists of actual bills and payments by landlords. There was no significant difference between the traditional method of computing the tax increase and the OBR method. The Vendor Survey is used to gather price quotes for contractor services (e.g. administrative number of other pieces of information are needed to complete the PIOC. Union contract and benefit information Social security rates Unemployment insurance rates Heating degree days Utility rate schedules Vendor Survey painting), a costs (e.g. These items are used in computing some of the labor components, changes in utility costs for electricity, gas, steam, and telephone, and the cost-weighted change in fuel prices. 19 Owner Income and Expense The chart below disaggregates the Changes in PIOC Components increase in real estate taxes into changes in billable assessments, and the tax rate, tax Taxes The tax component is based entirely on real estate taxes. The 2.3% change in taxes is estimated by comparing the aggregate taxes levied on rent exemptions, and abatements. Changes in assessments and the tax rate usually have the biggest impact on real estate taxes. The influence of changes in exemptions and abatements is often negligible. We have grouped these with the tax rate for purposes of illustration. Most of the overall tax increase this year stabilized apartment houses in FY 1993 and FY can be attributed to the increase in the tax rate computation compares to last year, see the earlier exemptions also played a role. This is in contrast 1994 (For additional detail on how the tax section on “Elements of the PIOC”). The tax data was obtained from the Department of Finance. Taxes levied on rent stabilized apartments (4.6%), although expiring abatements and to last year where increasing assessments contributed the lion's share of the tax increase. This year the change in billable increased by 2.3%, the lowest rate of increase assessments was -4.7%, the first drop in valuation in the tax rate; property assessments actually highly variable by area: assessments in lower since 1984. The increase was largely due to a hike dropped. since fiscal 1983. The change in assessments was Manhattan decreased by 6.2% while increasing in Components of Tax Change, 1988-94 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% 1988 1989 Assessments 20 1990 1991 1992 1993 1994 Tax Rate, Abatements, Exemptions, Interaction Note: Overall change in tax component by year: 1988 (8.1%), 1989 (15.8%), 1990 (12.0%), 1991 (12.8%), 1992 (11.0%), 1993 (3.1%), and 1994 (2.3%) Source: Price Index of Operating Costs, 1988-1994 1994 Price Indices of Operating Costs upper Manhattan by 0.6%. Assessments also increased in the Bronx (1.2%) but decreased in Brooklyn, Queens and Staten Island by 1.4%, 6.0% and 8.3% respectively. This variation in the change in The rate of increase in fringes was down sharply this year - to 5.2%. Utilities assessments by borough carried over to changes in the overall tax cost. Queens and Staten Island actually had lower tax bills this year than last year - their taxes dropped by 0.5% and 2.0% respectively. Lower Manhattan experienced a tax increase of 0.8% while taxes on buildings in upper Manhattan rose 7.9%. Brooklyn and the Bronx saw tax increases of 6.4% and 8.8%. Interestingly, areas with the highest tax increases, upper Manhattan and the Bronx, also were least affected by changes in exemptions, implying that After a year in which the increase for the utility component 2.1% of the PIOC increased substantially (12.7%) there was a very moderate increase this year of 2.1%. Last year all expenses, except for telephone costs, showed double-digit price increases while this year only gas costs reached the double-digits. The utilities component consists primarily of electricity, natural gas, and water & fewer exemptions have been expiring there than sewer charges. Telephone and steam costs are a Labor Costs measured using the PIOC specifications (i.e. the in the city as a whole. 4.3% The labor component is based on several measures of labor costs, including union contracts (wages and benefits), non-union wage increases as measured by the owner survey, and changes in social security and unemployment insurance. The overall increase in labor costs this year was 4.3%, falling below five percent for the first time since 1976. The 1994 labor component is the lowest increase in 18 years, and may be a harbinger of even lower increases in the future if the recent 32 B-J contract is an indicator of future trends. There has been some variation in the sub- components which make up the labor component. In recent years the wage portion of labor costs has typically lagged behind benefits. Last year, for instance, fringe benefits rose 16%. small part of the utilities index. In the case of most utility components, changes in price are quantity of electricity, steam etc. being purchased) and the changes in rate schedules. Water/Sewer costs are based on actual billings from the Department of Finance. In previous years utility information was generally obtained by calling particular companies (e.g. Brooklyn Union Gas) or the Public Service Commission. Staff has continued the effort made last year to track the change in utilities throughout the year rather than exclusively during the busy months of the PIOC survey. During the past twelve months a concerted effort was made to document all aspects of the utilities component by requesting detailed rate schedules and definitions of the terms used by rate regulators. Some minor changes were made in the calculation of the utilities sub-components as a result. The RGB is now in a much better position to track changes made by regulators and to project utility rate increases. 21 Owner Income and Expense Due to the Water Board's freeze of water and sewage rates for 1994 there was only a slight increase this year of 1.0%. Over the past several years water and sewer charges had risen so quickly they had a large impact on the utilities component resulting in high increases. With the lack of such a large increase in water and sewage year’s heating season, but most of the increase can be attributed to rate increases and changes in the fuel adjustment factor. Fuel Oil -0.5% costs this year the overall rise in the utilities component is the lowest since 1991. of three types of fuel oil - #2, #4, and #6. The PIOC includes Electricity costs showed a decrease this year, down about 8.0%. Electricity costs have The fuel oil component measures changes in the price a different weight for each of traditionally been measured on an April-to-April the fuel grades which reflects the percentage of case of fuel oil and gas). fuel oil. basis rather than a cost-weighted basis (as in the Gas costs increased considerably this year, rising about 15%. Gas, like fuel oil, is measured largely on a “cost-weighted” basis rent stabilized units using the particular type of In the current year’s PIOC, #6 oil accounts for half of the fuel oil component while the other two grades make up roughly 25% each. To calculate changes in fuel oil costs staff which takes both price and heating degree days gathers monthly price data from fuel oil vendors gas costs was due to colder weather during this The number of degree days is a measure of into consideration. A small part of the increase in and weights the data using a degree day formula. Percentage Difference in the Cumulative Fuel Oil Bill, 1993-94 as a Percent of 1992-93 2% 1% 0% -1% -2% As of Dec ember 199 3 fu oil costs w ere 4% low el er than the p revious ye ar. -3% -4% -5% May Jun Jul Aug Sep Oct Nov Dec Jan Source: Fuel Vendor Survey, Price Index Of Operating Costs, 1994. National Weather Service. 22 Feb Mar Apr 1994 Price Indices of Operating Costs heating requirements. history of the PIOC. previous year, mostly due to an unusually cold first apparent in the results of the 1991 PIOC, were lower fuel prices for much of 1993. As a a recovery period. This year was decidedly colder than the January. Offsetting the colder weather, however, result, fuel prices actually dropped by 0.5%. In fact, a demand driven increase in fuel prices in February, immediately after the coldest spell of the winter, dampened the drop in fuel prices for the year. Without the February price rise, fuel costs would have been 3.2% lower than the previous year. The chart on the previous page illustrates the effects of the severe cold and fuel price rise by tracking the difference in the The impact of the recession, which was continues even though we are considered to be in Continuing pressure on contractors to keep their customers has forced them to maintain or reduce their prices. In this year’s survey about four-fifths of the painters reported that their prices either remained the same or even decreased, mainly due to lack of business. As a result, the increase in repainting costs was less than one percent, almost one percent less than last year. Plumbers, like painters, struggled to cumulative fuel bills between last year and this maintain prices for their services. As was the were 4.0% lower than the previous year as of showed an increase but the change was slight - year. As the chart shows, landlords' fuel bills December. However, cold weather and higher prices drove prices up, before finishing the year with a .5% decrease. This decrease in price was experienced by users of #2 and #4 fuel oil; #6 fuel oil users experienced a price increase. Among the various grades of fuel oil, the changes in price were: #6, case last year both PIOC plumbing "specs" 1.1% and 1.6% respectively. The greatest changes in the Contractor Services component were seen in the area of elevator maintenance. While there were moderate price increases for elevator maintenance in the 1993 PIOC, each of the three elevator "specs" showed decreases in 1994. Old elevators were replaced with new +0.9%, #4, -2.1%, and #2, -1.9%. As is usually the units resulting in fewer repairs which in turn greater than for the other grades. This is probably the lack of substantial price hikes in these areas, case, the price swing for #6 fuel oil was somewhat due to the smaller number of price quotes for #6 oil and greater price volatility for this grade. Contractor Services 0.9% the recent trend of low increases in the Contractor Services component has continued. Administrative Costs The Contractor Services component is composed of sixteen have lowered monthly service contracts. Due to items, important repainting of and the which most are plumbing 3.7% The administrative costs component consists mainly of management company fees and attorney and accountant services. Advertising fees, repairs. The rate of increase in the Contractor along with the cost of certain office supplies, are 0.9% this year. This is the lowest increase in the a minimal effect on the overall increase. Since Services component fell from 2.5% last year to also a part of this component but they have only 23 Owner Income and Expense 1991 we have seen increases of about two to three PIOC survey team was exceptionally successful costs was somewhat higher, 3.7%. this was due to their diligence, but some of the percent. This year's increase in administrative Management fee quotes, which make up nearly two-thirds of the administrative costs component, are obtained from owners and are verified by calling management companies. The data is used only if the management company has no equity interest in the apartment building. The number of management fee quotes was similar to the number obtained in the 1993 PIOC. This year’s increase of 3.9% in management fees is lower than the average increase over the last five years (5.3%). Fee quotations were obtained from accountants and attorneys based on specifications in the PIOC. Unlike last year, these costs have increased faster than the past year's increase in the CPI. The 1994 PIOC saw a rise in attorney fees of 3.3% (an increase over last year's in gathering insurance quotes this year. In part credit can be attributed to changes in survey methods made last year. This year a new variable was added to the insurance section of the Owner Survey in order to determine if lead paint coverage was being removed from insurance policies. Only 13 respondents indicated that the lead paint coverage was indeed removed from an owner's policy. As a result, this new variable had little effect on the insurance cost component. Recent changes in insurance have been rather moderate, ranging from -.6% in 1989 to 4.4% in 1991. This year's increase of 0.8% is quite typical. Parts and Supplies 2%), while accountant fees increased 4.2%. Insurance Cost 0.8% and generally low since 1983. This year prices showed the same rise as last year- only 1%. Information on insurance costs and coverage (i.e. Given the low weight of the parts and supplies change) was obtained through supplies had no significant impact on the overall deductible, value, coverage the owner survey. The survey staff used a policy number and the name of a contact person provided by the management company or building owner to confirm the 1993 and 1994 price quotes with the insurance carrier. To insure that the PIOC accurately measures the effect of changes in the price of insurance coverage, the influence of changes in coverage is statistically removed in the computation of the component in the PIOC (less than 3%) and the small price increase in this component, parts and PIOC increase this year. Replacement Costs 1.6% The replacement costs index is less significant than the Parts and Supplies component, accounting for slightly more than 1% of the price index. insurance component. Last year's increase, although it was only 4.2%, were obtained, compared to 443 in 1993. The replacement costs component continues a A total of 523 verified insurance quotes 24 1.0% Increases in this component have been fairly consistent was the highest since 1982. This year's 1994 Price Indices of Operating Costs previous series of low increases. The slight rise lofts than apartments since labor costs are not increase in the PIOC. combined resulted in the increase of 2.2%. of 1.6% had very little impact on the overall Rent Stabilized Lofts Rent Stabilized Hotels The overall increase in the loft price index was 2.2%, only slightly more than the increase in the apartment index (see table below). Even though the overall increase in the loft price index was very similar to the increase in the apartment index, some of the weights used in the loft index are quite different. Attorney fees have a weight of about 1% in the apartment PIOC, but comprise 11% of the loft index. Since legal fees rose 3.3%, the effect was to increase the loft index relative to the apartment index. However other factors worked in the opposite direction. Fuel costs dropped more for lofts than for apartments since fewer lofts use #6 fuel oil. weighted as heavily for lofts. All of these factors The 4.6% increase in labor costs had less of an impact on Change in Components of the Price Index of Operating Costs for Rent Stabilized Lofts, April, 1993 to April, 1994 Taxes ...........................................................2.3% Labor Costs ................................................4.6% Utilities Costs ............................................3.0% Fuel Costs .................................................-1.5% Contractor Services...................................0.9% Administrative Costs, legal.....................3.3% Administrative Costs, other ....................3.6% Insurance Costs .........................................0.8% Parts & Supplies........................................1.0% Replacement Costs ...................................1.6% Overall .......................................................2.2% The hotel price index methodology was first developed by the consulting firm USR&E based on its findings in the Report on the Analysis for Expenditure Data for the 1985 Price Index for Hotels. It includes separate indices for each of the three categories of hotels (due to their dissimilar operating cost profiles) and an index for all hotels. The overall increase for hotels was 1.2%, somewhat less than the increase for apartments. The changes for the various building types were: rooming houses 2.7%, SROs 2.1%, and hotels 0.4%. This disparity among building types is largely due to different tax changes. Taxes for rooming houses increased by 6.1% and SROs by Change in Components of the Price Index of Operating Costs for Rent Stabilized Hotels, April, 1993 to April, 1994 Taxes ..........................................................-0.5% Labor Costs ................................................4.6% Utilities Costs ............................................0.1% Fuel Costs .................................................-1.1% Contractor Services...................................2.7% Administrative Costs, ..............................3.6% Insurance Costs .........................................0.8% Parts & Supplies........................................1.0% Replacement Costs ..................................-1.5% Overall .......................................................1.2% 25 Owner Income and Expense 1.0% while taxes for hotels decreased by 4.7%. Utilities costs also went down for hotels (-1.0%) while increasing for rooming houses (3.1%) and SROs (1.6%). Differing tax costs were most responsible for the smaller change in the hotel index than the Summary Overall, the PIOC is expected to grow by apartment index. The tax relative was computed roughly 3.4% between 1994 and 1995. Projected for the 1991 HVS, as was the case for the past two shown alongside actual increases observed from using a list of hotel buildings compiled by HPD years. This year taxes actually decreased by 0.5% while apartments experienced a 2.3% increase in taxes. This difference is due to a drop in the billable assessed value for hotels (-2.9%) and a smaller increase in the tax rate (+2.3%). changes in the index's separate components are 1993 to 1994 in the chart on page 24. Taxes +3.1% Real estate taxes have steadily grown Assessments for hotels decreased 7.3% from the into the most important single cost component in 1.3%. Rooming house assessments increased index. From 1985 to 1992, growth in taxes tended previous year and SRO assessments decreased 3.8% in the same period. The increase in labor costs was 4.6%, somewhat more than for apartments. This increase was driven by large increases in unemployment and social security insurance the PIOC, comprising over one quarter of the cost to exceed overall expansion in the PIOC. Declining tax assessments and fairly stable tax rates have reversed this trend over the past two years. Although New York remains committed which are afforded more weight for hotels than to keeping its total real estate tax levy stable over Fuel costs decreased by 1.1%, a greater the distribution of the tax burden among various apartments. decrease than for apartments. This is due to the fact that rooming houses use #2 fuel oil rather than #4 or #6. The increase in utilities costs was very slight (0.1%). Substantial increases in natural gas costs were offset by reductions in the price of electricity, resulting in nearly unchanged costs. Contractor services rose faster in hotels, the coming year, changes are expected to occur in types of property in the city. In particular, the share of the levy to be derived from Class Two properties (which encompasses rent stabilized buildings) is expected by to increase by 5% from 1994 to 1995. This increase, in turn, should cause the tax rate for Class Two buildings to grow by about 5% next year. Class Two property includes co-ops and largely due to an 8% increase in linen and condominiums as well as apartments. Within the decreased by 1.5% because of a drop in the price classified as either "rental buildings" or "4-10 laundry service. Replacement costs actually of dressers, mattresses, and box springs. Administrative costs, insurance, and parts and supplies rose at about the same rate for both hotels and apartments. 26 1994-95 PIOC Projection Class Two category, rent stabilized dwellings are family buildings". Based on the preliminary tax roll, the Finance Department forecasts billable assessments for rental buildings to decrease by 1.7%, while billables for 4-10 family buildings are 1994 Price Indices of Operating Costs expected to increase by 3.5%. Overall, billable benefits was projected from average increases predominantly classified as "rental" buildings, In a similar vein, projected increases in assessments for stabilized buildings, which are should decrease by 1.1% from 1994 to 1995. In the past, the Finance Department's preliminary tax roll, which is an estimate, has tended to be higher than the final tax roll, upon which taxes are actually calculated. Accurate tax projections must adjust for this "gap", which amounted to 1.1% for stabilized properties in 1993. Assuming that the discrepancy between the observed over the past three years. "Administrative Costs" (3.4%) and the price of "Contractor Services" (1.9%) were derived from average growth rates witnessed in components during the past three years. both Fuel + 10% The cost of fuel oil depends heavily on preliminary and final tax roll is also 1.1% in FY volatile political and economic variables as well billables, combined with the projected 5% reliably predicted. Given these drawbacks (and '95, billables should decline 2.2%. This decline in increase in the Class Two tax rate, should produce a 3.1% rise in taxes for rent stabilized buildings in the coming year. (Labor Costs +4.3%, Administrative Costs +3.4% and Contractor Services +1.9%) Labor costs comprise the bulk of these three components. "Contractor Services" primarily concerns the work of plumbers and painters while "Labor Costs" are mainly associated with the wages and benefits of building maintenance workers (e.g. superintendents, porters, etc). Costs" largely barring unforeseen wars or natural disasters) fuel oil prices in New York City from 1994 to 1995 should be propelled upward by a combination of stable global production, a colder-than-normal Labor-Based Components "Administrative as on short-term weather patterns that cannot be consists management, legal and accounting fees. of Among the three components listed above, "Labor Costs" should increase the most (by 4.3%) over the coming year. This projection was calculated from actual contract agreements made between building owners and unions representing building workers. In the case of non-union employees, growth in wages and winter and accelerating economic growth (and thus demand for oil) both at home and abroad. The Energy Information Administration (EIA) currently projects that world oil prices will increase from $14.50 per barrel to $16.50 per barrel between the second quarter of 1994 and the second quarter of 1995. This projection is based on two major assumptions. The first holds that worldwide demand for oil will jump by one million barrels per day as the Japanese and Western European economies recover from recent recessions, while "Pacific Rim" nations such as China continue to develop. The second assumption is that global oil production will remain fairly stable, with increases in output from Middle Eastern OPEC nations off-set by declining production from both the former Soviet Union and United States and stable production from non-Middle 27 Owner Income and Expense 1994 PIOC and Projected Increases for 1995 1994 10% 1995 8% 6% 4% 2% Insurance Utilities Repl. Costs Parts Eastern OPEC countries. 1 months, will increase further. The EIA forecasts to emerge from the recession over the coming supply, and weather conditions will increase the As the United States economy continues year, domestic demand for fuel oil is projected to rise. Projected growth in employment, industrial output and gross domestic product of roughly 2% between 1994 and 1995 in the face of a stable oil supply will place additional pressure on prices. If next year's weather patterns follow recent trends towards cooler average temperatures, short-run that these shifts in global and domestic demand, price of fuel oil grades two, four and six by respectively 5%, 9% and 13%, for a weighted average increase of 10% between 1994 and 1995. Insurance Costs + 0.8% After a period of substantial increases in demand for fuel oil, particularly in winter insurance costs, the insurance market stabilized 1 then. In 1994, the increase in insurance costs of "Short-Term Energy Outlook", Energy Information Administration, United States Department of Energy, First Quarter, 1994. 28 Contractors Administration Source: Price Index of Operating Costs, 1994. Fuel Labor Costs Taxes -2% Total 0% in 1988 and has been relatively constant since .8% was significantly lower than the projected 1994 Price Indices of Operating Costs increase of 2.1%. The projected increase of .8% Brooklyn Union Gas plan increases for gas average. figures are tentative, as the actual rates of for the 1994 PIOC is based on the latest three-year service of 2.3% and 2.1% respectively. These increase will be determined by the Public Utility Costs + 1% Service Commission in June 1994, although this Utility costs consist of charges for the use of electricity, natural gas, water and sewer should not have a profound effect on overall utility costs. Last year, after several substantial service, purchased steam, and telephone service. increases in water and sewer charges, utility index. froze the water and sewer rates for Fiscal Years The first three items account for over 95% of the The utility index should register the second lowest increase among all of the PIOC Mayor Dinkins and the New York City Water Board 1994 and 1995. Without an increase in water and sewer components over the next year. Con Edison will charges, the combined increases among the other in electricity rates on April 1, 1994. It is also 1% in utility costs in 1995. impose the last of the three consecutive increases likely that both Con Edison and Brooklyn Union Gas will file for rate increases in natural gas and steam during the 1994-1995 PIOC period. However, after several years of double-digit three types of utilities will produce an increase of Parts & Supplies + 1.5% Parts and Supplies is a very small increases in water and sewer charges, it is likely component of the PIOC, with a weight of less sewer charges during 1995. Without increases in average growth observed in this component that there will not be any increases in water and water and sewer charges, which account for more than 55% of the the utility component, utility costs will increase by only 1%. Con Edison estimated its last of three consecutive increases in electricity to be close to 2.2%, although the actual changes in total costs for electricity will also depend on the fluctuations in the fuel adjustment charge and than 3% in the 1993 index. According to the over the past three years, the cost of parts and supplies should increase by 1.5% over the coming year. Replacement Costs + 3.2% This component's relative importance in the PIOC (as measured by expenditure weights) various tax rates. In other words, the price of has fallen steadily in recent years. In 1993, it rates. index. Based on average price increases electricity may rise more or less than changes in In addition to higher electricity charges, rates for natural gas and steam should also rise over the coming year. Con Ed and accounted for roughly 1% of the entire price witnessed over the past three years, replacement costs should rise by 3.2% between 1994 and 1995. 29 1994 Income and Expense Study Owner Income and Expense S ince the enactment of New York’s Rent Stabilization Law in 1969, the Rent Guidelines Board (RGB) has analyzed changes in the costs associated with operating Cross Sectional Study years staff focused their efforts on the Price Index Income rental apartment buildings in the city. For many of Operating Costs (PIOC), using survey data for accurate tracking of changes in operating and - Average monthly rent collected by owners relied heavily on the PIOC and other indices in pre-war stock were $468 while the average maintenance (O&M) costs. In turn, the Board its determination of annual rent increases. was $521 per unit. Collections in the older rent for Post ‘46 units was $664. Despite on-going complaints from both - Average gross income, which includes rent information existed for gauging the accuracy of Sources of income other than apartment rent tenant and landlord groups, little reliable the PIOC until 1990. In that year, RGB staff gained access to a new source of data which permitted independent verification of the PIOC’s collected from commercial units, was $576. constitute about 11% of income for landlords as a group. accuracy: income and expense (I&E) statements, - The average rent collected in buildings from owners of “income producing” properties. in 1992, while average gross income was collected annually by the Department of Finance These I&E statements contain detailed information on income and costs in rent stabilized buildings, and are particularly useful because they comprise both cross-sectional data, without commercial units was $512 per unit $517. O&M Costs reflecting the condition of various types of rent - The average monthly operating and longitudinal data, which reflect changes in the Costs were substantially higher for Post ‘46 stabilized buildings in a given year, and condition of buildings which have filed I&E forms in at least two successive years. 30 Summary maintenance cost for all units was $395. units ($482) and much lower for the pre-war stock ($364). 1994 Income and Expense Study - Assuming that an audit of the 1992 income - Total income (i.e. apartment rent, sales of findings as in the 1992 audit, one would building owners increased by 3.1% from and expense data would yield similar expect O&M costs for stabilized buildings to be $366 rather than $395. - The unadjusted O&M cost for buildings services, and commercial rent) collected by 1991-1992. Changes in Costs without commercial units averaged $366, or - Total operating and maintenance (O&M) buildings. Adjusted by the findings of somewhat higher than the growth rate of about $29 less than the average for all Finance’s 1992 audit of 1990 RPIES (Real Property Income and Expense Statements), O&M costs would average $341, $25 less than the all-buildings average. O&M Ratios - The audit adjusted cost-to-rent ratio for all stabilized units was 70%, while the cost-to- gross income ratio was substantially lower at 63%. - The unadjusted O&M cost-to-rent ratio for buildings without commercial units was 71%. Longitudinal Study Changes in Income - Average rent collected rose by 3.5% between 1991 and 1992, slightly faster than the 3.4% rise recorded from 1990 to 1991. Rents in the Post ‘46 sector grew 2.3% while those in Pre ‘47 buildings rose 4.1%. - Rents rose fastest in Brooklyn (4%) and slowest in Queens (3.1%) . Increases in the Bronx and Manhattan were 3.6% and 3.3% respectively. costs increased 4.2% from 1991-1992, gross income collected over the year. - This is the first year where growth in PIOC- measured costs was equal to the increase observed in I&E figures. During 1989-1990, RPIE costs grew by 7.1% while the PIOC showed a 9.6% increase. This situation was repeated between 1990 and 1991, with the PIOC rising by 5.5% as costs reported in I&E findings grew by 3.4%. From 1991 to 1992, costs in both the PIOC and I&E data rose by 4.2%. Overall, from 1989-1992, costs in RPIE filings rose by 16% while those measured by the PIOC grew by 20%. Changes in O&M Ratios - The proportion of building income devoted to operating costs increased between 1991 and 1992 by seven tenths of one percent from the rate observed during 1990-1991. The cost to rent ratio also increased from 1991 to 1992 by about the same amount. Local Law 63 Local Law 63, enacted in 1986, requires owners of income producing properties in New 31 Owner Income and Expense York City to annually file Real Property Income building owners. Longitudinal data encompasses Department of Finance. While certain properties and 1993. However, analysis of filing dates and Expense Statements (RPIES) with the are exempt, including cooperatives, condominiums, buildings with 10 or fewer units and those with an assessed value below $40,000, the financial characteristics of thousands of rent stabilized apartment buildings throughout New York are annually catalogued in RPIE returns. Although data on individual properties is indicates that RPIE averages reflect conditions occurring around July of the calendar year in question, so that this year’s longitudinal study measures changes in costs and income from July 1991 to July 1992. This year 12,836 and 9910 buildings were strictly respectively analyzed for the cross-sectional and Department to release summary statistics of by matching a list of 39,000 rent stabilized confidential, Local Law 63 does allow the Finance annual RPIE data. Over the last five years Finance has provided the RGB with summary data for a random sample of rent stabilized properties. Samples in the first two studies were limited to 500 buildings, because RPIE files were not automated. Two years ago, following the computerization of all I&E filings, the sample size was increased to over 10,000 properties. Methodology This is the fifth year that RGB staff has been able to use cross-sectional data and the third year that longitudinal figures have been used to monitor current conditions as well as trends in New York’s rent stabilized housing. Because it traces actual income levels and costs (as reported by building owners) for the same properties over longitudinal I&E studies. Figures were produced properties registered with the New York State Division of Housing and Community Renewal (DHCR) with a list of buildings which had filed a 1993 RPIE statement (or both a 1992 and 1993 statement in the longitudinal sample). Buildings on the RGB list were excluded from both samples for the following reasons: - They contained less than 11 units. Owners of buildings with less than 11 apartments (without commercial units) are not required to file I&E forms; - Owners did not file a 1993 RPIE form for the cross-sectional study, or a 1992 or 1993 RPIE form for the longitudinal study; - No unit count could be found on completed RPIE filings; a number of years, longitudinal data is - No “apartment rent” was recorded on the performance of the PIOC in measuring changes improperly filled out or the building was particularly useful for analyzing the recent in operating costs of the rent stabilized housing stock. RPIE forms. In these cases forms were vacant; The data used in this report was - RPIE data was not entered in the database. returned to the Department of Finance by statements to the City’s Tax Commission, in primarily summarized from 1993 RPIE forms 32 properties which filed RPIE forms in both 1992 Some owners submit income and expense 1994 Income and Expense Study which case they do not have to submit RPIE 22 times higher on average than income in 1993 RPIE forms submitted to the Tax ten times their income on O&M expenses forms to Finance’s Property Division. The Commission are not yet computerized. Three major steps were also taken to weed out inaccurate building information which could have distorted the final results: - In the past, Finance used the total number of units from the RPAD (assessed value) file to categorize buildings by size and location. In many instances, it was discovered that the unit counts on RPIE forms were different than those on the RPAD file. Following a review of both sources, RGB staff ultimately decided that residential counts from the RPIE form were more reliable. 1992. Half of these buildings spent more than during the year. After compiling both samples, Finance categorized sample data into “cells” reflecting particular types of rent stabilized buildings throughout the five boroughs (such as post-1946 rent stabilized buildings in Queens with 20-99 units) as they have done in the past. Cross-Sectional Study Rents The 1992 average monthly rent collected by owners of rent stabilized - Average monthly rent for each building was apartment buildings was $521 per unit. rents from the 1991 HVS, RGB staff provided higher ($664) than those for pre-war units tested to control data quality. Using average Finance with rent intervals for each borough. If a building’s average rent fell outside the range, the building was removed from the sample; 386 buildings were expelled from both samples for this reason. Nearly 100 of Rents for Post ‘46 units were substantially ($468). Once again, rent in Manhattan ($632) was the highest in New York, followed by Queens ($491), Brooklyn ($439) and the Bronx ($428). Traditionally, average rents culled the structures reported average monthly from RPIE filings tend to be lower than data claimed average monthly rents below $100 New York City Housing and Vacancy Survey rents exceeding $2000 per unit, while 220 per unit. - Buildings in which operating costs exceeded income by more than 300% were excluded from both the cross-sectional and longitudinal studies, to ensure that averages computed from both samples were not on mean contract rents found in the triennial (HVS). This disparity mainly stems from the fact that the I&E data accounts for vacancy and collection losses, in addition to reflecting rents collected over a 12-month period (the HVS is usually conducted in the first three months of any given year). Using data from the 1991 and 1993 skewed. Twenty seven properties were HVS, the mean contract rent for all rent Among these buildings, operating costs were the average rent from the 1993 RPIE data by excluded from each sample for this reason. regulated apartments in 1992 ($559) exceeded 33 Owner Income and Expense Average Monthly O&M Cost, Rent, and Total Income Per Unit by Age and Borough, 1992. hardships than modern properties in the actual collection of their annual income. It is also interesting to note the 1200 relationship between rent levels registered 1100 1000 900 with the New York State Department of Housing and Community Renewal (DHCR) 800 700 600 500 400 300 200 100 0 and rent collections reported by landlords in the I&E filings. The gap between legal rents and rents actually collected may reflect a number of factors, including preferential rents, rents in controlled units, Average Costs Average Rent Post-46 Manhattan Pre-47 Post-46 Brooklyn Pre-47 Post-46 Between 1988-1991, staff estimated that Pre-47 Post-46 Pre-47 collection losses, and vacancy losses. Bronx Queens Average Total Income Source: NYC Department of Finance, 1993 RPIE Filings collected rents dropped from about 90% to 85% of registered rents. Between 1991 and 1992 this gap closed slightly, as collections increased to 86% of registered rents. The disparity between collections and registered rents varied widely among the boroughs, with properties in roughly 7%.1 The mean contract rent in older Manhattan collecting only 83% of the registered higher than the 1993 RPIE average, while the 89%. The respective collection rates in Brooklyn pre-war apartments ($514) stood about 10% 1992 mean contract rent for units built after 1946 ($670) exceeded the 1993 RPIE average for such average, while buildings in the Bronx collected and Queens stood at 87% and 88%. Use of a sample exceeding 500,000 units dwellings by 1%. allows reliable statistics to be calculated for were observed in last year’s I&E study, throughout New York’s boroughs. The chart Similar gaps between HVS and RPIE data particularly for the pre-war sector, where mean contract rents exceeded average rent collections by 13.5%. If even a portion of these observed “gaps” between HVS and RPIE data reflect vacancy and collection losses, then it seems that older rent 1 Median contract rents for 1992 were interpolated from rental data in the 1991 and 1993 New York City Housing and Vacancy Surveys (HVS). RPIE data includes rents for some rent controlled units. In order to arrive at a rent figure comparable to the I&E data, controlled and stabilized units from the 1991 and 1993 HVS data were combined to compute an average rent for all regulated units. 34 stabilized buildings face much greater rent in most of the building types encountered above shows average rent for each of the building types. Many owners of rent stabilized apartment buildings augment their income by selling services to their tenants as well as renting ground floor commercial space. The 1993 RPIE filings show an average gross income of $576 per rent stabilized unit, including the sales of services (e.g. laundry, garages/parking), as well as rent from commercial units. Such proceeds constituted roughly 11% of the total 1994 Income and Expense Study O & M Costs income earned by building owners in 1992. Manhattan owners especially benefit from Besides reporting O&M costs attributable commercial income, with 16% of their income coming from commercial units and services. The to apartments, RPIE expense categories include in Queens and 5% in both Brooklyn and the expenses for commercial space and apartments costs for commercial units. Unfortunately, respective figures for the other boroughs are 7% Bronx. 1992 Average Operating and Maintenance Cost by Building Size and Age $700 $27 $87 $41 $56 $64 $48 $52 $31 $120 $41 $43 $77 $35 $48 $175 $101 $176 $31 $19 $54 $71 $47 $33 $85 $141 $28 $28 $28 $43 $75 $39 $54 $20 $99 Post-46 11 to 19 All 100+ 20 to 99 11 to 19 0 $24 $22 $40 $71 $36 $45 $39 $68 $46 $80 $46 $29 $95 $112 $25 $22 $41 $72 $38 $43 $44 $78 Pre-47 Misc Insurance Admin. Maintenance $32 $28 $45 $76 $40 $54 $22 $105 Fuel $31 $17 Fuel Taxes $58 $25 $21 $40 $69 $38 $43 $41 $75 All Utilities Labor $78 $50 $30 $110 $151 $27 $21 $45 $72 $40 $41 $55 $95 All Stabilized $77 Maintenance 100+ $100 $65 Utilities 20 to 99 $200 $27 Insurance 11 to 19 $300 $18 Admin. Insurance = $16 All $400 Misc $33 $88 100+ $500 Insurance = $18 20 to 99 $600 are not distinguished on the RPIE form, making Labor Taxes Note: Costs on this chart represent unaudited monthly unit expenses reported in 1992. Totals may not add due to rounding. Source: NYC Department of Finance, 1993 RPIE Filings. 35 Owner Income and Expense the calculation of a “pure” residential operating were respectively trimmed by approximately residential O&M costs are rather high because Adjustment of 1993 RPIE data by the results of and maintenance cost impossible. Thus, the they include maintenance costs for commercial space. The average monthly operating and (25%) and one-third (37%). the 1992 audits reduces the average monthly O&M cost for stabilized units from $395 to $366. Audit-adjusted monthly O&M costs for maintenance cost for all rent stabilized units was buildings without commercial units were about Post ‘46 units ($482) and much lower for the pre- buildings. Last year, RGB staff found that taxes $395 in 1992. Costs were substantially higher for war stock ($364). In the boroughs costs parallel rents - lowest in the Bronx ($320) and highest in Manhattan ($490). The chart on the previous page shows costs according to building size and age. Over the past five years, the Department of Finance and RGB staff have extensively scrutinized RPIE expense data for accuracy. Assessments of early samples indicated that more than half (55%) of “miscellaneous” costs were actually administrative or maintenance costs, while another 15% were not valid business expenses. Finance explored these findings further in 1992 by conducting thorough audits on the income and costs of forty-six rent stabilized properties. The auditors ultimately found that owners overstated O&M costs in RPIE filings by about 8%. Costs tended to be less accurately recorded in small (11-19 units) and medium (20- 99 units) sized buildings (overstated by 13% and 9% respectively). Expenses in large (100+ units) $25 residential” more (overstated on average by only 2%), but remain large stabilized properties refused to cooperate maintenance costs costs were respectively 13%, 12% and 5% lower Cost-to-Income and Cost-to-Rent Ratios 1988-1992 (Cross-Sectional Data) 80% Cost-to-Income Ratio 75% Cost-to-Rent Ratio 70% 50% while administration and miscellaneous costs “miscellaneous” total variation. Taxes, labor and miscellaneous three categories: maintenance, administration, lowered by an average of 11% for all buildings, and accounted for more than one quarter (29%) of the 55% and miscellaneous costs. Maintenance had to be stabilized than half (54%) of the difference while labor, with Finance’s assessors. Expense reductions were concentrated in all expenses. This year taxes accounted for more 60% be and variance attributed to maintenance and labor somewhat inconclusive since several owners of to buildings buildings, with one quarter of the remaining 65% appeared lower ($341) than the average for all accounted for 40% of the difference between “all- accurate buildings 36 one-quarter 69.7% 65.8% 59.6% 1988 66.5% 60% 1989 62.3% 1990 69.6% 70.2% 62.9% 63.4% 1991 1992 Source: NYC Department of Finance, RPIE Filings 1994 Income and Expense Study on average for buildings without commercial space than for all stabilized properties. comprised of property taxes, maintenance, labor, and fuel costs. Maintenance and fuel costs occupied larger shares of total expenses in older O & M Ratios (pre-47) buildings, while taxes and labor costs To facilitate comparison with previous analyses, expense data from the 1993 I&E cross- sectional study (covering market conditions for 1991) was adjusted to account for buildings with cost-to-income ratios greater than 300% as well as the results of the 1992 Finance audit. The chart on the previous page shows the relationship were less important. On the other hand, newer (post-46) buildings spent relatively more money on taxes and labor costs and less on maintenance and fuel costs. Much less variation was observed within the other four expense categories (utilities, administrative, insurance and miscellaneous costs) among buildings of different age. Building size also affects the distribution between adjusted operating costs, rents and gross of costs. Taxes, labor, fuel and maintenance costs RGB staff estimates that the proportion of particularly associated with size, comprising a income over the past five years. gross income spent by stabilized building owners on audited operating costs averaged 59.6% in 1988 and 60% during 1989. In 1990, rapidly escalating expenses pushed this ratio to 62.3%. Since 1990, the cost-to-income ratio has continued to increase, although at a slower rate, rising to 62.9% between 1990 and 1991 and growing again to 63.4% from 1991 to 1992.2 again dominate overall expenses. Labor costs are greater share of total O&M costs in larger buildings. This may be due to the concentration of large modern (post-46) stabilized buildings in Manhattan, which tend to employ doormen. In contrast O & M Costs of Stabilized Buildings by Age and Size, 1992 1946 11-19 13% 12% 17% 6% summarizes the percentage of each O&M dollar Fuel 11% On average, in 1992, nearly two-thirds of total expenses in stabilized buildings were 2 For detailed analysis of changes in costs, rents and income from 1989 to 1990, refer to Rent Stabilized Housing in New York City: A Summary of Rent Guidelines Board Research, 1992. Utility Maint. Admin. Insurance Misc. Total* Post 1947 23% Labor Pre All Taxes various age and sizes during 1992. insurance those with more than 100 units. of owners of different types of stabilized spent on eight expense categories in buildings of and scale realized by larger properties, particularly Discussion of average costs does not buildings. The table in the next column maintenance decrease with size, probably due to efficiencies of Distribution of O & M Costs account for variations in the actual O&M budgets fuel, 11% 21% 13% 6% 100% 21% 19% 20% 16% 4% 7% 6% 4% 7% 5% 100% 6% 11% 5% 10% 6% 26% 13% 11% 6% 22% 13% 11% 20% 28% 8% 11% 19% 11% 29% 20-99 100+ 100% 10% 11% 6% 11% 11% 7% 10% 10% 6% 100% 100% 100% Note: Totals may not add to 100% due to rounding 37 Owner Income and Expense Expenses in Buildings with Cost-to-Income Ratios Exceeding 100% as a Percentage of the All Stabilized Buildings Cost, 1992 200% Average Costs for All Buildings in 1992 = 100% 175% 150% 125% 100% 75% 50% Miscelleaneous Total Costs Insurance Administration Maintenance Utilities Fuel Labor 0% Taxes 25% fuel, maintenance Source: NYC Department of Finance, RPIE Filings Distressed Properties found During 1992, 1570 properties, roughly one-eighth (12%) of the cross sectional sample, had O&M costs which exceeded gross income. Only 60 of these buildings were constructed after 1946. Over the previous two years, such “distressed” buildings had respectively comprised 13 to 14 percent of the cross sectional sample. In buildings where expenses exceed income, unprofitability is both a function of the “miscellaneous”categories, which in and these “distressed” buildings were respectively 135%, 135% and 187% of the stabilized average. Not surprisingly, these buildings also paid less property taxes (85% of the all-building average) than other stabilized structures in 1992. Longitudinal Study Analysis of the nearly 10,000 stabilized abnormally high expenses (114% of the all- properties that filed RPIE forms in both 1992 and rents (only 68% of the all-building average in rents and provides a basis for evaluating the building average in 1992) and abnormally low 1992). Most of the variance in unadjusted costs 38 in between these and other stabilized buildings was 1993 is designed to measure changes in costs and price index. However, although the I&E filings analyzed in this study were collected by Finance 1994 Income and Expense Study in 1992 and 1993, the data contained in them largely reflects conditions for calendar years 1991 and 1992. changes in rent throughout the city’s boroughs. 1992 appears to have brought relief to some rent stabilized landlords in Manhattan. Rents Over the past few years high vacancy rates, Average rent increased by 3.5% from 1991 to 1992, about the same increase observed between 1990 and 1991 (3.4%). Rents in the post- 46 sector went up 2.3% while charges in pre-47 buildings rose 4.1%. Mid-sized (20-99 unit) buildings witnessed the fastest rent growth (4%) while rents in large (100+ unit) buildings rose the least (2.4%). Small (11-19 unit) properties experienced rent growth of 3.8% during 1992. In terms of both age and size, rents in small post- war buildings increased the least (1%) while those in medium sized pre-war properties grew Percentage Change in Monthly Rents by Borough and Building Age, 1991-1992 above average rents, and the city’s weak economy had prevented many owners of post- war properties in the borough from collecting all of the rent increases authorized by the RGB. The “drought” that affected such buildings in 1991, during which rent collections actually declined, seems to have abated somewhat during 1992 with rents in Manhattan’s post-war stock growing by 1.5%. Nevertheless, rent increases in this stock lagged substantially behind the marketwide average. In contrast to the 1980’s, when rent collections accelerated faster than the RGB’s expectations, this year's increase of 3.5% roughly paralleled both the RGB’s rent index (4%) and the increase observed in DHCR registered rents (3.8%) between 1991 and 1992. Gross income (i.e. apartment rent, sales 4.5% 4.5% of services, and commercial rent) collected by 4.0% 4.0% owners between 1991 and 1992 increased by 3.5% 3.5% 3.1%, slightly less than growth in apartment rents. In keeping with previous years, income in 3.0% 3.0% pre-47 units rose at a greater rate (3.3%) than in 2.5% 2.5% the post-46 stock (2.7%). In terms of size, income 2.0% 2.0% grew fastest in medium-sized buildings (4.2%) and slowest in large ones (2.9%). 1.5% 1.5% 1.0% 1.0% O & M Costs 0.5% 0.5% 0 0 the most (4.2%). The chart below summarizes All All Manhattan Manhattan All AllStabilized Stabilized Brooklyn Brooklyn Post'46'46 Post Overall operating and maintenance costs Bronx Bronx Source: NYC Department of Finance, RPIE Filings Queens rose 4.2% during 1992, thereby exceeding Queens Pre Pre '47 '47 average rent growth for stabilized properties. Costs rose less in buildings erected after 1946 (3.5%) and faster in those built before 1947 (4.6%). Size also influenced cost growth, as expenses in 39 Owner Income and Expense small buildings rose faster (4.9%) than those in RPIE filings may reflect price inflation, in which (respectively 4.3% and 3.7%). given level of housing quality, or shifts in either medium sized or large buildings Among the various costs faced by building owners, taxes, utilities and labor costs grew fastest (by respectively 7.7%, 7.4% and 5.7%) from 1991 to 1992. In contrast, fuel costs landlords are forced to spend more to maintain a investment, where building owners change the quality of their buildings by spending more or less money to maintain them. Despite those drawbacks, it is useful to remained stable (-0.1%) and insurance costs make this comparison in order to evaluate how made a surprising rebound, growing by 4.2% in costs. Over the past few years, growth in PIOC- Percentage Change in Monthly O&M Costs, PIOC vs. I&E Data, 1989-1992. PIOC? Differences in the methods used to measure O&M components make comparisons between the two sets of data rather inexact. For the PIOC are measured on an April-to-April basis, while most expense statements (88%) filed by landlords are based on the calendar year. Reconciling this difference requires use of a weighted average of two PIOC years to render figures resembling I&E data. Comparison between the two sources of information is thus achieved at the cost of some distortion. Analysis of PIOC and I&E data is further muddied by the fact that the two indices measure different things. Income and expense statements reflect actual expenditures incurred by landlords, while the PIOC heavily relies upon proxies to estimate actual shifts in O&M costs. Furthermore, the PIOC monitors the costs associated with maintaining properties to a constant standard of quality, while RPIE filings may reflect the investment or disinvestment patterns of building owners. Thus, rising O&M costs reported by 40 PIOC: 89-92 I&E: 89-92 example, many of the components examined in 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% Source: NYC Department of Finance, RPIE Filings Total compare with the cost increases measured by the grew by 7.1%. The following year, the PIOC rose Insurance How do the changes in the I&E figures increased 9.6% while those reported to Finance Administration cannot be determined with certainty. RPIE data. During 1990, costs in the PIOC Maintenance generally better conditions) or merely inflation expense increases reported by building owners in Utilities investment in rent stabilized properties (and thus measured costs has consistently outpaced Fuel year. Whether such growth reflects greater Labor 1992 after decreasing by 1.7% in the previous well the PIOC methodology tracks changes in Taxes actually fell by 2.8%. Maintenance expenses 1994 Income and Expense Study 5.5% as RPIE costs went up 3.4%. This by building owners and the time they are billed both the PIOC and RPIE filings growing by Three years is hardly enough time to persistent gap closed in 1992, with costs in 4.2%. The chart on the previous page illustrates the different growth rates reported by RPIE filings and the PIOC for various costs between 1989 and 1992. During that three year period, the price index indicated a 20% increase in total O&M costs, while actual expenditures reported to Finance rose 16%. All of this difference between the I&E filings and the PIOC occurred between 1989 and 1991, when RPIE by fuel providers. accurately assess the effectiveness of the PIOC and its various components. Hopefully, future years will allow the RGB to trace the source of discrepancies between these two data sources, and to maximize the performance of the PIOC in measuring operating cost changes. Cost Ratios Overall, the proportion of gross income and PIOC costs respectively increased by 11% spent on unaudited expenses grew between 1991 Reducing overall O&M expenses into The proportion of income spent on audited and 16%. component costs reveals some similarities between PIOC and RPIE data. Between 1989 and 1992, components with both the highest and lowest growth rates in RPIE filings (taxes/utilities and fuel/insurance) respectively had the highest and lowest rates in the price to 1992, rising by seven tenths of one percent. expenses also grew by seven-tenths of a percentage point. Some change was also observed in the proportion of rents used to pay audited costs, which increased by six tenths of a percent. The percentage of buildings with an index. However, as the chart on the previous O&M to income ratio in excess of 100% declined changes in taxes and utility costs quite well over that filed RPIE forms in 1991 and 1992. Though page shows, while the PIOC tracked actual the three year period, the index may not have accurately measured shifts in fuel and insurance costs. In the case of insurance, the difference between PIOC and RPIE figures may reflect a decrease in the level of insurance used by building owners, although the PIOC does attempt to compensate for changes in coverage. from 12% to 11% of the roughly 10,000 buildings there are slightly fewer buildings operating with an income ratio over 100%, the basic characteristics of these buildings do not differ from year to year. As reported in the crosssectional study, these buildings have low average rents and high operating expenses. Unfortunately, the summary statistics available to staff are not adequate for a more insightful The discrepancy in fuel costs may stem from the analysis. For example, we were unable to analyze fuel costs, which may overemphasize changes in income ratios above 100% and those buildings “degree-day” formula used to compute PIOC the weather. In addition, the I&E data does not account for lags between the consumption of fuel the difference between the buildings with that, in prior years, had negative net operating income. 41 1994 RGB Mortgage Survey Owner Income and Expense S ection 26-510(b)(iii) of the Rent Stabilization Law calls upon the Rent Guidelines Board to consider the "costs and availability of financing (including effective rates of interest)" in its deliberations. To assist the Board in meeting this mandate, RGB staff conducts an annual survey of financial institutions which underwrite mortgages to multi-family properties in New York City. The findings of the 1994 mortgage survey are summarized in this report. Summary In 1991, a deepening recession, the "S&L crisis" and the collapse of New York's co-op market drastically curtailed the volume of multifamily lending in the city. This was demonstrated by declining loan applications from landlords and fewer approvals on the part of financial institutions. The 1992 Mortgage Survey showed increased cautiousness among bankers and landlords, as adverse market conditions forced many banks to tighten lending requirements or cease financing rent stabilized buildings, despite rent stabilized housing has undergone considerable change. Average interest rates for both new and refinanced permanent mortgages declined for the fifth straight year, from 9.2% to 8.6%, while loan volume soared. Additionally, far fewer institutions tightened their underwriting standards, with only 14% of this year's respondents reporting stricter lending criteria, as opposed to 42% of last year's sample. Many landlords took advantage of historically low rates to refinance fixed rate mortgages in much greater numbers than last year. Such refinancing activity may have affected mortgage delinquencies in the rent stabilized stock, which declined from an average rate of 4% to 3%, while foreclosure activity remained fairly stable. Changes in the Mortgage Survey Sample and Questionnaire Besides updating mailing lists of local aggressive efforts by the Federal Reserve Board to mortgage lenders, staff of the Rent Guidelines market began to improve in 1993 for some lenders mortgage questionnaire to create the 1994 reduce interest rates. The multi-family loan and building owners, as loan volume started to 42 Over the past year the credit market for stabilize and interest rates continued to fall. Board substantially modified last year's Mortgage Survey. New questions examined the importance of building size, location and age in 1994 Mortgage Survey determining loan approvals. Additional attention recently withdrew completely from making proceedings against rent stabilized properties. reported mergers with other institutions, but said was focused on the outcome of foreclosure Questions on the relative importance of rent stabilized mortgages on the loan portfolios of individual banks were eliminated, since this information could be gained from other questions, and because portfolio size was found to have very little statistical effect on the survey's data quality. commercial loans. Additionally, two respondents they were still active in lending to rent stabilized buildings. The Federal Reserve's aggressive policies have lowered rates on mortgages for both single and multi-family housing in recent years. Rates continued to fall in 1994, although not at last year's pace, as demonstrated in the chart on the next page. Respondents to the 1994 Mortgage Response to the Survey Survey report average rates of 8.6% for both new and refinanced permanent mortgages on rent The 1994 Mortgage Survey received the highest response rate ever, with about half of the fifty two institutions questioned providing useful data. Unlike last year, when more than one-third of respondents said they had stopped underwriting stabilized dwellings, a drop of roughly 60 basis points from last year's average of 9.2%. Service fees ("points") also decreased, from an average of 1.4% of loan value a year ago to 1.2% and 1.1% of value for new and refinanced loans. Unlike last year, it seems that many multi-family properties, only three of the lenders borrowers are taking advantage of low interest family lending over the past year. Two rent stabilized buildings. Whereas less than a participating in this year's survey ceased multiinstitutions reported that they did not loan to either rent stabilized properties or buildings with more than four dwelling units. The third lender rates by refinancing outstanding mortgages on quarter of respondents to the 1993 Mortgage Survey reported significant levels of refinancing, nearly half (10) of the 22 respondents to this year's 1994 Mortgage Survey Respondents 11% 19% 70% Do Not Underwrite Mortgages [3 Banks] Offer Mortgages (Underwriting Changes) [4 Banks] Offer Mortgages (No Underwriting Changes) [19 Banks] Source: Rent Guidelines Board, 1994 Mortgage Survey. Note: Respondents to the 1994 Mortgage Survey included 16 Savings Banks, 6 Commercial Banks and 5 Savings & Loans. 43 Owner Income and Expense Average Interest Rates on New and Refinanced Permanent Mortgages for Rent Stabilized Buildings, 1989-1994 12% '89 '90 '91 '92 New '93 that refinance since default has slackened, underwriting standards are generally more conservative and the metropolitan economy seems to be recovering. This relatively optimistic outlook is also half (43%) of respondents to the 1994 Mortgage reported significant levels of refinancing activity. The chart below shows that the proportion of fixed rate mortgages refinanced at lower rates has tripled over the past year, from an average of roughly 8% in 1993 to 23% in the most current survey. Such levels of refinancing represent a sharp change from a year ago, when few rent stabilized landlords were able to refinance mortgages, primarily due to low property values. A possible explanation for the recent upturn in refinancing may lie in the fact that many lenders are seeking higher returns than are currently offered by government bonds, and are willing to refinance well maintained and managed rent stabilized buildings in strategic locations1. Given 1 Albert Berger, "Multi-Family Mortgage Financing Opens Up'" Real Estate Weekly, November 3, 1993; and Albert Berger, "Mortgage Outlook for Multi-Family Property Improves'" Real Estate Weekly, November 10, 1993. 44 particularly 4% Refinanced mortgages on the part of lenders is not surprising, reflected in changes in loan volume, loan Source: Rent Guidelines Board Mortgage Surveys survey Treasury Bonds of 3.1% and 6.1%, such behavior 8% 0% '94 respective yields on 3 month and 10 year approvals and underwriting standards. Nearly Survey reported significant increases in the volume of permanent mortgages made to rent stabilized properties. This differs dramatically from the past two years, when only 20% and 11% of responding lenders claimed increased volume. Likewise, the proportion of institutions reporting either stagnant or decreased loan volume has Percentage of Fixed Rate Mortgages Refinanced to Lower Rates, 1993 and 1994 24% 20% 16% 12% 8% 4% 0% 1993 1994 Source: Rent Guidelines Board, Annual Mortgage Surveys Note: The 1993 average includes the responses of seven lenders who said that none (0%) of their fixed rate mortgages had been refinanced. No lenders in the 1994 Mortgage Survey gave this response when asked the same question in 1994. 1994 Mortgage Survey also decreased from 80% of total respondents in 1992 and 89% last year to 57% of responding institutions in 1994, as show in the chart to the right. Increased loan volume cannot be firmly linked to changes in either loan approvals or underwriting criteria. Three lenders (13%) in this year's survey reported significant change in their approval rates for mortgages to rent stabilized buildings, while four respondents (17%) changed their underwriting standards over the past year. All lenders in the latter group increased loan monitoring and used more stringent approval standards. Three institutions decreased the Loan to Value ratios for mortgages written to rent stabilized properties. In two cases, change in approvals coincided with alterations made to underwriting standards. Two-thirds of respondents traced the stimulus for stricter underwriting criteria to increased delinquencies Change in Loan Volume, 1992-1994 Percent of Banks 8% 80% 60% 6% 4% 40% 2% 20% 0% Increase Decrease 1992 1993 No Change 1994 and defaults in recent years, along with greater Source: Rent Guidelines Board, Annual Mortgage Surveys and the general improvement of the metropolitan performing loans, while only 6% of the lenders in demand for securitized rent stabilized mortgages economy. Further evidence of improvement in the rent stabilized lending market is provided by this year's survey witnessed greater levels of non-performance. Although non-performance among rent non- stabilized mortgagees appears to be declining, Over the past year, the average percentage of year. Twenty two institutions responded to responses to questions concerning performing loans and foreclosure proceedings. non-performing (delinquent) loans fell from 4% foreclosures have remained stable over the past questions about foreclosure activity in this year's to a current average of 3%. Among six survey, and only one reported a decrease in the 1994 Mortgage Surveys, one third (out of 19) institutions reported substantial institutions participating in both the 1993 and claimed decreased non-performance while half witnessed no change over the year. Likewise, one quarter of all respondents in both the 1992 and 1993 Mortgage Surveys experienced growth in non- number of foreclosure actions. In contrast, two increases in their number of foreclosures in last year's survey. Respondents mainly attributed change in foreclosure rates to shifts in net rental income, operating costs and debt among owners of 45 Owner Income and Expense rent stabilized buildings, although two lenders Characteristics of MortgageFinanced Properties mentioned the general improvement of the city's economy. A new section in the 1994 Mortgage Survey explored how lenders ultimately resolved The of increasingly foreclosure proceedings against owners of rent cautious reported that, on average, nearly half (45%) of all affected the accessibility of mortgage financing to stabilized buildings. Thirteen institutions foreclosure actions against rent stabilized buildings ultimately resulted in seizure. Less than one-third of these respondents claimed seizure rates exceeding 80%. The most widely cited alternatives to seizure were debt restructuring and resumption of regular debt lending patterns and stricter underwriting criteria over the past few years has owners of rent stabilized apartment buildings. High demand for new or refinanced mortgages, spurred by historically low interest rates, has allowed lenders to carefully chose where they make loans. This year, nineteen institutions reported service payments, while securing alternative debt maximum loan-to-value (LTV) standards for new Lack of historical data prevents further analysis However lenders often do not lend up to this service arrangements was less widely reported. of this data. Loan to Value Ratio of Mortgages for Rent Stabilized Buildings, 1994 mortgages that averaged 69% of building value. maximum. The most common loan ratio of new mortgages made to average is 66% of building value. Nine lenders also required the net income of newly mortgaged buildings to be at 10 least 125% of annual debt service 8 payments, orienting their lending 6 towards rent stabilized properties with stable incomes, low maintenance costs 4 as well as few vacancy and collection 2 0 rent stabilized properties over the past year is 65%, while the Number of Banks losses. Despite such standards, more <60% 60% 65% than half of the respondents claimed 70% 75% that vacancy and collection losses for >75% Source: Rent Guidelines Board, 1994 Mortgage Survey Note: This represents the average value of mortgages actually underwritten by participants in the 1994 Mortgage Survey, not the maximum amounts which these banks will lend to rent stabilized properties. 46 development the "typical" rent stabilized property stood at or exceeded 5% of gross income. also Building size and maintenance appeared to be important considerations with lenders. Nearly 1994 Mortgage Survey Vacancy and Collection Losses Reported by Lenders, Rent Stabilized Properties, 1994 Number fo Lenders 7 6 5 4 3 2 1 0 1% 2% 3% 4% 5% 6+% Source: Rent Guidelines Board, 1994 Mortgage Survey Note: This chart shows average vacancy/collection losses in rent stabilized properties underwritten by respondents to the 1994 Mortgage Survey. one third of the respondents reported minimum rent stabilized buildings. Four respondents and 10 units per building. Lenders tend to confines of a specific borough, usually the one in thresholds for building size averaging between 6 underwrite new or refinanced mortgages to rent stabilized buildings averaging between 50-99 units in size. Building location and the potential for conversion to cooperative ownership seemed to be relatively less important to underwriters of reported that they loaned only within the which they were based. Significantly, only two institutions reported consideration of the potential for co-op conversion in their guidelines for lending to rent stabilized buildings: one lender claimed such potential was sometimes considered, while the other always considered the possibility. Size of Rent Stabilized Buildings Receiving Mortgage Financing 5% 16% 11% 42% 11-19 units 20-49 units 50-99 units 26% Source: Rent Guidelines Board 1994 Mortgage Survey. 6-10 units 100+ units 47 Tax Arrears in Rent Stabilized Buildings, 1994 Owner Income and Expense (1) conducted further research on mortgaged Summary properties, (2) surveyed the external condition of over 300 properties, and (3) mailed out 2500 The problem of tax arrears in the rent Much of last year's report focused on stabilized sector continued to worsen in 1993. mortgage debt and found buildings with tax quarters in tax arrears and the mean level of not know to what extent these buildings are Both the number of buildings at least three arrears increased. Overall, the amount of arrears per unit rose by 8%, but for buildings that had arrears in both 1992 and 1993, arrears per unit arrears to be overmortgaged as a group, yet did facing foreclosure actions. This year, staff determined that 1 out of 5 buildings with arrears face mortgage foreclosure actions. However, increased by 33%. Since this category of relatively few of the foreclosure actions have yet buildings with arrears, it appears that 1993 statistical analysis found that mortgage debt, buildings constitutes most of all stabilized witnessed the on-going deterioration of the worse-off buildings. In another ominous note, the size of buildings at least three quarters in arrears has been increasing steadily for the past four years. In 1989, the average size of a building in arrears was 13.4 units. In 1993 the average size was 17.6 units. Last year's report on tax arrears succeeded in characterizing buildings with tax arrears but was unable to answer several questions concerning mortgage debt and foreclosure actions, the current physical conditions of the buildings, and various characteristics of the owners of these buildings. 48 surveys to owners of buildings with tax arrears. Towards these ends, in the past year staff has: resulted in property seizures. Furthermore, while certainly not the sole causal factor of arrears, probably does play a significant and independent role, thus reiterating the findings of the previous report. Are buildings with tax arrears in worse physical condition? A survey of the external condition of these buildings found them to be in slightly worse physical condition than buildings citywide. Few buildings had walls or windows in poor condition and nearly all of the buildings were fully occupied. However, buildings with tax arrears had significantly less commercial space than their citywide counterparts. The survey of owners of buildings with tax arrears has shown that a 'typical' owner of a building in tax arrears owns the building selected Tax Arrears in Rent Stabilized Buildings, 1994 for the survey and one or two other small initiative would improve the economic viability these owners employ outside management favored some type of supplemental increase. buildings (perhaps a private residence). Few of companies. The typical building in tax arrears is a pre-war 12-15 unit building with about one rent controlled unit and a vacancy rate roughly equal to the citywide norm. The owner survey revealed vacancy and collection losses to be a severe problem facing buildings with tax arrears. According to the respondents, nearly 20% of the potential monthly rent roll is typically uncollected, 6% due to vacancy and 13.5% due to collection losses. Unrecovered rent of more than $2500 from a single tenant was a widespread dilemma affecting nearly 70% of owners. Owners also have relatively little income from commercial of their building, two-thirds of the owners Specifically, 41% of respondents favored a supplemental increase for low rent apartments or a supplemental increase for long term tenants, and 26% favored a supplemental increase for small buildings. In contrast, only one-third of the owners favored increased general guideline allowances - 28% favored higher lease renewal allowances and 5% favored higher vacancy allowances. Change in Arrears, 1988-93 Staff began this study by obtaining a tax units with which to buffer a shortfall in the arrears file from the Department of City When asked what one single RGB information from several sources, including the collection of residential rents. Planning. The City Planning database included Tax Arrears per Unit and Number of Rent Stabilized Buildings in Arrears, 1988-93 Arrears per Unit Number of Buildings Number of Buildings $2000 5000 Arrears per Unit $1600 4000 $1200 3000 $800 2000 $400 1000 $0 1988 1989 1990 1991 Source: NYC Department of City Planning Tax Arrears File, January 1994 1992 1993 0 49 Owner Income and Expense Department of Finance (e.g. tax arrears) and the quarters in arrears has been increasing steadily 1991 and prior years City Planning revised the the 38,000 registered buildings, 4291 (11%) were Department of General Services (e.g. vestings). In arrears figures annually; in 1992 semi-annual updates were begun. The newest tax arrears figures used in this report are fairly current, dating from January 1994. since 1989 and did not lose any steam in 1993. Of at least three quarters in arrears in January 1994. This figure is a sizeable increase over 1992 and more than 50% higher than 1988. The average amount of arrears per unit in The City Planning arrears file was buildings at least three quarters in arrears has also properties, resulting in a database consisting of rate of 8%. The mean level of arrears has increased matched with the RGB's list of rent stabilized increased since 1992, though at a slightly slower Total Number of Units and Average Size of Buildings in Arrears, 1988-93 Number of Units Size of Building (units) Number of Units Size of Building 80,000 18 60,000 16 40,000 14 12 20,000 0 1988 1989 1990 Source: NYC Department of Planning Tax Arrears File, January 1994 1992 1993 stabilized buildings with tax arrears in one or 91% since 1988, from $800 per unit to $1530.1 buildings were registered with the State Division increased as much as in previous years does not less than three quarters in arrears were excluded slowing. In fact, in 1993 there was an influx of more years from 1988 to 1993. All of these of Housing and Community Renewal. Buildings from the sample; the amount owed by many of these buildings was insignificant. In 1993 both the number of buildings in arrears and the level of arrears grew worse. The number of rent stabilized buildings at least three 50 1991 10 The fact that mean arrears levels have not necessarily mean that growth in arrears is slightly larger buildings to the arrears group that 1In this report the definition of 'at least three quarters in arrears' is interpreted more specifically than in last year's report and thus tax arrears figures reported here for 1992 and earlier years are somewhat different than last year's report. Tax Arrears in Rent Stabilized Buildings, 1994 had not been in arrears in the previous five years. have begun to accumulate arrears. all buildings in arrears in 1993, had mean arrears translated into increased vestings by the city. In level for all buildings in tax arrears. For buildings in any year since 1986. However, current figures These buildings, which made up almost 20% of levels of $680, substantially lower than the mean that had been in arrears in both 1992 and 1993, the mean level of arrears has increased 33%, from $1530 to $2030 per unit. This group of buildings comprises 70% of the sample and for these buildings, 1993 has witnessed their on-going deterioration. The arrears problem may have finally fiscal 1993 nearly 500 titles were vested, the most imply that vesting activity in fiscal '94 has dropped off dramatically from the previous year. This decline is surprising, given the trend in arrears, and may not be completely accurate since a large Brooklyn vesting is soon expected. Nevertheless, a precipitous drop in the Although the number of buildings at redemption rate of properties filed for vesting since the previous year, the number of units in buildings vested in the near future. The least three quarters in arrears increased only 12% arrears increased twice as fast, from 60,900 in 1992 to 75,500 in 1993. In fact, the size of buildings at least three quarters in arrears has been increasing gradually but steadily since 1989. In 1989, the average size of a building in arrears was 13.4 units and in 1993 it was 17.6 units. The new additions to the arrears group in 1993 average 26 units, substantially higher than the overall mean building size. As the long-running recession continues, larger and larger buildings Redemption Rate for Rent Stabilized Buildings Year of Filing % of Buildings Redeemed 1989......................................90.8% 1990......................................73.1% 1991......................................68.1% 1992......................................29.4% Note: The 1991 figure is based on a weighted average and the 1992 figure includes a projection for December 1993. Source: Department of Finance, Annual Reports on the NYC Real Property Tax. (see box below) foreshadows larger numbers of redemption rate, calculated as the percentage of properties withdrawn from the vesting process by December 31st of the year following the year of initial filing, decreased from 68% for buildings filed in 1991 to 29% for buildings in 1992. With far fewer properties being redeemed by owners, the number of buildings taken by the city should increase dramatically. Arrears and Mortgage Debt Last year's report on tax arrears in rent stabilized housing ended with the warning that properties with tax arrears are "overmortgaged" as a group, and suggested that aggregate income is insufficient to cover both mortgage debt and operating expenses. It presumed that many buildings with arrears were facing mortgage foreclosure actions but had no further information at the time. Two major questions were left unanswered by last year's report: 1. Does the measured association of mortgage debt and tax arrears indicate a causal relation or a mere coincidental relation between the two? 2. To what extent are marginal buildings facing 51 Owner Income and Expense foreclosure actions and how serious a threat does foreclosure present to buildings with such as building location, lis penden status4 , and arrears? date of observation (i.e if the building was in questions through two parallel studies. The first in the pre-recession years of 1988 or 1989) also RGB staff attempted to resolve these study, using sophisticated statistical analysis2, helped clarify the role mortgage debt plays in determining tax arrears. It found that mortgage arrears in the recession years of 1990 or 1991, or significantly and positively affect the level of arrears.5 Although the analysis has indicated a debt, while certainly not the sole determining statistically significant relationship between debt and independent role. The second study, a review recession there are equally, or more, important factor of arrears, probably does play a significant of records at the various county clerk offices, has shown that 1 out of 5 buildings with arrears, concentrated mainly in Manhattan, face mortgage foreclosure but that few of the foreclosure actions have yet resulted in property seizures. Measuring the Effect of Mortgage Debt on Tax Arrears To get a better understanding of the relation between mortgage debt and tax arrears, a statistical analysis was undertaken on 333 randomly selected buildings with arrears. This analysis looked at mortgage and arrears levels in the four years from 1988 to 1991. Due to the unavailability of complete mortgage data, the mortgage figures used in the analysis were only of debt assumed since 1986. Thus any measured effect of debt levels on arrears is likely to be somewhat understated since only recent debt, and not a building's total debt level, is used in the analysis. The analysis reveals a statistically significant and positive relation between 2The analysis involved multiple regression equations. Regression analysis measures the degree of association between a dependent and independent variables and is often used in economic forecasting. 52 mortgage debt and arrears.3 However, factors and arrears, it also suggests that in times of causes of tax arrears than mortgage debt. The measured association between debt and arrears is strongest in 1988 and grows continually weaker in later periods. In fact the measured association is not even statistically significant in 1991 - recessionary forces have overwhelmed any effect debt may have. To insure that these results were accurate, further analysis attempted to control for any variability in arrears due to differences in average rent by creating a ratio of arrears to rent levels for each particular building. This ratio variable was found to be significantly and positively related to mortgage levels in three of the four years of observation, thus supporting the hypothesis that mortgage debt 3The elasticity of arrears per dollar of debt was found to be .002- that is for every additional $500 of debt assumed by a unit, its arrears can be expected to increase by $1. Thus the results reveal that a unit with no debt averages $322 in arrears, a unit with $10,000 of debt per unit can expect arrears of $344, and a unit with $50,000 of debt can expect arrears of $428. 4Lis penden status indicates that a building's deed is contested by a pending lawsuit. 5Arrears levels of buildings in Manhattan are, on average, $400 more per unit than buildings in the other boroughs. Buildings with lis penden status have, on average, arrears levels $150 more per unit than buildings without mortgage liens. Lastly if the arrears occurred in 1990 or 1991 then the amount owed would be, on average, $120 or $250 more respectively than if the arrearage occurred in 1988 or 1989. Tax Arrears in Rent Stabilized Buildings, 1994 affects arrears variables.6 independently of other The analysis has shown that the level of mortgage debt positively affects the level of tax arrears. Yet there are other qualities, such as building location and year of observation, which also positively affect the level of tax arrears. It would be difficult to draw the conclusion that high debt levels are solely responsible for the level of tax arrears, particularly in times of recession. Yet the analysis supports the notion that high debt levels are at least one significant factor in determining a building's tax arrears. buildings with tax arrears distinct trend emerges when comparing buildings with mortgage claims to those without. In 1988 lis penden and non lis penden buildings had comparatively equal arrears levels per unit. But after 1988 arrearage in the lis penden buildings grew much faster. Mean arrears levels increased 330% for lis penden buildings, from $225 per unit in 1988 to $970 per unit in 1991. Arrears in buildings without mortgage claims rose only 68%, from $235 to $400. Coupled with this rise in arrears is a corresponding rise in debt levels. The mean debt level of a lis penden building rose 97%, from Mortgage Foreclosure Actions If A $20,650 per unit in 1988 to $40,620 in 1991. Debt are overmortgaged as a group, as last years report concluded, then many buildings may be facing mortgage foreclosure actions. The RGB staff reviewed case files at the various county clerk's offices to determine the degree to which buildings are facing these actions. Sixty three buildings had at least one pending mortgage claim on their property, or 19% of the 333 building sample. Nearly one out of every three buildings in Manhattan had an outstanding claim.7 The incidence of lis penden status is lower in the other boroughs, from one out of every five buildings in Queens to one out of ten in Brooklyn. 6Due to the nature of the data, it is difficult to quantify this relationship of the ratio variable and mortgage debt. It is possible to look at individual years but not to make cross year comparisons. In every year but 1988 a statistically significant association was found between the ratio variable and mortgage debt. The most pronounced year was 1990, where a building with no mortgage debt could expect an arrears to rent ratio of .65 while a building with $20,000 debt per unit could expect a ratio of .99. 7While Manhattan buildings only comprise 37% of the larger 333 building sample, nearly 60% of the lis penden buildings are located in Manhattan. burdens for buildings without mortgage claims rose 55% in the same period, from $12,000 to $18,620 per unit. In each year of observation, lis penden buildings had roughly twice as much of a mortgage burden as non lis penden buildings. Average Mortgage Debt per Unit, Lis Penden Buildings vs. Non-Lis Penden Buildings $50,000 $40,000 $30,000 Lis penden Buildings $20,000 $10,000 0 Non-lis penden Buildings 1988 1989 1990 1991 Source: RGB staff research with NYC Mortgage Deed System. 53 Owner Income and Expense It appears that the relatively large debt burdens Manhattan, high mortgages and the recession of their ability to pay taxes. which left them unable to make both tax and of lis penden buildings significantly affected Another striking finding in the examination of the lis penden subsample is that mortgages issued by banks constituted only a small proportion of the loans in default. Of the 45 loans reviewed, 28 were issued by private mortgage lending companies, 10 by private mortgage payments. Survey of External Conditions In the summer of 1993, the RGB staff individuals, and 7 by banks. It is difficult to undertook a survey of the external conditions of bank lenders. However, after comparing the order to determine the physical conditions of determine the cause for the prevalence of nonterms and interest rates in this subsample with the findings of the RGB's annual mortgage survey, one can definitely exclude the possibility that non-bank lenders were offering more attractive lending terms. In fact 41% of the mortgages reviewed had terms less than five years- the minimum term offered by banks in the annual mortgage survey. It is difficult to determine the precise resolution for all the foreclosure actions. In only ten instances (24% of the buildings with available all 333 buildings in the tax arrears subsample in these buildings. Last year's report determined that buildings with tax arrears had more housing code violations than other buildings. Yet the question remained as to whether this history of violations accurately reflected current building conditions. Without access to the interiors of these buildings, staff was only able to survey the exterior of the building and the following findings are in no way indicative of interior conditions.8 The survey found that, on the whole, the information) did an action force the indebted external conditions of the surveyed buildings resolution for the majority of cases reviewed and Nearly all of the buildings surveyed were owner to sell the property. There was no apparent in most instances the defendant still holds the deed. This lack of information suggests a loan modification or other agreement was reached between the lender and the owner but there are no guarantees that this is the case. In sum, mortgage debt was found to be one significant cause of tax arrears among stabilized buildings. There are other significant causes as well, indeed, some buildings in the tax arrears sample had no mortgage debt whatsoever. Nevertheless, large debt burdens were an important factor, particularly for buildings facing mortgage foreclosure actions. In these 54 the early nineties formed a powerful combination buildings, concentrated mostly in were only slightly worse than the citywide norm. occupied and few had walls or windows in poor condition. In fact several buildings appeared to have been recently renovated. Perhaps the most pronounced difference concerned the scarcity of commercial units - buildings with tax arrears had significantly less commercial space than their citywide counterparts. Almost all of the buildings are fully occupied and most of the units are in exclusively 8Twenty one buildings were not located or surveyed and one building had been demolished. This leaves the total number of buildings in the survey at 311. These 311 buildings contain a total of 6480 units, the number which was used to calculate all percentages. Tax Arrears in Rent Stabilized Buildings, 1994 External Building Conditions, Buildings in Arrears vs. Citywide Norms All Buildings 1991 HVS RGB Survey Condition of External Walls A. Missing bricks, siding, or other wall material ...........................1.9%.........................1.5% B. Sloping or bulging of outside walls.............................................0.5%.........................0.4% C. Major cracks in outside walls .......................................................1.2%.........................1.4% D. Loose/hanging cornice, roofing, or other material...................0.9%.........................6.4% E. None of these problems with the walls ....................................95.8%.......................91.2% F. Unable to observe walls.................................................................0.4%.........................0.1% Condition of Windows A. Broken or missing windows .........................................................2.6%.........................5.7% B. Boarded up windows.....................................................................2.1%.........................1.7% C. Loose window frames....................................................................0.6%.........................9.6% D. None of these problems with windows ....................................95.3%.......................85.9% E. Unable to observe windows .........................................................0.1%.........................0.0% Condition of Entrances and Exits* A. Broken or missing front door ........................................................... B. Broken or missing fire escapes......................................................... C. Entrances are not locked or secure.................................................. D. Broken or crumbling stoop............................................................... E. None of these problems with entrances or exits ........................... F. Unable to observe entrances or exits .............................................. ------- ......................1.0% ......................0.0% ......................9.6% .......................6.0% .....................85.9% ......................3.6% Note: Figures are percentage of units in buildings with observed conditions. A building may have more than one detrimental condition and thus categories may sum to more than 100%. Source: 1991 Housing and Vacancy Survey and 1993 RGB External Survey * No HVS information available for this category. residential buildings. Only 20% of the units are in difference, it appears, is that loose roofing is more figure significantly lower than the 32% of units city wide average. buildings which also have commercial space, a citywide as determined by Income and Expense data. As the table above indicates, the vast prevalent in buildings with tax arrears than the The overall condition of windows appears to be slightly worse among buildings with tax arrears. Nearly 10% of the units have majority of units are in buildings with exterior loose window frames as compared with 1% of the qualities. This finding is a bit lower than the 1991 missing glass panes compared with 3%. Yet walls in good condition, free from all detrimental city wide average, and 6% have broken or HVS figure9, but this is not a significant surprisingly there is a high incidence of modern survey appears, the original windows have been difference, given sampling errors and differing techniques. The one pronounced 9The evaluative categories employed in the RGB External Survey are the same that the HVS uses to assess exterior building conditions. windows as well; in over 40% of the units, it replaced. As expected, the condition of the surrounding buildings is worse in the poorest 55 Owner Income and Expense sections of New York: northern Manhattan, the southern Bronx, and northern and eastern Brooklyn. Units located on blocks with vacant or The mailing list for the survey was based boarded up buildings and vacant lots are almost on the 1993 tax arrears sample. This list was then units in the survey are located on blocks with no in order to obtain the owner addresses. To insure entirely located in these areas. Nearly 70% of all vacant lots or other problems mentioned, a finding similar to the citywide average. In sum, buildings with tax arrears are, to a small extent, in worse physical condition than buildings citywide. They have slightly more problems with walls and windows than other buildings. However the relative lack of commercial matched to a 1991 DHCR list of stabilized owners a response from a wide variety of owners, no more than two surveys were sent to the same owner even if that owner had multiple buildings on the list. More than three hundred usable surveys were returned, a response rate of almost 13%. The staff's initial concern was whether space emerges as the most pronounced difference the survey response was representative of the financially sound counterparts. location, the response group largely mirrored the between buildings with tax arrears and their more A central concern entire arrears sample. In building size and overall tax arrears sample. The median building size of the survey respondents is 11.5 units and Owner Survey the median size in the whole arrears group is a when studying buildings in arrears has to be the efficacy of various policies designed to aid the owners of these buildings. Yet before policies can be formulated, certain characteristics of these buildings and their owners must be known. These characteristics include the number of buildings a landlord owns, how aware owners are of city programs and regulations related to rental similar 11 units. The borough distribution of the survey responses were also fairly similar to the arrears group as a whole. However, the mean and median arrears levels for the survey respondents are lower than the citywide totals. Although the arrears values in the survey response exhibit the same trends that the citywide values doconstantly increasing, particularly after 1990- the values are also consistently lower. This difference in arrears levels between housing, what percentage of the rent roll is the respondents and the arrears group in general policy initiatives owners themselves believe the survey. Because the survey respondents are in typically uncollected and why, which particular would best help their buildings, and so on. A survey designed to answer these and other questions was first tested on 500 owners of rent stabilized buildings in arrears in February 1994. The results were intriguing but due to the small sample not particularly reliable. The survey was revised and 2460 surveys were mailed to owners in April. 56 Methodology & Response has certain implications for the interpretation of less dire financial straits than the general arrears group, the results of the survey may actually understate problems such as vacancy and collection losses, the inability to raise rents, the unavailability of financing, and so on. On the other hand, certain policy preferences expressed by the respondents may not reflect the choices of owners whose buildings are in even higher tax Tax Arrears in Rent Stabilized Buildings, 1994 arrears- owners of buildings with very high tax comparable. The length of unit vacancy was completely different policies than owners of buildings as opposed to the HVS data. In the arrears may believe their buildings warrant buildings with little arrears. much shorter, however, in the surveyed RGB survey, 32% of vacant units had been on the market for less than one month as opposed to Owner and Building Characteristics 12% of the vacant units in the 1993 HVS. Thus if The typical owner of a building in tax arrears owns the surveyed building and one or two other small buildings (perhaps a private residence). Some large owners did respond to the survey however, and thus while the median number of buildings owned is two, the mean these results are to be believed, buildings with arrears are less affected by long term vacancy than the citywide whole. Building Income High vacancy and collection losses are a number is four. The surveyed building had pressing problem affecting buildings with tax years- long enough for the owner to 'know' the potential rent roll remains uncollected due to been been owned for an average of twelve building thoroughly and sufficiently long that ownership extends throughout the entire arrears period of 1988-1994. One out of five owners was past the retirement age of 65. Only 6% of the owners employed an outside management company to run the building.10 This percentage, although small, is not unusual- 8% of the respondents to the staff's annual Price Index Survey employed outside management companies. The typical building is a pre-war 12-15 unit building. Often the superintendent or owner occupies one of the units and, on average, 8% of the units are rent controlled. The proportion of controlled units in these buildings is rather normal- in community districts with high levels of arrears, 8% of all units are rent controlled as well. The vacancy rate in these buildings was 4.6%, slightly higher than the citywide vacancy rate as determined by the 1993 HVS but roughly 1077% of the owners managed the building by themselves, and 17% had their own management company run the building. arrears; almost 20% of the average building's these losses. A 6% loss derives from vacancies and an additional 13.5% from an inability to collect rent from tenants. Further evidence of the severity of collection losses lies in the common claim among owners of large amounts of unrecovered rent. Almost seven out of ten owners state they have suffered at least $2500 of Percentage of Buildings Reporting Costly and Unusual Events in the Period 1988-93: Breakdown of a major building system, such as the boiler or roof, requiring repairs or replacement costing $2500 or more .......70% Unrecovered rent of $2500 or more from a single tenant ...............................................68% Legal fees or other unusual administrative cost in excess of $2500...............................40% Vandalism of common areas or apartments resulting in damage of $2500 or more....34% Fire damage to common areas or apartments resulting in damage of $2500 or more ...15% Source: RGB Survey of Rent Stabilized Owners, 1994. 57 Owner Income and Expense unrecovered rent from a single tenant in the past According to the survey, nearly half (44%) of the in multiple years. As the box (previous page) held by banks, another 19% had mortgages from six years. Many owners report this has happened indicates, unrecovered rent is a close second to major building repairs for the most cited major expense beyond maintenance costs. normal operation and Buildings with tax arrears cannot raise their rents as much as the guidelines allow and as much as buildings without tax arrears have been able to raise rents. The owners stated they can charge the full guideline allowances on 78% of renewal leases and 72% of vacancy leases. These figures translate into an annual rent increase non-bank mortgage institutions and the remainder (37%) had a mortgage held by an individual (usually the previous owner). That less than half of the mortgages came from banks is not surprising since information from the RGB Mortgage Survey indicates banks tend to lend to properties generally larger than 10 units with vacancy and collection losses averaging 5% of the potential monthly rent roll. The majority of buildings surveyed clearly do not fit that profile. Refinancing activity in the past year was below the RGB's Rent Index of 2.9%. Of course virtually non-existent for the surveyed buildings. rent able to reduce their mortgage debt through owners can raise rents through other means, but increases deriving from the guidelines are less then legally allowed. current Buildings with tax arrears have fewer commercial units than the citywide average and derive less income from them. About 28% of the units are in buildings with commercial space. Although this figure is greater than the 20% determined by the RGB's external conditions survey, it is still less than the 32% figure for the city as a whole. Only 4% of the buildings reported that they were refinancing and another 1% were able to renegotiate terms with their mortgage lender. This result is in stark contrast with the 1994 RGB Mortgage Survey which found that 23% of fixed rate mortgages were refinanced last year. What is to be done? Owners held diverse viewpoints when The commercial vacancy rate among the asked what single city initiative would most figure for all stabilized buildings but this seems that these buildings are in arrears implies that respondents was 22%- there is no comparable unusually high. Only 6% of building income was attributable to rent from commercial units, less than the 11% of income that the 1994 Income and Expense report determined for the citywide total. Debt improve the profitability of their building. The fact operating and maintenance costs may be too high. Consequently 40% of the respondents favored lower property tax rates or lower water & sewer rates. Another 30% favored establishing a "fairer and more efficient housing court", no doubt reflecting the impact that collection losses have on Seven out of ten buildings currently carry a mortgage. This tends to confirm the finding in last year's tax arrears study that over two-thirds 58 buildings with mortgages had those mortgages of the buildings with arrears have mortgages. these buildings. The third most popular choice was increased income through higher rent guideline allowances, favored by 25% of the respondents. Only 3% preferred an increased welfare shelter allowance and 2% listed reduced paperwork at Tax Arrears in Rent Stabilized Buildings, 1994 City Policy Options Preferred by Owners of Buildings in Arrears 3% 2% 30% Lower Property Taxes or Water & Sewer Rates 40% Increased Rent Guidelines Allowances Establishment of a Fairer and More Efficient Housing Court Increased Welfare Shelter Allowance Reduced Paperwork at Government Agencies 25% Source: RGB Survey of Rent Stabilized Owners, 1994. government agencies as their main concern. In favored a supplemental increase for low rent with tax arrears favor a curtailment of costs or term tenants, and 26% favored a supplemental general, we can conclude that owners of buildings reduced collection losses over an increase in rental income derived from higher rent guidelines. Two-thirds of owners with buildings in tax arrears believe that a targeted RGB initiative would improve the profitability of their buildings more than an increase in the general guideline allowances. Specifically, 41% of respondents apartments or a supplemental increase for long increase for small buildings (defined as 20 units or less). The other one-third of the owners favored general, non-targeted increases found in higher renewal and respondents vacancy favored allowances- higher lease 28% of renewal allowances and 5% favored higher vacancy allowances. RGB Policy Options Preferred by Owners of Buildings in Arrears 28% 26% Increased Lease Renewal Increased Vacancy Allowance 5% Supplemental Increase for Long Term Tenants or Low Rent Apartments Supplemental Increase for Small Buildings (20 units or less) 41% Source: RGB Survey of Rent Stabilized Owners, 1994 59 60 Emm a Rent Skewing Rent Skewing in Rent Stabilized Buildings, 1994 T he basic goal behind the creation of New standing regulated tenants pay much less rent the establishment of "fair" rents. Although effect "subsidize" their counterparts. According to York City's rent stabilization system was imprecise, the policy of "fairness" has directed the rent stabilization system towards pursuing three main objectives. The first is the establishment of rents that protect tenants from price gouging in the critics, these drawbacks seriously undermine the utility of controls as a means of making housing more affordable. The presence of "rent skewing" in New face of low vacancy rates. The second encompasses York's stabilized housing would seem to contradict expected by good faith (non-speculative) investors founded. However, this observation is based on the preservation of the returns reasonably in the city's rental housing market. The final objective is to establish rent adjustments in an even handed way guided by reference to legitimate public policy concerns. A common criticism of rent regulation is the "fairness" policy upon which the system was the assumption that skewing is a unique by- product of rent regulations, and is not common to all types of housing markets. Objective assessment of the equity of skewing in New York's stabilized housing requires knowledge of the presence and that such regulation increases rent inequities degree of skewing in the city's non-regulated "bargain rents" that induce tenants to occupy determine: a) the existence and extent of "skewing" among tenants. Controls arguably provide regulated units as long as possible, causing older, "empty nest" households to "over-consume" large dwellings which are better suited to the needs of younger, child rearing households seeking entry into the regulated sector. Regulations that do allow special rent increases for vacant units, such as New York's stabilization system, not only encourage housing markets. The purpose of this analysis is to within the city's stabilized sector as well as in the private market, b) the effects of "skewing" upon stabilized tenants as well as the city, and c) what actions the Rent Guidelines Board should undertake to either minimize or justify "skewing" within the stabilized system. These questions will be explored first long term occupancy, but also promote "rent through a review of existing literature on rent differently priced over time due to variations in housing markets. Analysis of two hundred and skewing", in which identical apartments become 62 than newcomers to the regulated sector, who in their turnover rates. Through this process, long skewing in both regulated and unregulated twenty rent stabilized buildings for the presence of Rent Skewing in Rent Stabilized Buildings, 1994 skewing within and between buildings will then housing supply and demand. Traditionally, urban more detailed examination of the factors which identical dwellings to differentials in location or be conducted. This analysis will be followed by a contribute to any skewing which exists within the stabilized system. theory attributed variations in rents among public utilities.1 However, there is a growing body of evidence for the existence of skewing in unregulated housing markets, whereby variations in lengths of tenure explain variations in rents Summary between identical apartments. Anthony Downs was among the first Review of existing literature provides authors to provide a theoretical explanation for both regulated and unregulated housing markets. Downs, ownership of America's rental stock is theoretical and empirical evidence of skewing in Statistical analysis of 1993 data from two hundred and twenty rent stabilized buildings as well as the cross-sectional data set of the 1991 HVS revealed statistically significant (non-random) skewing of rents for comparable apartments in both stabilized and unregulated rental buildings. Further examination revealed similar average annual "length of occupancy" discounts (one measure of skewing) for sitting tenants in both sectors, but generally higher average total discounts for tenants in stabilized units than for those in unregulated rentals. This was due to the tendency of tenants to occupy stabilized dwellings for longer periods than other rental units, particularly in Queens and the part of Manhattan lying below 110th Street. Statistical tests undertaken on the length of tenure in stabilized rent skewing in the private market. According to dispersed among thousands of small property owners, with more than 60% of all rental units situated in buildings with less than five dwellings. Small landlords, due to the limited size of their holdings, tend to be much more sensitive to the costs incurred from vacancies than to the rents they receive from their property. In effect, Downs believes that small building owners are usually "turnover minimizers", who prefer to keep their units continually occupied, instead of "rent maximizers", who are willing to constantly refurbish vacant units to attract the highest paying tenants.2 Given these attitudes, small landlords are willing to offer discounts to "good" (ie. responsible, well behaved) tenants on a continual basis rather than to risk the expense of vacancies. A number of empirical studies corroborate and other rental units revealed a significant (non- the existence of rent skewing in the unregulated status and length of occupancy. article written by Allen Goodman and Masahiro random) positive association between stabilized Kawai in 1985 for the journal "Land Economics". The authors found statistically significant levels of Literature Review rent skewing in eighteen out of of nineteen Literature on rent skewing is often associated with arguments housing sector. One of the most important is an against rent regulations, which claim that controls distort market mechanisms for efficiently allocating metropolitan housing markets across the United States. In this analysis, length-of-tenure discounts 1 Goodman and Kawai, Land Economics, May 1985, p. 93. 2 Weicher, John, et al., Rental Housing: Is There A Crisis?, p. 88-89. 63 Rent Skewing averaged 1.3% per year for units of similar quality shortages which make it harder to move from one declined by an average of 1.3% per year of Analyses that empirically examine tenant and location (ie. the rents of established tenants occupancy compared to those of new tenants in mobility in rent regulated cities present mixed discounts averaged eight dollars per month, which rent stabilization system, conducted in 1984, found comparable dwellings). The value of these equalled 3.7% of the rents charged to new tenants.3 Among other authors concerned with private market rent skewing, Ira Lowry mentions a study undertaken by the Rand Corporation of rental properties in Brown County, Wisconsin and St. Joseph's County, Indiana in 1976, which found that monthly gross rents decreased from estimated "market levels" by a mean value of 3.8% per year of occupancy.4 Another analysis conducted by Arthur D. Little in 1987 examined rent levels in cities with and without rent control and concluded that rents in all cities "...decrease with each year of additional occupancy".5 Many studies of rent regulated housing markets allude to rent skewing without exploring the issue in detail. Most link controls with reductions in tenant mobility, by claiming that below market rents encourage sitting tenants to occupy controlled apartments for extended periods results on this issue. One study of Los Angeles' that tenant mobility in both the city and its surrounding communities (which did not regulate rents at the time) substantially decreased between 1977 and 1984. On the other hand, the authors found that length-of-tenure discounts substantially increased in Los Angeles over the same period, (the city's rent stabilization system was enacted in 1979). Although discounts for tenants with less than two years of occupancy declined between 1977 and 1984, discounts for those with three to four years increased by 39% and those for renters with more than six years of residency nearly doubled. From these findings the authors concluded that, overall, long standing tenants reaped the greatest rewards from stabilization in Los Angeles, whereas recent movers and tenants with less than three years of residence received the least benefits.7 Another examination of rent regulation, of time, dramatically reducing turnover for some written in 1976 by Franklin James and Monica Lett, promote skewing over a period of years between Despite its lack of quantitative sophistication, units. Systems with special vacancy allowances dwellings that turnover frequently and those that do not. Anthony Downs elaborates on this point by observing that controls, in reducing the mobility of the initial occupants of controlled units, create analyzed New York's rent stabilized housing stock. James and Letts' analysis concluded that the average variation between the highest rents and the lowest rents charged for four different types of apartments was 20% higher in rent stabilized 3 Goodman and Kawai, p. 94-95. The authors go on to show 6 Downs, Residential Rent Controls: An Evaluation, p.21-25. less housing for every marginal increase in rents than do long Impacts and Alternatives, p.19-49. Average length-of-tenure in all other respects. from 4.2% in 1977 to 0.6% in 1984, those for tenants with 3-4 that, in the presence of rent skewing, recent movers "consume" term tenants, although their consumption patterns are similar 4 Weicher, et al., p. 30-31. 5 Arthur D. Little, Inc., Housing Gridlock in New York. May 64 controlled unit to another.6 1987, p.2. 7 Hamilton, et al., The Los Angeles Rent Stabilization System: discounts for tenants with 1-2 years of occupancy declined years of occupancy rose from 8.5% to 11.8% and those for tenants with six or more years of occupancy grew from 15.6% in 1977 to 30.1% in 1984. Rent Skewing in Rent Stabilized Buildings, 1994 buildings than in rent controlled buildings. The authors attribute this disparity mainly to the use of variable length leases, as well as vacancy allowances for unoccupied units, which they argue Statistical Analysis Examination of the presence and extent of will cause skewing to increase over time, skewing in New York's unregulated and stabilized To ameliorate this situation, James and samples. First, rents within "apartment lines" of particularly during periods of rampant inflation. Lett propose the exclusive use of one year leases, which, in their view, would prevent skewing from worsening over time.8 However, James and Lett ignore the crucial option of modifying or eliminating vacancy allowances as a means of either remedying existing skewing or dampening future rent disparities. Joel Brenner and Herbert Franklin's analysis of European rent controls also examines rent skewing, and provides a useful summary of strategies used to counteract it. Brenner and Franklin's discussion of skewing goes into greatest depth concerning Holland, where rapid inflation during the 1970's created great disparity in rents between new construction and older housing. They focus on two particular anti-skewing policies: a system of subsidies similar to HUD's Section 8 vouchers and a more recent attempt at "rent adaptation", whereby rents in older apartments are raised to levels comparable to new ones. According to the authors, the Dutch abandoned the former in the late 1970's, after rising inflation quickly devalued the subsidies paid out, opting instead to concentrate on "rent adaptation". This refers to a gradual re-alignment of rents in both old and new units, achieved through a series of slight rent increases in older dwellings combined with a new mortgage instrument, in which interest is spread evenly throughout the life of the loan to produce smaller monthly payments.9 8 James and Lett, The Economics of Rental Housing in NYC, p. 80-85. 9 Joel Brenner and Herbert Franklin, Rent Control in North America and Four European Countries, p. 28-37. rental stock required statistical analysis of two data 220 rent stabilized buildings obtained from the state Department of Housing and Community Renewal (DHCR) were analyzed to determine whether variation could be attributed to random chance or deeper structural causes. An "apartment line" represents a series of units which are vertically adjacent to each other, forming a vertical section of the property. These were chosen for analysis on the assumption that dwellings in a "line" are roughly similar in terms of size, number of bedrooms and internal layout, thus delivering Difference Between Highest and Lowest Rent Within Apartment “Lines”, Rent Stabilized Buildings, 1993 Rents 400 350 300 $376 250 $256 200 $194 150 100 $175 50 0 Manhattan Bronx Brooklyn Queens Note: The number of stabilized properties in Staten Island was too low to be statistically reliable. Source: NYC Rent Guidelines Board, 1994. 65 Rent Skewing “Length of Occupancy Discounts” in Rent Stabilized and Unregulated Rental Buildings, 1991 RENT STABILIZED BUILDINGS Annual Discount Location: Manhattan Manhattan Core Bronx Brooklyn Queens 2.6% 2.8% 1.3% 1.7% 1.6% Total Discount 23.4% 24.6% 11.4% 14.8% 16.2% UNREGULATED RENTAL BUILDINGS Annual Discount 2.6% 2.2% 2.0% 2.2% 2.0% Total Discount Note: The number of stabilized properties in Staten Island was too low to be statistically reliable. Source: NYC 1991 HVS roughly equal levels of "housing services" to differences in rents within apartment lines while without skewing, apartments within a line should variation within apartment lines. consumers (tenants). Theoretically, in markets have equal rents. In the DHCR sample, larger buildings tended to have greater observed Use of the 1991 HVS cross-sectional data considerable variation was observed in rents set, featuring detailed information on large highest and lowest rents (the "range") within a line allowed us to follow Goodman and Kawai's within "lines", with the difference between the averaging $242. Statistical tests on the range of rents within lines from the DHCR data revealed that the observed variation was not random, but emblematic of structural forces within the rent stabilization system. Thus, skewing between roughly equivalent stabilized units throughout numbers of stabilized and unregulated units, footsteps to estimate another measure of skewing, "length of occupancy discounts", within both the rent stabilized and private rental sectors. In this instance, "unregulated rental dwellings" included buildings of all sizes, as well as co-op units which were rented by their owners. Regression analysis New York is not a quirk of chance. The chart on the revealed that contract rents for units of similar lines in the DHCR sample for Manhattan, the associated with both location and the length of previous page shows the range of rents within the Bronx, Brooklyn and Queens. The simplicity of the DHCR data set precluded detailed insight into the factors behind skewing of rent stabilized rents beyond the fact that variance in rents between similar units (ie. units within the same line) was positively correlated with location in Manhattan and negatively correlated with building size. Thus, Manhattan addresses were linked to increased 66 10.7% 8.9% 12.1% 14.2% 11.0% size and quality in both markets were significantly occupancy of the sitting tenants. Further analysis allowed us to calculate the mean discount received for each year of tenure in both stabilized and other apartments, as well as the mean total discount received by tenants in each sector, both of which are shown in the table above. The term "Manhattan Core" refers to addresses below page 110th Street on the West Side and below 96th Street on the East Side. Rent Skewing in Rent Stabilized Buildings, 1994 The figures illuminate an interesting These findings prompted further analysis relationship between rent skewing and regulation of total level of skewing experienced by tenants in of occupancy, and thus the total amount of skewing status. It appears that the main factor behind the both markets is the length of tenure rather than the annual discounts offered to renters. This is starkly demonstrated in Manhattan and Queens, where mean annual discounts were roughly equal across the sectors, while mean total discounts were much higher in the stabilized market due to mean lengths of occupancy double those in the unregulated rental market. In both the Bronx and Brooklyn, mean annual discounts are higher in unregulated units while the mean total discounts are approximately similar due to longer tenure patterns among stabilized tenants. HVS data, to determine whether rent stabilization status significantly influenced length observed in the 1991 HVS sample. Additional regression analysis revealed a strong positive correlation between length of occupancy and rent stabilization status among households of similar income in units of similar location, size and quality. Thus, tenants in rent stabilized units have strong incentives to occupy their units longer than their counterparts in unregulated rental dwellings, particularly in Manhattan, and especially in the high rent "Manhattan Core". In turn, this significantly influences the total amount of skewing observed in the stabilized sector. Mean Length of Occupancy in Stabilized and Unregulated Apartments, 1991 Mean Length of Occupancy in Stabilized and Unregulated Apartments, 1991 Unregulated Years 10 8.9 8 8.8 6 4 2 0 Rent Stabilized 8.7 6.1 4.2 Manhattan 8.6 6.4 4 Man. Core Bronx 10 Brooklyn 5.7 Queens Note: "Man. Core" refers to the "Manhattan Core", defined as the area south Note: “Man. Core” refers to the “Manhattan Core”, defined as the area south of East 96th Street of E. 96 St. and W. 110 St.. and West 110th Street. Source: 1991 NYC Housing and Vacancy Survey. Survey Source: 1991 NYC Housing and Vacancy 67 68 Tenant Income and Housing Affordability 1993 Housing and Vacancy Survey Report Tenant Income and Housing Affordability secure incomes and pay very low rents, young Summary The period 1991 to 1993 was kind to neither tenant nor landlord. The deepening recession made it impossible for many landlords to raise rents as fast as the guidelines for stabilized apartments allowed. Indeed, charges for many high rent apartments were reduced. must pay much more for housing. Contract Rent Over the past few years the Rent Evidence Guidelines Board has heard an abundance of suggests that collection and vacancy losses of the long-running recession on the rental from the Board's Income and Expense Studies also soared, further reducing landlords’ rent revenue. Tenants fared poorly too. After a period of rising prosperity in the 80's, tenant income plummeted 10% in real terms. The median rent- to-income ratio for stabilized tenants also showed a substantial increase, from 25.8% in 1991 to 28.2% in 1993, the highest level in modern times. As if these grim statistics were not enough, the HVS also brings to light some other discouraging trends. testimony from landlords regarding the impact market. A number of these owners testified that market weakness had forced them to REDUCE rents, especially for high rent apartments. Other testifiers argued that the upsurge in unemployment also made it impossible to raise rents in the low end of the market. Low income tenants simply cannot afford higher rents; it would be irrational for landlords to raise rents when low income tenants cannot pay. The new HVS data shows that the Income inequality, which recession has restrained rent increases. Overall, continued to grow from 1991 to 1993. Rents for with the increases authorized by the RGB increased substantially during the eighties, low rent units increased much faster than for high rent units, thereby increasing the burden for many low income households. Finally, inequities within the rent stabilization system are distressingly high. While many long term or older tenants have 70 families have been hit hard by the recession and rents charged by landlords failed to keep pace between 1991 and 1993. However, weakness in the market has been almost entirely confined to the high rent sector. Rent increases for mid- and low-rent units have been substantial, despite declining tenants' income. 1993 Housing and Vacancy Survey Report Percent of Units 100% Change in Contract Rent For Units Stabilized in 1991 and 1993 Large Increase in rent No change/ Small increase Small Decrease Large Decrease 80% 60% 40% Two of five high rent units had rent decreases. 20% 0% $250 or less $251 - 500 $501 - 750 Rent in 1991 $751+ Note: A "large increase" is an increase of more than 7%, a "large decrease" is a decline of more than 7%. Source: 1991 and 1993 New York City Housing and Vacancy Surveys Rent Increases, 1991 to 1993 The mean average rent for stabilized units increased from $554 in 1991 to $593 in 1993, apartment increases and major capital improvements allowed by the DHCR). Thus the deficit between RGB sanctioned rent increases and those imposed by landlords is actually or 7%. For apartments which were rent stabilized somewhat greater than 1.1%. 6.6%.1 landlords to increase renewal leases by the full in both 1991 and 1993 the increase was only Although the increase in the mean average rent outpaced the Consumer Price Index, it lagged behind increases authorized by the Rent recession made it impossible Clearly, the for some amount of the guidelines or to charge a vacancy allowance. Average rents rose faster in the older Guidelines Board. The RGB's orders allowed a portion of the stock than in the newer. The mean Spring of 1991 and the Spring 1993, whereas while the Pre-war average rose 7.1%.3 7.7% increase in aggregate rent between the actual rents rose only 6.6%.2 At first glance the 1.1% difference between the two figures may seem slight, or even insignificant. However, it should be noted that the increase measured by the HVS includes rent hikes NOT authorized by the RGB (i.e. individual 1New construction, the transition of rent controlled units to stabilization, and other factors tend to raise the overall rent level in the stabilized sector each year independent of increases authorized by the RGB. The rent increase for apartments which were stabilized in BOTH 1991 and 1993 is the truest measure of landlords' ability to raise rents. average rent for Post '46 units was up only 5.8%, 2The 7.7% figure is from the RGB's rent index. The appropriate comparison here is units stabilized in both years (i.e. 1991 and 1993) since the RGB rent index is a measure of the impact of the Board's orders on the currently stabilized stock. The rent index only measures the impact of the RGB's orders on the stabilized stock. It does not consider the transition of units from the controlled sector to stabilization, the addition of new units to the stock, or the impact of individual apartment or MCI increases. Note that since the rent index is a measure of aggregate rent received by landlords the appropriate measure of comparison from the HVS is the mean average rent, not the median. 3Unless otherwise noted, rent increase figures refer to apartments stabilized in both 1991 and 1993 and reporting rents in both years. 71 Tenant Income and Housing Affordability In the boroughs, rent increases were during the last two guideline "seasons." It is clear The Bronx had the greatest increase in rents raise rents for apartments in the mid- to upper inversely correlated with economic well-being. (8.5%), followed by Brooklyn (6.9%), Manhattan (5.9%) and Queens (5.5%). The difference between rent increases in affluent and poor neighborhoods was particularly striking in Manhattan. While a high end of the rent distribution. The HVS figures also tend to rebut the assertion that landlords would not raise rents on low rent units because tenants simply couldn't afford to pay the increases. The overwhelming majority of low income area like the Upper East Side recorded a rent units posted rent increases. Many of these 12%. In the six southern Manhattan subboros information it is impossible to say if these 4% increase, rents in Washington Heights rose (i.e. the so-called "Manhattan Core") mean rents rose approximately 5% while the comparable figure for the four northern Manhattan subboros was 11%. If rents tended to rise faster in poorer neighborhoods, did low rent units record larger rent increases than high rent units? The chart on the previous page affirms the question - rents increased much faster in the low rent stock than in the high rent stock. Less than 15% of units with rents of $500 or less in 1991 recorded rent decreases compared to about 40% of units in the highest rent category. Conversely, less than 30% of the units in the upper rent categories had "large" rent increases while approximately 50-60% of the least expensive apartments recorded substantial increases. 4 This data confirms much of the testimony of building owners and managers heard by the RGB 72 that the recession DID make it very difficult to increases were substantial. Without additional increases were actually collected. Thus the "affordability" of these increases remains in question. Evidence of recent increases in collection losses suggests that some proportion of rent hikes may not have been collectible. In the beginning of this report we showed that the mean average rent for units stabilized in both 1991 and 1993 increased 6.6%. 4See Chart footnote for definition of "Small Decrease", "Large Decrease", etc. Increase in Mean Average Rent, 1991 to 1993, by Contract Rent and Occupancy Status in 1991 Rent in 1991 $500 or LESS Rent in 1991 OVER $500 New Tenant 1991-1993 No Move 1991-1993 New Tenant 1991-1993 No Move 1991-1993 0% 5% 10% 15% 20% Rent Increase Source: 1991 and 1993 New York City Housing and Vacancy Surveys 25% 30% 35% 1993 Housing and Vacancy Survey Report We have also demonstrated that many rents in Changes in the average rent for these the upper part of the rent distribution were categories are illustrated in the chart on the rent reductions, how was it possible for rents for MORE than $500 in 1991 saw an increase in reduced between 1991 and 1993. Given these overall to increase at nearly the pace that RGB guidelines allowed? One possibility is that landlords charged greater increases for low rent units and for recent movers (i.e. renters who moved between 1991 and 1993). To examine this possibility we separated apartments which were rent stabilized in 1991 and 1993 into four groups: 1. Rent in 1991 $500 or LESS, no change in occupancy 1991-1993. previous page. As a group, apartments renting rent of only 1% between 1991 and 1993. Although rents paid by recent movers rose slightly, there was no overall increase in rent for non-moving households. By contrast, increases were substantial for units which rented for $500 or LESS in 1991. The mean rent for continuously occupied units rose about 12%. The contract rent for newly rented apartments increased by nearly a third. Another way to look at this data is to 2. Rent in 1991 $500 or LESS, new renter break down the increase in landlords' aggregate 3. Rent in 1991 OVER $500, no change in unit. 1991-1993. 4. rent charges between 1991 and 1993 by type of More than 90% of landlords' increased occupancy 1991-1993. revenue came from apartments renting for $500 1991-1993. place shouldered most of the increase, recent Rent in 1991 OVER $500, new renter or less in 1991. Although tenants remaining in Mean Average Contract Rent in 1993 by Year Moved Into Apartment, Rent Stabilized Units 1991-93 Year Moved In 1987-90 1984-86 1981-83 1971-80 1961-70 1950-60 $0 $100 $200 $300 $400 $500 Mean Average Contract Rent in 1993 Source: 1993 New York City Housing and Vacancy Survey $600 $700 $800 73 Tenant Income and Housing Affordability movers paid a disproportionate share. While recent movers constituted about 30% of stabilized renters, they paid about 40% of the increased rent. Household Income Given the severity of the most recent recession, few household types were better off in 1993 than in 1991. Even so, some types of households fared better than others. The relative The mean income of rent stabilized households decreased by 3% between 1990 and 1992.5 In inflation adjusted dollars the decrease was 10%, the sharpest decline since the early 70's. It is clear that a deep recession and the accompanying increase in the unemployment rate were responsible for most of the decline in "winners" included households with significant non-employment income (e.g. the single elderly), households with older breadwinners, and households in the top 25% of the income distribution. The "losers" included younger families and those near the bottom of the income distribution. For many single elderly persons social tenant incomes. In 1990 the unemployment rate security is a primary source of income. Social large Consumer Price Index for some time, so it is was 6.8%. Two years later it stood at 10.8%. The increase in unemployment had a disproportionate impact on households with two or more wage earners. Not all of the drop in income was due to the worsening economy. Shifts in the security benefits have been indexed to the understandable that single elderly households fared relatively well during the recession. Their inflation adjusted income decreased by only 2%. Households categorized as "Adult" demographics of the rent stabilized population households (i.e. two or more adults with a non- change was a substantial decrease in the real income decrease of about 8%. also played a part. The most remarkable percentage of households with two or more adults but no children, the household type with the highest mean income. We estimate that changes in demographics and in the types of households which reported income elderly head, no children) fared the worst, with a Adult households are more likely than any of the other household types to include two wage earners. On average, they are also the most affluent of all households. The recession was particularly cruel to accounted for about 40% of the drop in younger households (ages 18 to 29), who lost stayed constant in the 1991 and 1993 HVS period. By contrast, householders aged 45 to 61 inflation adjusted income. If these factors had surveys, the real income decline would have been only 6%, rather than 10%. 5The 1991 HVS measured calendar 1990 income while the 1993 74 Winners and Losers HVS recorded 1992 income. nearly 20% of their income in the two year suffered a decrease of only about 1%. In the case of younger households, one suspects that unemployment played a major role. The old dictum "last hired, first fired" probably still holds true. 1993 Housing and Vacancy Survey Report In last year's report on the 1991 HVS we showed that low income households lost ground during the 80's - the constant dollar income of these households fell. In addition, since the "higher income groups did well during the eighties."6 income inequality increased, leaving poor families worse off in relative terms as well. Both low and high income households lost ground over the two years. The 25% of households with the highest incomes fared ground Decrease in Income low or moderate income households, income inequality increased in the stabilized sector, continuing the pattern of the 80's. Geographical Differences In general, the richer boroughs fared better than the poorer during the most recent Decrease in Mean Average Income (Constant Dollars) by Age of Householder, 1990-92 recession. In the Bronx, the city's poorest borough, real income of stabilized renters declined 11%. The decrease in Brooklyn (the second poorest borough) was 9%, while Manhattan renters' income (the most affluent) fell by only 3%. -5% The sole exception to this correspondence between affluence and changes in -10% income was in Queens. adjusted -15% -20% than income plummeted 13%. 62+ 45-61 30-44 Age of Householder in Inflation Queens These patterns are also apparent in levels of poverty and public 18-29 assistance. While poverty levels were Source: 1991 and 1993 New York City Housing and Vacancy Surveys fairly stable in Manhattan, the other boroughs experienced double-digit increases. The percentage of best; their constant dollar income declined by households receiving public assistance rose only poorest households fared next best, probably other boroughs. about 5% during the two year period. The due to a high proportion of single elderly 7% in Manhattan compared to 25 to 33% in the Why is it that stabilized renters in households who had relatively stable incomes. Manhattan fared so well? households (i.e. those in the second income households suffered less from job cutbacks and Worst off were low to moderate income quartile) whose income fell by approximately 12%. Since high income households lost less 6 See Rent Stabilized Housing in New York City, 1993 p. 64. Two factors were certainly at work. As we showed earlier, affluent other recession induced maladies. Manhattan has a very high share of the city's affluent renters. Demographics also played a role. In Manhattan about two-fifths of renters are single individuals, 75 Tenant Income and Housing Affordability compared to about one-fifth in the outer boroughs. Single adults lost less ground during forced many stabilized households onto the wage earners. receiving public assistance jumped from 18.4% in the recession than households with multiple The substantial drop in income in Queens is harder to explain. It is true that Queens has the highest percentage of households with two or more adults, but this cannot be entirely responsible for the large drop in income. Other, as yet undiscovered factors must also have been at work. In the city's community districts, it is difficult to make generalizations about changes in income. In general, affluent areas in welfare rolls. The percentage of households 1991 to 22.3% in 1993, an increase of more than one-fifth. Single parents with children fared particularly poorly. In 1991 slightly over half of these households were receiving public assistance, but by 1993 the figure was closer to two-thirds. Housing Affordability In previous sections of this report we Manhattan and Brooklyn appear to have gained showed that current dollar incomes of rent income fell in many low income neighborhoods continued to increase. The inevitable outcome ground or at least lost little. Inflation adjusted throughout the city. Poverty and Public Assistance One would expect a sharp decline in real incomes to produce a corresponding increase in households living below the poverty level. Such stabilized tenants fell while contract rents was a decrease in housing affordability. The median contract rent to income ratio increased from 25.8% in 1991 to 28.2% in 1993. Another measure of tenant burden, the aggregate share of tenant income spent on rent, increased from 22.2% to 24.5%. Although tenants paid substantially an increase did occur, as the percentage of more income on rent in 1993 than in 1991, the level rose from 24.6% in 1990 to 27.2% in 1992. equally by all income classes. While the average stabilized households living below the poverty This 1992 figure establishes a new high for the percentage of stabilized households below the poverty line. Poverty levels increased for all types of households, with the sole exception of the single elderly. Increases were particularly large for households with two or more adults but no children. The percentage of households below the poverty level also increased for all age groups. Once again, the elderly were affected the least as poverty levels grew only slightly. 76 The increase in joblessness and poverty increase in the rent burden was not shared rent to income ratio for the bottom three income quartiles rose substantially, the highest income quartile (e.g. the fourth of renters with the highest incomes) saw virtually no change in their rent burden. For these renters a decrease in income was matched by a decrease in rents, thereby keeping the proportion of income spent on rent nearly unchanged. Renters in Manhattan fared much better than tenants in the outer boroughs. Increases in rent were smaller in Manhattan, as were 1993 Housing and Vacancy Survey Report decreases in income. As a result, the rent to income ratio grew about half as fast as in the rest and the rate (3.3%) were identical in both years. Given recent economic conditions it of the city. would be natural to suspect that most of the drop households' finances was particularly severe. stock, The effect of the recession on younger The rent-to-income ratio of household heads aged 18-29 rose from 26% to 31% in two years, by far the largest jump. Among the household types, single adults with children had the greatest increase in rent burden while the increase for the elderly was the smallest. Once again, the middle-aged and elderly fared much better than younger households. in Manhattan vacancies was in the high rent which had become unaffordable. However, this was not the case. Although the number of units with asking rents of $1000 or more did decrease from 1991 to 1993, there was also a substantial reduction in the number of low and moderate rent units available for rent. It appears that two separate trends may have been at work to decrease the Manhattan vacancy rate. As the recession made housing less affordable, the lowest rent units disappeared from the market - the number of available units Vacancies with asking rent of less than $500 was nearly halved from 1991 to 1993. In addition, it appears The overall rental housing vacancy rate decreased from 3.8% in 1991 to 3.4% in 1993. In that landlords probably reduced asking rents for the highest rent units. In an earlier portion of this report we the rent stabilized sector the decline in the showed that a significant proportion of renter 1991 to 3.4% in 1993.7 All of the decrease in forces were certainly at work in the market for vacancy rate was slightly greater - from 3.9% in vacancies occurred in the Pre '47 stock; the vacancy rate in the Post '46 sector remained unchanged.8 The decline in the overall vacancy rate was due entirely to a sharp reduction in the number of empty Manhattan apartments. In 1991 the vacancy rate in Manhattan was 5.0%. Two years later it had fallen to 3.5%. In the outer boroughs both the number of vacancies (21,000) 7The vacancy rate for rent stabilized housing can be computed on an adjusted basis, taking into consideration rent controlled units which would become part of the stabilized stock on vacancy. Using this method would lower the vacancy rate from 3.5% in 1991 to 3.1% in 1993. 8The vacancy rate for Pre '47 housing was 4.5% in 1991 and 3.7% in 1993. The rate for the Post '46 stock was basically unchanged - 2.25% in 1991 and 2.35% in 1993. occupied units had rent reductions. The same vacant units, as the mean average asking rent in Manhattan declined from approximately $850 in 1991 to $810 in 1993. Affordability of Vacant Units As we have seen, the rental market tightened slightly from 1991 to 1993. Fewer vacant units were available to prospective renters. The decline in available units was due entirely to a drop in the number of empty Manhattan apartments. The decline in vacant apartments in Manhattan was a function of the relative stability of renters' incomes in that borough and somewhat reduced asking rents. 77 Tenant Income and Housing Affordability Net Rental Vacancy Rate, Stabilized Units, 1981-1993 4% 3.5% 3% 2.5% 2% 1981 1984 1987 1991 Source: New York City Housing and Vacancy Surveys, 1981-1993 How affordable were the asking rents of In 1991 about 41% of units for rent had apartments in 1993 compared to offerings two asking rents in the top quartile (versus 25% of affordability is to compare the average asking rent were running far ahead of rents for occupied years earlier? The simplest way to measure with the average tenant's income. Using the median rent and income, affordability declined slightly. Substituting the mean tenant income and the mean asking rent, affordability improved slightly. In short, the results are ambiguous and do not indicate much change in affordability. occupied units), indicating that asking rents units. In 1993 the figure for the top quartile had declined to 31% - far fewer high rent units were available. The rent distribution of vacant units had become much more like the distribution for occupied units. While the number of high rent units for Another way to approach the question is rent declined substantially from 1991 to 1993, the vacant units with rents actually paid by existing unchanged. From the perspective of low and to compare the distribution of asking rents for tenants, using rent quartiles.9 This method enables us to measure the disparity between asking rents and rents actually paid by tenants. 78 1993 9 In this approach we divide the rents of occupied units into four groups of equal size. The first quartile consists of the fourth of units with the lowest rents and the fourth quartile is the fourth of units with the highest rents. The rent cutoff points of these quartiles are then compared to the vacant rent distribution. number of low and moderate rent units was moderate income households the market looked fairly similar in 1991 in 1993, if slightly less affordable. For high income renters in 1993 there were fewer units to choose from. However, it seems likely that other high income renters benefitted from intervening years. declining rents in the 1994 Tenant Income and Affordability Study 1994 Tenant Income and Affordability Study While employment in New York’s Summary Employment economy in New York has continually declined since the late 1980’s, when the onset of a deep national recession combined with the stock market crash of 1987 stalled the city’s economic growth. Joblessness in the city soared from 4.7% in 1988 to 10.8% in 1992, as hundreds of large and small firms reduced their payrolls to remain solvent. Recent surges in output and job creation during the latter half of 1993, which reduced national unemployment to a three year low (6.4%), have spurred some hope for renewed job growth in New York. Although unemployment in New York fell by sixth-tenths of a percent (from 10.8% to 10.2%) in 1993, this reflected a decrease in the city’s labor force from 56.3% to 55.4% of the work aged population rather than substantial new job growth.1 Data from the State Department of Labor indicates that the city’s unemployment rate rose to 10.4% during the first quarter of 1994, due to contraction in the construction, manufacturing and wholesale sectors. 1 In 1993, New York’s work force shrank by 95,000 people, resulting in the modest unemployment “drop” described in this report. New York Post, December 21, 1993, p. 12. has stagnated in recent years, productivity has risen. The Office of the Deputy Mayor for Finance and Economic Development estimates that the city’s real (inflation adjusted) gross city product grew by 4.1% in 1992, the largest increase witnessed since 1986. Financial and corporate service firms have experienced the greatest productivity gains by using advanced New York City Average Unemployment Rate, 1988-1994 12% 10% 8% 6% 4% 4.7% 5.8% 6.8% 8.6% 10.8% 10.2% 10.4% 2% 0 1988 1989 1990 1991 1992 Editor’s Note: Since the publication of this report the average unemployment rate dropped to 8.2% in August 1994. 1993 1994* *Note: 1994 figures represents data only for January, February and March Source: NYS Department of Labor. 79 Tenant Income and Housing Affordability technology to generate increased revenues and wages earned by city residents) overall gains in comprised of more skilled, highly paid managers sectors starts to rise. profits with a smaller, more efficient work force employment are unlikely until hiring in these key and fewer lower skilled clerical and support Nonagricultural employment in New Many economists expect the trend York continued to drop during 1993, but at a and profits to continue well into the next decade. 1992. As the chart below shows, while New York staff.2 lower rate than experienced either in 1991 or towards fewer employees generating larger sales lost 10,000 total jobs over the past year, the city’s Because New York’s financial and service sectors construction, manufacturing, transportation and pay disproportionately well (in 1991, the financial sectors experienced much less job securities industry alone employed 4% of New erosion than in previous years. Growth in service York’s total work force, yet paid 10% of the total sector employment (26,000 positions) buoyed total private employment, causing a net decline 2 Stephen Prokesch, “Service Jobs Fall as Business Gains”, of only 2600 jobs in the private sector. On the New York Times, April 18, 1993, p.43. Average Annual Change in NYC Payroll Employment by Industry, 1990-1993 Total Change Year 1990 1991 1992 1993 30 Employment (000's) 20 10 Employment ............................. -41,900 ............................-191,000 ............................. -90,000 ............................. -10,000 0 -10 -20 -30 -40 80 Source: U.S. Bureau of Labor Statistics 1990 1991 1992 Government Services Finance Trade Transportation Manufacturing -60 Construction -50 1993 1994 Tenant Income and Affordability Study to contract, eliminating 7600 jobs in 1993 due to Change in Real Income and Rents, Rent Stabilized Households, 1990-1992 municipal governments. While this data may Rents fiscal retrenchment within both the state and signify New York’s emergence from its long recession, preliminary employment figures for the first three months of 1994 cast doubt on this assumption. This information indicates large job cutbacks in the city’s construction, manufacturing and wholesale sectors which, combined with little growth in service employment, has produced a net loss of jobs. How much of this current decline is attributable to seasonal factors cannot be determined. 4% 2% 0% -2% -4% -6% -8% -10% -12% Income and Rents -14% In the past, without the availability of up-to-date information from New York’s Housing and Vacancy Survey (HVS), staff was Income Percent Change other hand, New York’s public sector continued 1st (Poorest) 2nd Quartile Quartile Income: -4.8% Rent: -4.1% 3rd Quartile Source: 1991 and 1993 HVS 4th (Wealthiest) Quartile forced to use less targeted data to gauge of 10.3% from the 1990 real average of $29,896.3 tenants. This year we were able to compare the equally among rent stabilized tenants. Grouping 1993 HVS. categories (quartiles), as shown in the box below, shifting income patterns among rent stabilized findings of past HVS data with the current In 1992, the average real (inflation adjusted) income for all stabilized tenants was $26,819. This represented a substantial decrease Change in Real Average Income, Rent Stabilized Households, 1990-1992 Income Quartile First (Poorest) 1990 - 1992 - 8.5 % Second - 12.3 % Fourth (Wealthiest) - 4 .8 % Third - 10.1 % Source: 1991 and 1993 HVS Erosion of income was not shared stabilized households into four income illustrates this disparity. This pattern may reflect heavy job losses among New York’s “pink” and “white” collar work force, as well as on-going employment decline in the city’s manufacturing industries between 1990 and 1992. While household income has recently declined in rent stabilized households, rents have risen. According to data from the 1991 and 1993 HVS, the mean average contract rent in stabilized units grew by 7% between 1991 and 1993. These increases have primarily affected lower income households, as the chart above shows. 3 Inflation adjusted figures in constant 1990 dollars. 81 Tenant Income and Housing Affordability Public Assistance Recipients - AFDC and Home Relief Grants, Fiscal Years 1989-94 1200 1000 (000's) 800 AFDC Home Relief 815 860 937 1000 1089 1104 600 400 200 0 1989 1990 1991 1992 Note: The AFDC category includes Predetermination Grant (PG - ADC) recipients. Source: Mayor's Management Reports 1994* *First 4 months Declining incomes and increasing rents jobs in the city is shrinking faster than the ratio for stabilized units to grow significantly, positions in the financial and service sectors.4 have forced the median contract rent-to-income from 26% in 1991 to 28% in 1993. Lower income stabilized households appear to have suffered most from this increasing rent burden, as the rent and income data in the chart on the previous page illustrates. Although their income did not erode as quickly as that of more affluent households, the poorest stabilized households suffered the most between 1990 and 1992 because they faced the highest rent increases with the least amount of “disposable” income on hand to divert from nonessential items to housing costs. Low Income Renters Among the worst dilemmas facing New 82 1993 York is that the number of low paying, unskilled creation of highly paid, skilled managerial Given this situation, it is logical to assume that low-income households are disproportionately affected by declines in employment and income. In late 1992, public assistance recipients in New York numbered over 1,000,000. One year later, the number of people receiving public 4 While total employment decreased by about 8.5% from 1987 to 1991, data in a New York Times article on April 18, 1993 showed that the number of clerical jobs in the city dropped 12% over the same time period. Many industries have increased employment in the professional and executive positions while decreasing the number of trainees and junior professional positions. Further evidence of this trend was provided in an article published in the New York Post on August 1, 1991, which stated that the number of entry level jobs in New York decreased while the number of higher paying jobs stayed relatively stable. 1994 Tenant Income and Affordability Study assistance grew by 8.9%, as shown in the chart According to documentation in the on the previous page. Estimates for the first Mayor’s Management Report, New York is increase from the 1993 total. While part of this the Emergency Assistance Rehousing Program, four months of 1994 indicate an additional 1.4% combating homelessness in many ways. Through increase can be traced to larger numbers of the city has continued its efforts to relocate individuals with AIDS-related illnesses, the families from the shelter system to permanent bulk of this case load stems from economic conditions. Approximately 5700 families housing. During the first four months of the 1994 Fiscal Year, the Human Resources Administration were (HRA) successfully relocated over 1,599 families housed in temporary city shelters by the end of to permanent housing, a 6% increase compared to 1993, an increase of 8.9% since the end of 1992. the same period in Fiscal 1993. The city also plans Over the first four months of 1994, this figure to increase its voucher program for homeless has fallen to 5560 families, which is still greater families who agree to participate in the New than the number temporarily housed at the York City Housing Authority’s Family Self- start of 1993. Sufficiency Program. Non-Payment Petition Filings and Case Intakes in NYC Housing Courts, 1983-1993 Intakes 400 Filings 350 Thousands 300 250 200 150 100 50 Note : These figures account for case restorations Source: New York City Civil Court 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 0 83 Tenant Income and Housing Affordability Possessions and Evictions Performed by City Marshals, 1969-1993 30,000 25,000 20,000 15,000 10,000 5,000 0 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 Source: NYC Department of Investigation, Bureau of City Marshals payment and eviction proceedings has not Housing Court Actions and Evictions paralleled the sharp rise witnessed during the last recession of the 1970’s and early 1980’s. As shown in the chart on the previous Long term trends in housing court page, non-payment petitions have remained flat Court from 289,000 in 1992. Case intakes, reflecting actions and evictions reflect, for the most part, economic and institutional forces. proceedings are costly and time consuming. In a loosening housing market where the benefit of a vacancy is declining, the incentive for owners to work out resolutions with late paying tenants is heightened. At the same time, new housing opportunities for those who can afford them may reduce the number of tenants forced to hang on until an eviction is secured. Whatever the explanation, the effect of this recession on non84 93 for several years, rising slightly to 295,000 in 1993 non-payment actions noticed for trial (less restorations), have risen for the past six years, from a low of 77,000 in 1987 to 124,000 in 1993. In general, it seems that fewer tenants are able to resolve non-payment actions prior to court appearances. Despite this, as the chart above shows, the number of evictions fell to 21,900 in 1993, a slight (.5%) decrease from the 22,000 carried out in 1992. Emmsm w?msom Housing Supply Housing Supply The largest increase in construction New Construction and Tax Abatements activity came in Manhattan, where 1150 new units were authorized, triple last year's level of 370. Brooklyn also showed a dramatic Housing Permits increase in 1993, up to 1015 units from 645 in The number of units authorized by new building permits for construction increased for the first year since 1989. Units authorized rose 33% to 5170 from a post war low of 3880 in 1992. Units Authorized for New Construction, 1988-93 12000 Staten Island Manhattan Brooklyn 8000 Bronx 6000 unchanged. About 1700 units (30% of the total) authorized in 1993 were in structures units authorized in Manhattan, a quarter of the units both in the Bronx and Queens, and 6% of Brooklyn units. All the units authorized in Staten Island were in one or two unit structures. J-51 exemption program are a measure of the level of rehabilitation activities in existing buildings. Tax abatements are issued for major capital improvements, moderate rehabilitation requiring 2000 86 in the Bronx and Staten Island was virtually Figures on the J-51 tax abatement and 4000 0 530 from 350. The number of units authorized containing five units or more. This includes all Queens 10000 1992. New units in Queens also increased to the replacement of at least one building system, 1988 1989 1990 1991 1992 1993 Source: Bureau of the Census, Construction Statistics Division and gut rehabilitation. In 1993, there were decreases in both the number of units receiving J-51 tax abatement benefits and the dollar amount of certified reasonable costs. Housing Supply The number of units receiving J-51 tax abatement benefits decreased 15% in 1993 from 144,000 to 122,000 units. The dollar amount of certified reasonable cost for these J-51 units decreased from $224 million to $169 million. This decrease in benefits is probably related to the economic slowdown in the early nineties. Because buildings cannot apply for J-51 benefits until after construction and rehabilitation is complete, the amount of J-51 abatements usually lags several years behind the level of economic activity. It should be noted that certified reasonable costs approved by HPD’s Office of Development are approximations of the actual rehabilitation costs. In most cases, the tax abatement received is based on 90 percent of the total certified cost. Even though two-thirds of the units Number of Units Receiving J-51 Tax Abatements, 1989-93 Thousands 160 140 120 100 80 60 40 20 0 1989 1990 1991 1992 Source: NYC Department of Housing Preservation and Development, Office of Development 1993 Assuming there is a direct relationship receiving J-51 tax abatements were located in between the amount of tax abatement benefits abatements from these two boroughs constituted units in the Bronx and Brooklyn saw greater Manhattan and Queens, the dollar amount in tax only 50% of the total. The average tax abatement benefit is about $1300 per unit in Manhattan and $700 in Queens. Total Certified Reasonable Costs for J-51 Tax Abatement, 1989-93 Millions $250 improvements than units in Manhattan or Queens. The average tax abatement benefit received in the Bronx is about $2400 per unit, almost twice as high as the Manhattan average. Building improvements in Brooklyn ranked in between Manhattan and the Bronx at $1700 per unit. 421-a $200 One indicator of new multi-family units $150 entering the housing market is the number of preliminary 421-a certificates issued by HPD’s $100 Office of Development. The number of units $50 $0 received and the level of rehabilitation activity, receiving 421-a certificates in 1993 fell 65% from 1989 1990 1991 1992 2650 to 910 units, the lowest number in recent 1993 Source: NYC Department of Housing Preservation and Development, Office of Development years. The number of units in the Bronx and Brooklyn receiving 421-a certificates accounted for 80% of the city total. The number of units in 87 Housing Supply Units in Buildings Receiving Preliminary Certificates for 421-a Tax Abatements, 1987-93 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1987 1988 1989 1990 1991 1992 Source: NYC Department of Housing Preservation and Development, Office of Development Queens constituted 17% of the city total while through sales or rehabilitations of vacant Manhattan had only 3% of all units receiving buildings. The number of occupied buildings in last year when Manhattan constituted more than The total number of in rem units 421-a certificates. This is in marked contrast to 50% of the city total. In Rem Housing and Tax Foreclosure In Rem Housing The number of buildings in the city’s Central Management in rem stock continued to decline in fiscal year 1994, falling from 5180 in 1993 to 5030.1 Vacant buildings decreased from the in rem stock has remained relatively stable. decreased by nearly 5% in fiscal 1994. Again most of the decrease in units was due to the reduction in vacant buildings. The number of units in habitable buildings declined by only half as much as the decline in units in vacant buildings, thus underscoring the focus placed on rehabilitating vacant buildings in the in rem stock. Tax Foreclosure The city chartered an In Rem Tax 2085 to 1945 during this period, accounting for Foreclosure Release Board in 1991 to approve to The Mayor’s Management Report (September performed by the Board of Estimate. After a most of the decline in city ownership. According 1993), the city has reduced its in rem stock largely 1 Alternative management programs held an additional 470 buildings. 88 1993 redemption applications, a task formerly multiple dwelling falls in tax arrears for at least one year, the city is entitled to initiate foreclosure proceedings. While the city may be legally entitled to a judgment of foreclosure three Housing Supply months after the commencement of the proceedings, such judgments are typically sought about one year after proceedings are initiated. The judgment entitles the city to obtain title to the property. The owner may redeem the property as of right, by paying what is owed to the city within four months of the city obtaining title. However if the property owner wishes to redeem the property during the following 20 slightly overstated since a large vesting in Brooklyn is soon expected. Since there is a considerable lag of at least 16 months between failure to pay taxes and vesting, the explanation for the decrease in vesting activity is unclear since vestings in 1994 would most probably reflect the downturn in the real estate market from a few years prior. Recent vestings have targeted larger months, the owner has to apply for discretionary buildings than the previous few years. In fiscal Release Board. The vesting statistics shown in the buildings appropriated by HPD’s Office of redemption with the new In Rem Foreclosure graph (pg. 86) are the actual number of buildings vested by the city. More buildings were vested in fiscal 1993 (486) than in any year since 1986.2 Through three quarters of this fiscal year, only 119 buildings have been vested, a drop of 75% from last fiscal year’s total. The actual drop on the year may be 2 Figures for FY93 and FY94 are preliminary and subject to verification. 1991 and 92, the average number of units in Property Management was 8, compared to 11 units in fiscal 1993 and 94. Residential Co-op and Condominium Activity The overall level of co-op and condo construction and conversion activities fell for the fifth straight year to a low of 58 plans accepted for In Rem Central Property Management, Units, Fiscal Years 1988-94 Units in Vacant Buildings Occupied Units in Habitable Buildings 80,000 Unoccupied Units in Habitable Buildings 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 FY88 FY89 FY90 Source: Mayor's Management Reports, 1988-94 FY91 FY92 FY93 FY94* * First four months 89 Housing Supply HPD Vestings of Multiple Dwellings, Fiscal Years 1985-94 1,000 900 800 700 Buildings 600 500 400 300 200 100 0 FY 85 FY 86 FY 87 FY 88 Source: Department of Housing Preservation and Development, Office of Property Management filing in 1993. This represents a 55% decrease from 1992’s level of 130 plans. Most of the decrease was due to a sharp drop in the number of HPD sponsored plans. Of these 58 plans, 65% (37 plans) were for new construction, accounting for 775 units. Thirty of these new construction plans were for Brooklyn and Manhattan. Approximately one quarter (15) of the accepted plans were HPD sponsored conversions, a large decrease from last year when 87 accepted plans were HPD sponsored. Only 7% of all plans were private co-op and condominium conversions under a non-eviction plan. All of these were in Manhattan. There were two private conversions 90 with evictions, both in Manhattan. FY 89 FY 90 FY 91 FY 92 FY 93 FY 94* * As of January 18, 1994 Co-op and Condominium Plans Accepted for Filing, 1986-93 900 HPD Sponsored Plan Eviction Plan 800 Non-Eviction Plan 700 New Construction 600 500 400 300 200 100 0 1986 1987 1988 1989 Source: NYS Attorney General’s Office. 1990 1991 1992 1993 92 Appendix A: Guidelines Adopted by the Board Appendix A: Guidelines Adopted by the Board A1. Apartments & Lofts On June 20, 1994, the Rent Guidelines Board (RGB) set the following maximum rent enters rent stabilization within the guidelines period (from October 1, 1994 to September 30, 1995). Any increase for a renewal lease as well increases for leases commencing or being as any for the vacancy allowance may be before September 30, 1995 for rent stabilized guideline period. renewed on or after October 1, 1994 and on or apartments: One-Year Lease 2% Two-Year Lease 4% A supplemental adjustment of $15 per month may be added for apartments renting below $400 as of September 30, 1994 and located in buildings containing thirty dwelling units or less. For tenants entering new leases the increases are the same as renewal leases, except collected no more than once during the For Loft units that have met the legalization requirements under Article 7-C of the Multiple Dwelling Law, the Board established the following maximum rent increases for leases commencing or being renewed on or after October 1, 1994 and on or before September 30, 1995 for rent stabilized apartments: One-Year Lease 2.5% Two-Year Lease 4.5% Leases for units subject to rent control 1) where the rent charged and paid on on September 30, 1994 which subsequently additional 5% over the rent charged on system are not subject to the above adjustments. September 30, 1994 is less than $1000, an September 30, 1994 may be added; or 2) where the rent charged and paid on September 30, 1994 for apartments renting for less than $400 and located in buildings containing thirty units or less, an additional 10% may be charged. No vacancy increase is permitted if the rent is $1000 or more. Under Order 26, owners will be permitted to collect the vacancy allowance if vacancies occur during consecutive guideline periods; that is, even if a vacancy allowance was collected for the same unit under the previous order. No vacancy allowance can be taken under Order 26, however, if the apartment first become vacant and then enter the stabilization The rents for these newly stabilized units are subject to review by the New York State Division of Housing and Community Renewal (DHCR). In order to aid DHCR in this review the RGB has set a special guideline of 40% above the Maximum Collectible Rent paid by the prior tenant or 35% above the Maximum Base Rent, whichever is greater. A.2 Hotel Units On June 20, 1994, the RGB set a maximum allowable increase of 2% over the 93 Appendices lawful rent actually charged and paid on September 30, 1994 for residential lodging houses, rooming houses, Class B hotels, single following conditions exist: room occupancy and Class A residential hotels. 1) The building contains 20 or more commencing or being renewed on or after units have been withheld from the rental The allowable increases will apply to leases October 1, 1994 and on or before September 30, 1995. The guidelines do not limit rental levels for commercial space, non-rent stabilized residential dwelling units and 10% or more of the market for a period exceeding thirty days unless the owner can show a reasonable basis for the withholding; or units, or transient units in hotel stabilized 2) 20% or more of the dwelling units in the Single room occupancy buildings, Class B Division of Housing and Community buildings. hotels, rooming houses, and lodging houses will not be entitled to the increase and will receive a 94 zero percent adjustment if either or both of the building are not registered with the State Renewal pursuant to part 2528 of the Rent Stabilization Code. Appendix B: 1994 Price Index of Operating Costs Appendix B: 1994 Price Index of Operating Costs B.1 PIOC Sample, Price Quotes per Spec, 1993 vs. 1994 Spec Description 1993 1994 211...........Apartment Value............................................115 ...........125 212 ..........Non-Union Super*...........................................61 .............82 216 ..........Non-Union Janitor/Porter*............................46 .............45 LABOR COST.................................................222 ...........252 301 ..........Fuel Oil #2.........................................................39 .............38 302 ..........Fuel Oil #4.........................................................13 .............12 303 ..........Fuel Oil #6...........................................................9................9 FUEL COSTS ....................................................61 .............59 501 ..........Repainting.......................................................125 ...........126 502 ..........Plumbing, Faucet.............................................32 .............33 503 ..........Plumbing, Stoppage........................................30 .............30 504 ..........Elevator #1 ........................................................11 .............10 505 ..........Elevator #2........................................................12..............11 506 ..........Elevator #3........................................................12 .............14 507 ..........Burner Repair ...................................................19..............11 508 ..........Boiler Repair, Tube ..........................................13 .............10 509 ..........Boiler Repair, Weld............................................9................7 510 ..........Refrigerator Repair............................................5................5 511...........Range Repair ....................................................10 .............12 512 ..........Roof Repair .......................................................26 .............26 513 ..........Air Conditioner Repair.....................................5................5 514 ..........Floor Maint. #1.................................................10................7 515 ..........Floor Maint. #2.................................................10................7 516 ..........Floor Maint. #3.................................................10................7 518 ..........Linen/Laundry Service ....................................6................5 CONTRACTOR SERVICES .........................345 ...........326 601 ..........Management Fees............................................42 .............45 602 ..........Accountant Fees...............................................29 .............29 603 ..........Attorney Fees ...................................................29 .............26 604 ..........Newspaper Ads ...............................................18 .............18 605 ..........Agency Fees........................................................5................5 606 ..........Lease Forms ........................................................5................7 607 ..........Bill Envelopes ...................................................11 .............10 608 ..........Ledger Paper ......................................................6................5 ADMINISTRATIVE COSTS ........................145 ............145 Spec 701 Description 1993 1994 INSURANCE COSTS ...................................443 ............523 801 ..........Light bulbs ..........................................................7................5 802 ..........Light Switch........................................................7................5 803 ..........Wet Mop ..............................................................5................6 804 ..........Floor Wax ............................................................5................5 805 ..........Paint....................................................................11..............11 806 ..........Pushbroom..........................................................6................8 807 ..........Detergent.............................................................5................5 808 ..........Bucket ................................................................12 .............12 809 ..........Washers..............................................................13 .............12 810 ..........Linens.................................................................12 .............10 811...........Pine Disinfectant................................................5................7 812 ..........Window/Glass Cleaner....................................7................6 813 ..........Switch Plate ........................................................6................7 814 ..........Duplex Receptacle .............................................5................6 815 ..........Toilet Seat ..........................................................13 .............12 816 ..........Deck Faucet.......................................................13 .............10 PARTS & SUPPLIES......................................132 ...........127 901 ..........Refrigerator #1 ...................................................5................6 902 ..........Refrigerator #2 .................................................10 .............10 903 ..........Air Conditioner #1 ............................................6................5 904 ..........Air Conditioner #2 ............................................7................5 905 ..........Floor Runner.......................................................9 .............12 906 ..........Dishwasher .........................................................5................5 907 ..........Range #1..............................................................5................7 908 ..........Range #2..............................................................5................6 909 ..........Carpet.................................................................11..............11 910 ..........Dresser .................................................................5................6 911...........Mattress & Box Spring......................................8................7 REPLACEMENT COSTS ...............................76 .............80 All Items .......................................................1424 .........1512 *Note: Spec 204 (Non-Union Labor) is the sum of Specs 212 and 216 95 Appendices B.2 Expenditure Weights, Price Relatives, Percent Changes and Standard Errors, All Apartments, 1994 Spec # Item Description Expenditure Price % Standard Weights Relative Change Error Spec # Item Description Standard Expenditure Price % Weights Relative Change Error 101....TAXES.........................................0.2591......1.0226 ......2.26% .....0.1794 CONTRACTOR SERVICES.....0.1504......1.0087 ......0.87% .....0.6935 201....Payroll, Bronx, All ....................0.1243......1.0366 ......3.66% .....0.0000 601....Management Fees.....................0.6724......1.0387 ......3.87% .....1.0295 203....Payroll, Other, Union, Other...0.3006......1.0405 ......4.05% .....0.0000 603....Attorney Fees ............................0.1414......1.0330 ......3.30% .....1.2817 202....Payroll, Other, Union, Supts. ..0.1219......1.0408 ......4.08% .....0.0000 204....Payroll, Other, Non-Union, All..0.2617......1.0472 ......4.72% .....1.1812 205....Social Security Insurance.........0.0490......1.0421 ......4.21% .....0.0000 206....Unemployment Insurance.......0.0081......1.3561 .....35.61% ....0.0000 207....Private Health & Welfare ........0.1346......1.0283 ......2.83% .....0.0000 LABOR COSTS .........................0.1610......1.0428 ......4.28% .....0.3091 301....Fuel Oil #2 .................................0.2689......0.9810......-1.90%.....0.4720 302....Fuel Oil #4 .................................0.2218......0.9792......-2.08%.....2.6190 303....Fuel Oil #6 .................................0.5094......1.0092 ......0.92% .....2.6767 FUEL...........................................0.1038......0.9950......-0.50%.....1.4874 401....Electricity #1, 2,500 KWH .......0.0153......0.9314......-6.86%.....0.0000 402....Electricity #2, 15,000 KWH .....0.1883......0.9142......-8.58%.....0.0000 403....Electricity #3, 82,000 KWH .....0.0000......0.9166......-8.34%.....0.0000 404....Gas #1, 12,000 therms ..............0.0053......1.1897 .....18.97% ....0.0000 405....Gas #2, 65,000 therms ..............0.0597......1.1429 .....14.29% ....0.0000 406....Gas #3, 214,000 therms ............0.1501......1.1434 .....14.34% ....0.0000 407....Steam #1, 1.2m lbs....................0.0151......1.0735 ......7.35% .....0.0000 408....Steam #2, 2.6m lbs....................0.0057......1.0685 ......6.85% .....0.0000 409....Telephone...................................0.0133......0.9836......-1.64%.....0.0000 410....Water & Sewer ..........................0.5473......1.0102 ......1.02% .....0.2247 UTILITIES ..................................0.1470......1.0207 ......2.07% .....0.1230 602....Accountant Fees........................0.1451......1.0424 ......4.24% .....1.4837 604....Newspaper Ads ........................0.0041......1.0392 ......3.92% .....2.0812 605....Agency Fees...............................0.0048......1.0187 ......1.87% .....2.8107 606....Lease Forms...............................0.0110......1.0000 ......0.00% .....0.0000 607....Bill Envelopes............................0.0104......1.0182 ......1.82% .....0.8935 608....Ledger Paper .............................0.0107......0.9363......-6.37%.....7.5204 ADMINISTRATIVE COSTS ....0.0800......1.0366 ......3.66% .....0.7519 701....INSURANCE COSTS ...............0.0640......1.0076 ......0.76% .....0.1075 801....Light Bulbs.................................0.0422......1.0000 ......0.00% .....0.0000 802....Light Switch ..............................0.0478......1.0239 ......2.39% .....2.7438 803....Wet Mop.....................................0.0427......1.0112 ......1.12% .....2.0533 804....Floor Wax...................................0.0402......1.0000 ......0.00% .....0.0000 805....Paint............................................0.2144......1.0063 ......0.63% .....0.6273 806....Pushbroom.................................0.0405......1.0071 ......0.71% .....0.0000 807....Detergent ...................................0.0338......1.0242 ......2.42% .....2.4696 808....Bucket .........................................0.0433......0.9886......-1.14%.....0.8092 809....Washers ......................................0.1042......1.0019 ......0.19% .....0.1999 811....Pine Disinfectant.......................0.0493......1.0169 ......1.69% .....1.2874 812....Window/Glass Cleaner ...........0.0528......1.0248 ......2.48% .....2.4071 813....Switch Plate ...............................0.0408......1.0000 ......0.00% .....0.0000 814....Duplex Receptacle ....................0.0369......1.0000 ......0.00% .....0.0000 815....Toilet Seat...................................0.1044......1.0167 ......1.67% .....1.1278 816....Deck Faucet ...............................0.1068......1.0211.......2.11% .....1.3959 501....Repainting..................................0.4173......1.0085 ......0.85% .....1.0892 PARTS AND SUPPLIES...........0.0243......1.0099 ......0.99% .....0.3284 503....Plumbing, Stoppage .................0.1247......1.0158 ......1.58% .....1.2415 901....Refrigerator #1 ..........................0.0886......1.0261 ......2.61% .....1.4586 505....Elevator #2, 13 fl., 2 e...............0.0358......0.9920......-0.80%.....3.7765 903....Air Conditioner #1 ...................0.0165......1.0816 ......8.16% .....6.7123 502....Plumbing, Faucet......................0.1327......1.0112 ......1.12% .....1.8737 504....Elevator #1, 6 fl., 1 e.................0.0508......0.9924......-0.76%.....6.2997 506....Elevator #3, 19 fl., 3 e...............0.0215......0.9387......-6.13%.....7.2746 507....Burner Repair ............................0.0391......1.0248 ......2.48% .....1.5372 508....Boiler Repair, Tube ...................0.0450......1.0146 ......1.46% .....2.2440 509....Boiler Repair, Weld...................0.0364......0.9692......-3.08%.....3.8229 510....Refrigerator Repair...................0.0139......1.0000 ......0.00% .....0.0000 511....Range Repair .............................0.0144......1.0311.......3.11% .....1.4434 512....Roof Repair................................0.0523......1.0430 ......4.30% .....1.8447 513....Air Conditioner Repair............0.0099......1.0213 ......2.13% .....0.0000 902....Refrigerator #2 ..........................0.4766......1.0162 ......1.62% .....2.0415 904....Air Conditioner #2 ...................0.0209......1.0290 ......2.90% .....1.6863 905....Floor Runner .............................0.0897......1.0157 ......1.57% .....2.4216 906....Dishwasher................................0.0479......0.9650......-3.50%.....3.3358 907....Range #1 ....................................0.0435......0.9951......-0.49%.....2.4259 908....Range #2 ....................................0.2164......1.0190 ......1.90% .....1.2428 REPLACEMENT COSTS .........0.0105.....1.01560 .....1.56% .....1.0644 514....Floor Maint. #1, Studio............0.0003......1.0355 ......3.55% .....3.7631 515....Floor Maint. #2, 1 Br.................0.0006......1.0375 ......3.75% .....3.9680 516....Floor Maint. #3, 2 Br.................0.0053......1.0371 ......3.71% .....3.9356 96 ALL ITEMS...............................1.0000.....1.02040 .....2.04% .....0.2075 Appendix B: 1994 Price Index of Operating Costs B.3 Price Relatives by Building Type, All Apartments, 1994 Spec # Item Description Pre1947 Post1947 MASTER Gas OIL METERED Heated Heated BLDGS 101 ..TAXES, FEES, & PERMITS .1.0226 ....1.0226.....1.0226 ....1.0226 ....1.0226 Spec # Item Description Pre1947 Post1947 MASTER Gas Oil METERED Heated Heated BLDGS CONTRACTOR SERVICES 1.0099 ....1.0052.....1.0077 ....1.0087 ....1.0078 201 ..Payroll,Bronx,All ..................0.1779 ....0.0735.....0.0021 ....0.1562 ....0.0000 601 ..Management Fees.................0.6203 ....0.7966.....0.6475 ....0.7040 ....0.4680 203 ..Payroll,Other,Union,Other...0.1887 ....0.4526.....0.3652 ....0.2958 ....0.3976 603 ..Attorney Fees ........................0.1819 ....0.1013.....0.2447 ....0.1295 ....0.1472 202 ..Payroll,Other,Union,Supts. .0.1296 ....0.1236.....0.1553.....0.1150.....0.0982 204 ..Payroll,Other,Non-Union,All.0.3714 ....0.1642.....0.3366 ....0.2747 ....0.3981 205 ..Social Security Insurance ....0.0469 ....0.0558.....0.0549 ....0.0500 ....0.0480 206 ..Unemployment Insurance ..0.0106.....0.0114 .....0.0117.....0.0112.....0.0147 207 ..Private Health & Welfare ....0.1182.....0.1611 .....0.1183.....0.1398 ....0.0890 LABOR COSTS .....................1.0434 ....1.0421.....1.0441 ....1.0427 ....1.0455 301 ..Fuel Oil #2 .............................0.3179 ....0.0964.....0.0066 ....0.2629 ....0.3936 302 ..Fuel Oil #4 .............................0.2583 ....0.0900.....0.1586 ....0.2137 ....0.1599 303 ..Fuel Oil #6 .............................0.4159 ....0.8173.....0.8390 ....0.5186 ....0.4395 FUEL .......................................0.9922 ....1.0037.....1.0042 ....0.9951 ....0.9930 401 ..Electricity #1, 2,500 KWH ...0.0211.....0.0010.....0.0237.....0.0112.....0.0000 402 ..Electricity #2, 15,000 KWH.0.1394 ....0.2354.....0.0768 ....0.2151 ....0.0000 403 ..Electricity #3, 82,000 KWH.0.0000 ....0.0000.....0.0000 ....0.0000 ....0.5055 404 ..Gas #1, 12,000 therms ..........0.0089 ....0.0012.....0.0053 ....0.0070 ....0.0002 602 ..Accountant Fees....................0.1776.....0.1182 .....0.1070 ....0.1614 ....0.3626 604 ..Newspaper Ads ....................0.0052 ....0.0031.....0.0071 ....0.0039 ....0.0042 605 ..Agency Fees...........................0.0059 ....0.0035.....0.0081 ....0.0044 ....0.0048 606 ..Lease Forms...........................0.0155 ....0.0052.....0.0076.....0.0115.....0.0171 607 ..Bill Envelopes........................0.0151 ....0.0050.....0.0074.....0.0112.....0.0166 608 ..Ledger Paper .........................0.0143 ....0.0047.....0.0070 ....0.0106 ....0.0158 ADMINISTRATIVE COSTS1.0357 ....1.0377.....1.0364 ....1.0366 ....1.0363 701 ..INSURANCE COSTS...........1.0076 ....1.0076.....1.0076 ....1.0076 ....1.0076 801 ..Light Bulbs.............................0.0413 ....0.0442.....0.0432 ....0.0419 ....0.0809 802 ..Light Switch...........................0.0479.....0.0511 .....0.0501 ....0.0485 ....0.0938 803 ..Wet Mop.................................0.0408 ....0.0487.....0.0347 ....0.0475 ....0.0557 804 ..Floor Wax ...............................0.0379 ....0.0453.....0.0322 ....0.0441 ....0.0518 805 ..Paint ........................................0.2180 ....0.2109.....0.2446 ....0.2076.....0.1112 806 ..Pushbroom.............................0.0406 ....0.0412.....0.0292 ....0.0401 ....0.0470 807 ..Detergent................................0.0326 ....0.0390.....0.0278 ....0.0379 ....0.0446 405 ..Gas #2, 65,000 therms ..........0.0851 ....0.0358.....0.1645 ....0.0380 ....0.0177 808 ..Bucket .....................................0.0404 ....0.0483.....0.0343 ....0.0469 ....0.0550 407 ..Steam #1, 1.2m lbs................0.0001 ....0.0473.....0.0012 ....0.0001 ....0.0000 811...Pine Disinfectant...................0.0491 ....0.0524.....0.0513 ....0.0498 ....0.0962 406 ..Gas #3, 214,000 therms........0.1582 ....0.1974.....0.4892 ....0.0426 ....0.0574 408 ..Steam #2, 2.6m lbs................0.0001 ....0.0176.....0.0004 ....0.0001 ....0.0000 409 ..Telephone...............................0.0146 ....0.0103.....0.0083 ....0.0155 ....0.0161 410 ..Water & Sewer ......................0.5956 ....0.4703.....0.3076 ....0.6672 ....0.3700 UTILITIES ..............................1.0230 ....1.0162.....1.0769 ....0.9967 ....0.9669 809 ..Washers ..................................0.1095 ....0.0929 .....0.1128.....0.1001 ....0.0558 812 ..Window/Glass Cleaner.......0.0529 ....0.0565.....0.0553 ....0.0536 ....0.1037 813 ..Switch Plate ...........................0.0384 ....0.0459.....0.0327 ....0.0446 ....0.0524 814 ..Duplex Receptacle................0.0349 ....0.0417.....0.0296 ....0.0406 ....0.0476 815 ..Toilet Seat ...............................0.1112.....0.0945 .....0.1146.....0.1019 ....0.0567 816 ..Deck Faucet ...........................0.1144.....0.0972 .....0.1179.....0.1047 ....0.0583 501 ..Repainting..............................0.4027 ....0.4697.....0.5499 ....0.3886 ....0.3662 PARTS AND SUPPLIES ......1.0100 ....1.0097.....1.0103 ....1.0097 ....1.0106 503 ..Plumbing, Stoppage.............0.1462 ....0.0736.....0.1234 ....0.1261 ....0.1405 901 ..Refrigerator #1 ......................0.0877 ....0.0984.....0.0737 ....0.0987 ....0.0796 505 ..Elevator #2, 13 fl., 2 e...........0.0180 ....0.0831.....0.0050 ....0.0448 ....0.0977 903 ..Air Conditioner #1 ...............0.0094 ....0.0375.....0.0240 ....0.0158.....0.0111 502 ..Plumbing, Faucet..................0.1553 ....0.0769.....0.1287 ....0.1316 ....0.1465 504 ..Elevator #1, 6 fl., 1 e.............0.0630 ....0.0165.....0.0204 ....0.0565 ....0.0008 506 ..Elevator #3, 19 fl., 3 e...........0.0069 ....0.0561.....0.0413 ....0.0164 ....0.0344 507 ..Burner Repair ........................0.0407 ....0.0386.....0.0201 ....0.0470 ....0.0356 508 ..Boiler Repair, Tube ...............0.0463 ....0.0440.....0.0229 ....0.0535 ....0.0406 509 ..Boiler Repair, Weld...............0.0359 ....0.0340.....0.0177 ....0.0413 ....0.0313 510 ..Refrigerator Repair...............0.0136 ....0.0148.....0.0132 ....0.0140 ....0.0075 511...Range Repair .........................0.0145 ....0.0157.....0.0141 ....0.0151 ....0.0080 512 ..Roof Repair............................0.0592 ....0.0422.....0.0382 ....0.0601 ....0.0438 513 ..Air Conditioner Repair........0.0028 ....0.0299.....0.0042 ....0.0069 ....0.0353 902 ..Refrigerator #2 ......................0.4775 ....0.5002.....0.4009 ....0.5016 ....0.4046 904 ..Air Conditioner #2 ...............0.0114.....0.0451.....0.0288 ....0.0190 ....0.0134 905 ..Floor Runner .........................0.0861 ....0.1027.....0.0481 ....0.1031 ....0.2442 906 ..Dishwasher ............................0.0397 ....0.0612.....0.1451 ....0.0223 ....0.0135 907 ..Range #1.................................0.0492 ....0.0294.....0.0470 ....0.0440 ....0.0430 908 ..Range #2.................................0.2543 ....0.1420.....0.2430 ....0.2122 ....0.2072 REPLACEMENT COSTS ....1.0152 ...1.01643....1.0107 ....1.0167 ....1.0166 514 ..Floor Maint. #1, Studio........0.0002 ....0.0005.....0.0004 ....0.0004 ....0.0006 515 ..Floor Maint. #2, 1 Br. ...........0.0005 ....0.0009.....0.0008 ....0.0006 ....0.0096 516 ..Floor Maint. #3, 2 Br. ...........0.0043 ....0.0087.....0.0075 ....0.0057 ....0.0093 ALL ITEMS...........................1.0181 ...1.02284....1.0353 ....1.0169.....1.0110 97 Appendices B.4 Percentage Change in Real Estate Tax Sample by Borough and Source of Change, Apartments and Hotels, 1994 % Change Due to Assessments APARTMENTS % Change Due to Exemptions % Change Due to Abatements % Change Due to Tax Rate % Change Due to Interactions Total % Change Manhattan (Below 96th St) ................6.23% .....................2.32%.....................0.14%.....................4.63% .....................-.04% ......................0.82% Manhattan (Above 96th St) ...............0.59% .....................0.55%.....................1.00%.....................4.63%.....................1.15%......................7.93% All Manhattan.....................................-5.60% ....................2.15%.....................0.22%.....................4.63%.....................0.08%......................1.48% Bronx .....................................................1.22% .....................0.54%.....................0.70%.....................4.63%.....................1.73%......................8.83% Brooklyn...............................................-1.43% ....................1.87%.....................0.19%.....................4.63%.....................1.10%......................6.37% Queens .................................................-6.02% ....................0.32%.....................0.05%.....................4.63%.....................0.49% .....................-0.53% Staten Island........................................-8.26% ....................1.40%.....................0.08%.....................4.63%.....................0.16% .....................-1.99% Total......................................................-4.67% ....................1.68%.....................0.22%....................4.63% ....................0.40%.......................2.26% HOTELS Hotels ...................................................-7.35% .....................0.26%.....................0.00% ....................2.37%.....................0.01% ....................-4.72% Rooming Houses..................................3.72% ....................-0.03%.....................0.00% ....................2.37%.....................0.05% .....................6.11% SROs .....................................................-1.33% ....................-0.03%.....................0.00% ....................2.37% ...................-0.04% .....................0.96% Total ......................................................-2.91% .....................0.05% ....................0.00%....................2.37% ...................-0.03% ....................-0.51% Note: Totals may not add due to rounding. B.5 Tax Change by Borough and Community Board, Apartments, 1994 Borough Community Number of Board Buildings Tax Relative Manhattan.......All.............11,307 ..............1.5 1 .....................15.............-2.1 2 ................1,045 ..............4.1 3 ................1,299 ..............7.0 4 ...................944.............-1.3 5 ...................283.............-0.1 6 ...................858.............-1.2 7 ................2,047 ..............2.2 8 ................2,219 ..............1.2 9 ...................569 ..............6.9 10 ..................336 ............11.7 11 ..................378 ..............4.7 12 ...............1,305 ..............8.8 Bronx................All................3753 ..............8.8 1 ...................160 ............13.5 2 ...................116 ............14.1 3 ...................100 ............17.1 4 ...................449 ............14.4 5 ...................487 ............18.1 6 ...................302 ............22.0 7 ...................814 ............14.2 8 ...................325 ..............3.1 Note: 65 buildings had no Community Board identifiers. 98 Borough Community Number of Board Buildings Tax Relative 9 .....................276 ..............4.0 10 ....................112 ..............7.0 11 ....................269 ..............5.7 12 ....................337 ..............6.1 Brooklyn ........All .................9953 ..............6.4 1 ..................1,191 ............13.3 2 .....................553 ..............4.4 3 .....................393 ............28.1 4 ..................1,031 ............16.2 5 .....................201 ..............3.0 6 .....................816 ............13.3 7 .....................678 ..............8.2 8 .....................637 ............22.9 9 .....................447 ............12.9 10 ....................760 ..............3.4 11 ....................710 ..............5.0 12 ....................569 ..............6.4 13 ....................157 ..............0.8 14 ....................762 ..............6.1 15 ....................346 ..............0.6 16 ....................121 ............15.3 17 ....................514 ..............9.9 18 ......................61 ..............5.1 Borough Community Number of Board Buildings Tax Relative Queens ..........All ................5,750.............-0.5 1 .................1,675 ..............4.7 2 ....................767 ..............5.3 3 ....................372 ..............0.9 4 ....................308.............-3.2 5 .................1,068 ..............9.0 6 ....................324.............-4.3 7 ....................394.............-1.6 8 ....................165.............-3.3 9 ....................190 ..............0.1 10 .....................79.............-0.1 11....................111 ..............5.4 12 ...................143 ..............1.6 13 .....................43 ..............3.8 14 .....................67 ..............1.2 Staten Island ..All ..................145.............-2.0 1 .....................94.............-2.4 2 .....................35 ..............0.2 3 .....................16.............-3.7 Citywide ........All .............30,908 ..............2.3 Appendix B: 1994 Price Index of Operating Costs B.6 Expenditure Weights and Price Relatives, Lofts, 1994 Spec # Item Description Price Weights Relative 101......TAXES.......................................................0.2493.........1.0226 Spec Item Description # Price Weights Relative CONTRACTOR SERVICES...................0.0821.........1.0086 201......Payroll, Bronx, All ..................................0.0000.........1.0366 ADMINISTRATIVE COSTS, LEGAL...0.1111.........1.0330 203......Payroll, Other, Union, Other.................0.0000.........1.0405 601......Management Fees ...................................0.7911.........1.0387 205......Social Security Insurance.......................0.0495.........1.0430 604......Newspaper Ads ......................................0.0051.........1.0392 202......Payroll, Other, Union, Supts. ................0.3120.........1.0408 204......Payroll, Other, Non-Union, All.............0.5102.........1.0472 206......Unemployment Insurance.....................0.0092.........1.3561 207......Private Health & Welfare.......................0.1191.........1.0283 LABOR COSTS .......................................0.1059.........1.0456 602......Accountant Fees......................................0.1585.........1.0371 605......Agency Fees.............................................0.0059.........1.0187 606......Lease Forms.............................................0.0121.........1.0000 607......Bill Envelopes..........................................0.0136.........1.0182 608......Ledger Paper ...........................................0.0137.........0.9363 301......Fuel Oil #2 ...............................................0.3379.........0.9810 ADMINISTRATIVE COSTS, OTHER ..0.0974.........1.0362 303......Fuel Oil #6 ...............................................0.1066.........1.0092 701......INSURANCE COSTS .............................0.1577.........1.0076 FUEL.........................................................0.0682.........0.9852 801......Light Bulbs...............................................0.0422.........1.0000 401......Electricity #1, 2,500 KWH .....................0.0153.........0.9334 803......Wet Mop...................................................0.0427.........1.0112 302......Fuel Oil #4 ...............................................0.5555.........0.9792 402......Electricity #2, 15,000 KWH ...................0.1883.........0.9215 403......Electricity #3, 82,000 KWH ...................0.0000.........0.9295 404......Gas #1, 12,000 therms ............................0.0053.........1.1897 405......Gas #2, 65,000 therms ............................0.0598.........1.1429 406......Gas #3, 214,000 therms ..........................0.1501.........1.1434 407......Steam #1, 1.2m lbs..................................0.0151.........1.0735 408......Steam #2, 2.6m lbs..................................0.0056.........1.0685 409......Telephone.................................................0.0133.........0.9836 410......Water & Sewer ........................................0.5472.........1.0102 UTILITIES ................................................0.0817.........1.0295 501......Repainting................................................0.4172.........1.0085 802......Light Switch ............................................0.0477.........1.0239 804......Floor Wax.................................................0.0402.........1.0000 805......Paint..........................................................0.2144.........1.0063 806......Pushbroom...............................................0.0405.........1.0071 807......Detergent .................................................0.0338.........1.0242 808......Bucket .......................................................0.0433.........0.9886 809......Washers ....................................................0.1042.........1.0019 811......Pine Disinfectant.....................................0.0492.........1.0169 812......Window/Glass Cleaner .........................0.0528.........1.0248 813......Switch Plate .............................................0.0407.........1.0000 814......Duplex Receptacle ..................................0.0370.........1.0000 815......Toilet Seat.................................................0.1043.........1.0167 816......Deck Faucet .............................................0.1069.........1.0211 502......Plumbing, Faucet....................................0.1327.........1.0112 PARTS AND SUPPLIES.........................0.0257.........1.0099 504......Elevator #1, 6 fl., 1 e...............................0.0508.........0.9924 901......Refrigerator #1 ........................................0.0886.........1.0261 506......Elevator #3, 19 fl., 3 e.............................0.0215.........0.9387 903......Air Conditioner #1 .................................0.0165.........1.0816 503......Plumbing, Stoppage ...............................0.1247.........1.0158 505......Elevator #2, 13 fl., 2 e.............................0.0359.........0.9920 507......Burner Repair ..........................................0.0391.........1.0248 508......Boiler Repair, Tube .................................0.0450.........1.0146 509......Boiler Repair, Weld.................................0.0365.........0.9692 510......Refrigerator Repair.................................0.0139.........1.0000 511......Range Repair ...........................................0.0144.........1.0311 512......Roof Repair..............................................0.0523.........1.0430 513......Air Conditioner Repair..........................0.0099.........1.0213 514......Floor Maint. #1, Studio..........................0.0003.........1.0355 515......Floor Maint. #2, 1 Br...............................0.0006.........1.0375 516......Floor Maint. #3, 2 Br...............................0.0053.........1.0371 902......Refrigerator #2 ........................................0.4765.........1.0162 904......Air Conditioner #2 .................................0.0208.........1.0290 905......Floor Runner ...........................................0.0897.........1.0157 906......Dishwasher..............................................0.0479.........0.9650 907......Range #1 ..................................................0.0434.........0.9951 908......Range #2 ..................................................0.2165.........1.0190 REPLACEMENT COSTS .......................0.0209.........1.0156 ALL ITEMS .............................................1.0000.........1.0215 99 Appendices B.7 Expenditure Weights, Price Relatives, Percent Changes and Standard Errors, All Hotels, 1994 Spec # Item Description Expenditure Price % Standard Weights Relative Change Error Spec # Item Description Standard Expenditure Price % Weights Relative Change Error 101....TAXES, FEES, & PERMITS......0.2287......0.9949 .....-0.0051 ....0.7812 518....Linen/Laundry Service ...........0.2309......1.0775 ......0.0775 .....6.0437 205....Social Security Insurance.........0.0593......1.0430 ......0.0430 .....0.0000 CONTRACTOR SERVICES.....0.1001......1.0270 ......0.0270 .....1.4820 208....Hotel Private Health/Welfare ..0.0363......1.0482 ......0.0482 .....0.0000 601....Management Fees.....................0.6095......1.0387 ......0.0387 .....1.0295 210....SRO Union Labor .....................0.0136......1.0369 ......0.0369 .....0.0000 603....Attorney Fees ............................0.1482......1.0330 ......0.0330 .....1.2817 206....Unemployment Insurance.......0.0180......1.3561 ......0.3561 .....0.0000 209....Hotel Union Labor ...................0.3412......1.0377 ......0.0377 .....0.0000 211....Apartment Value.......................0.1163......1.0286 ......0.0286 .....0.5276 212....Non-Union Superintendent ....0.2911......1.0494 ......0.0494 .....1.3162 213....Non-Union Maid ......................0.0000......0.0000 ........NA .......0.0000 214....Non-Union Desk Clerk............0.0000......0.0000 ........NA .......0.0000 215....Non-Union Maint. Worker......0.0000......0.0000 ........NA .......0.0000 216....Non-Union Janitor/Porter ......0.1241......1.0364 ......0.0364 .....1.2095 LABOR COSTS .........................0.1721......1.0463 ......0.0463 .....0.4160 301....Fuel Oil #2 .................................0.7045......0.9810 .....-0.0190 ....0.4720 302....Fuel Oil #4 .................................0.0151......0.9792 .....-0.0208 ....2.6190 303....Fuel Oil #6 .................................0.2805......1.0092 ......0.0092 .....2.6767 FUEL...........................................0.1073......0.9889......-0.0111.....0.8220 401....Electricity #1, 2,500 KWH .......0.0842......0.9314 .....-0.0686 ....0.0000 402....Electricity #2, 15,000 KWH .....0.0877......0.9142 .....-0.0858 ....0.0000 602....Accountant Fees........................0.0846......1.0424 ......0.0424 .....1.4837 604....Newspaper Ads ........................0.0975......1.0392 ......0.0392 .....2.0812 605....Agency Fees...............................0.0212......1.0187 ......0.0187 .....2.8107 606....Lease Forms...............................0.0124......1.0000 ......0.0000 .....0.0000 607....Bill Envelopes............................0.0142......1.0182 ......0.0182 .....0.8935 608....Ledger Paper .............................0.0123......0.9363 .....-0.0637 ....7.5204 ADMINISTRATIVE COSTS ....0.0877......1.0357 ......0.0357 .....0.7065 701....INSURANCE COSTS ...............0.0353......1.0076 ......0.0076 .....0.1075 801....Light Bulbs.................................0.0175......1.0000 ......0.0000 .....0.0000 802....Light Switch ..............................0.0180......1.0239 ......0.0239 .....2.7438 803....Wet Mop.....................................0.0505......1.0112 ......0.0112 .....2.0533 804....Floor Wax...................................0.0501......1.0000 ......0.0000 .....0.0000 805....Paint ............................................0.1180......1.0063 ......0.0063 .....0.6273 806....Pushbroom.................................0.0461......1.0071 ......0.0071 .....0.0000 807....Detergent ...................................0.0453......1.0242 ......0.0242 .....2.4696 403....Electricity #3, 82,000 KWH .....0.2756......0.9166 .....-0.0834 ....0.0000 808....Bucket .........................................0.0529......0.9886 .....-0.0114 ....0.8092 405....Gas #2, 65,000 therms ..............0.0359......1.1429 ......0.1429 .....0.0000 810....Linens .........................................0.3111......1.0144 ......0.0144 .....1.2455 404....Gas #1, 12,000 therms ..............0.0451......1.1897 ......0.1897 .....0.0000 406....Gas #3, 214,000 therms ............0.1464......1.1434 ......0.1434 .....0.0000 407....Steam #1, 1.2m lbs....................0.0002......1.0735 ......0.0735 .....0.0000 409....Telephone...................................0.1904......0.9836 .....-0.0164 ....0.0000 410....Water & Sewer ..........................0.1346......1.0434 ......0.0434 .....2.6649 UTILITIES ..................................0.1790......1.0011 ......0.0011 .....0.3586 809....Washers ......................................0.0522......1.0019 ......0.0019 .....0.1999 811....Pine Disinfectant.......................0.0193......1.0169 ......0.0169 .....1.2874 812....Window/Glass Cleaner ...........0.0204......1.0248 ......0.0248 .....2.4071 813....Switch Plate ...............................0.0483......1.0000 ......0.0000 .....0.0000 814....Duplex Receptacle ....................0.0446......1.0000 ......0.0000 .....0.0000 815....Toilet Seat...................................0.0521......1.0167 ......0.0167 .....1.1278 816....Deck Faucet ...............................0.0535......1.0211 ......0.0211 .....1.3959 501....Repainting..................................0.2090......1.0085 ......0.0085 .....1.0892 PARTS AND SUPPLIES...........0.0637......1.0100 ......0.0100 .....0.4420 503....Plumbing, Stoppage .................0.0751......1.0158 ......0.0158 .....1.2415 901....Refrigerator #1 ..........................0.0193......1.0261 ......0.0261 .....1.4586 505....Elevator #2, 13 fl., 2 e...............0.0304......0.9920 .....-0.0080 ....3.7765 903....Air Conditioner #1 ...................0.0597......1.0816 ......0.0816 .....6.7123 502....Plumbing, Faucet......................0.0754......1.0112 ......0.0112 .....1.8737 504....Elevator #1, 6 fl., 1 e.................0.0313......0.9924 .....-0.0076 ....6.2997 506....Elevator #3, 19 fl., 3 e...............0.0299......0.9387 .....-0.0613 ....7.2746 507....Burner Repair ............................0.0257......1.0248 ......0.0248 .....1.5372 508....Boiler Repair, Tube ...................0.0267......1.0146 ......0.0146 .....2.2440 509....Boiler Repair, Weld...................0.0255......0.9692 .....-0.0308 ....0.0000 511....Range Repair .............................0.1521......1.0311 ......0.0311 .....1.4434 512....Roof Repair................................0.0212......1.0430 ......0.0430 .....1.8447 513....Air Conditioner Repair............0.0458......1.0213 ......0.0213 .....0.0000 902....Refrigerator #2 ..........................0.1030......1.0162 ......0.0162 .....2.0415 904....Air Conditioner #2 ...................0.0718......1.0290 ......0.0290 .....1.6863 907....Range #1 ....................................0.0083......0.9951 .....-0.0049 ....2.4259 908....Range #2 ....................................0.0425......1.0190 ......0.0190 .....1.2428 909....Carpet .........................................0.3220......1.0000 ......0.0000 .....0.0000 910....Dresser........................................0.1862......0.9603 .....-0.0397 ....3.1340 911....Mattress & Box Spring.............0.1872......0.9058 .....-0.0942 ....7.7742 514....Floor Maint. #1, Studio............0.0009......1.0355 ......0.0355 .....3.7631 REPLACEMENT COSTS.........0.0261......0.9849 .....-0.0151 ....1.6375 516....Floor Maint. #3, 2 Br.................0.0182......1.0371 ......0.0371 .....3.9356 ALL ITEMS...............................1.0000......1.0122 ......0.0122 .....0.2783 515....Floor Maint. #2, 1 Br.................0.0020......1.0375 ......0.0375 .....3.9680 100 Appendix B: 1994 Price Index of Operating Costs B.8 Price Relative by Hotel Type, 1994 Spec # Item Description Hotel RH SRO 101 ......TAXES, FEES, & PERMITS ..........0.9528........1.0611..........1.0096 205 ......Social Security Insurance .............0.0778........0.0592..........0.0369 206 ......Unemployment Insurance ...........0.0222........0.0187..........0.0351 208 ......Hotel Private Health/Welfare.....0.0558........0.0000..........0.0054 209 ......Hotel Union Labor........................0.5336........0.0000..........0.0000 210 ......SRO Union Labor..........................0.0000........0.0000..........0.0701 211 ......Apartment Value ...........................0.0331........0.4252..........0.1798 212 ......Non-Union Superintendent.........0.1020........0.4237..........0.5522 213 ......Non-Union Maid...........................0.0000........0.0000..........0.0000 214 ......Non-Union Desk Clerk ................0.0000........0.0000..........0.0000 215 ......Non-Union Maintenance Worker0.0000 .......0.0000..........0.0000 216 ......Non-Union Janitor/Porter...........0.2200........0.1164..........0.1710 LABOR COSTS ..............................1.0445........1.0432..........1.0505 301 ......Fuel Oil #2......................................0.7358........0.9810..........0.3065 302 ......Fuel Oil #4......................................0.0000........0.0000..........0.0768 303 ......Fuel Oil #6......................................0.2523........0.0000..........0.6147 FUEL ...............................................0.9881........0.9810..........0.9981 401 ......Electricity #1, 2,500 KWH............0.0034........0.4413..........0.0674 402 ......Electricity #2, 15,000 KWH..........0.0797........0.0000..........0.1381 403 ......Electricity #3, 82,000 KWH..........0.3211........0.0000..........0.2018 404 ......Gas #1, 12,000 therms...................0.0040........0.3411..........0.0128 405 ......Gas #2, 65,000 therms...................0.0331........0.0000..........0.0964 406 ......Gas #3, 214,000 therms.................0.1723........0.0000..........0.2684 407 ......Steam #1, 1.2m lbs ........................0.0000........0.0018..........0.0000 409 ......Telephone .......................................0.2520........0.0296..........0.0824 410 ......Water & Sewer ...............................0.1248........0.2167..........0.1490 UTILITIES ......................................0.9904........1.0305..........1.0163 501 ......Repainting ......................................0.2163........0.2461..........0.1668 502 ......Plumbing, Faucet ..........................0.0306........0.1768..........0.1485 503 ......Plumbing, Stoppage .....................0.0306........0.1767..........0.1484 504 ......Elevator #1, 6 fl., 1 e. ....................0.0433........0.0000..........0.0146 505 ......Elevator #2, 13 fl., 2 e. ..................0.0420........0.0000..........0.0142 506 ......Elevator #3, 19 fl., 3 e. ..................0.0391........0.0000..........0.0132 507 ......Burner Repair ................................0.0088........0.0277..........0.0821 508 ......Boiler Repair, Tube........................0.0090........0.0284..........0.0842 509 ......Boiler Repair, Weld .......................0.0082........0.0260..........0.0769 511 ......Range Repair..................................0.1842........0.0608..........0.1404 512 ......Roof Repair ....................................0.0338........0.0017..........0.0000 513 ......Air Conditioner Repair ................0.0394........0.0788..........0.0470 514 ......Floor Maint. #1, Studio ................0.0004........0.0021..........0.0021 515 ......Floor Maint. #2, 1 Br. ....................0.0008........0.0044..........0.0044 516 ......Floor Maint. #3, 2 Br. ....................0.0068........0.0414..........0.0406 Spec # Item Description Hotel RH SRO 518 ......Linen/Laundry Service................0.3389........0.1523..........0.0309 CONTRACTOR SERVICES .........1.0319........1.0233..........1.0142 601 ......Management Fees .........................0.6826........0.4870..........0.5771 602 ......Accountant Fees ............................0.0581........0.1881..........0.1137 603 ......Attorney Fees.................................0.1193........0.2150..........0.2196 604 ......Newspaper Ads.............................0.1246........0.0497..........0.0626 605 ......Agency Fees ...................................0.0186........0.0340..........0.0224 606 ......Lease Forms ...................................0.0107........0.0196..........0.0129 607 ......Bill Envelopes ................................0.0124........0.0227..........0.0150 608 ......Ledger Paper..................................0.0099........0.0182..........0.0120 ADMINISTRATIVE COSTS.........1.0362........1.0343..........1.0354 701 ......INSURANCE COSTS....................1.0076........1.0076..........1.0076 801 ......Light Bulbs .....................................0.0059........0.0415..........0.0344 802 ......Light Switch ...................................0.0062........0.0437..........0.0363 803 ......Wet Mop .........................................0.0667........0.0240..........0.0246 804 ......Floor Wax .......................................0.0654........0.0235..........0.0241 805 ......Paint ................................................0.0539........0.3130..........0.1675 806 ......Pushbroom .....................................0.0606........0.0218..........0.0224 807 ......Detergent ........................................0.0605........0.0217..........0.0223 808 ......Bucket .............................................0.0683........0.0245..........0.0252 809 ......Washers...........................................0.0147........0.0864..........0.1401 810 ......Linens..............................................0.4425........0.0925..........0.1013 811 ......Pine Disinfectant ...........................0.0066........0.0466..........0.0386 812 ......Window/Glass Cleaner ...............0.0070........0.0496..........0.0412 813 ......Switch Plate....................................0.0631........0.0227..........0.0233 814 ......Duplex Receptacle.........................0.0582........0.0209..........0.0215 815 ......Toilet Seat .......................................0.0149........0.0877..........0.1421 816 ......Deck Faucet....................................0.0153........0.0903..........0.1464 PARTS AND SUPPLIES ...............1.0094........1.0104..........1.0113 901 ......Refrigerator #1...............................0.0085........0.0437..........0.0394 902 ......Refrigerator #2...............................0.0453........0.2308..........0.2085 903 ......Air Conditioner #1........................0.0957........0.0118..........0.0000 904 ......Air Conditioner #2........................0.1095........0.0135..........0.0000 907 ......Range #1.........................................0.0013........0.0163..........0.0256 908 ......Range #2.........................................0.0068........0.0856..........0.1339 909 ......Carpet .............................................0.3067........0.3583..........0.3453 910 ......Dresser ............................................0.2095........0.1186..........0.1217 911 ......Mattress & Box Spring .................0.1986........0.1124..........0.1153 REPLACEMENT COSTS .............0.9820........0.9910..........0.9897 ALL ITEMS ...................................0.9962........1.0265..........1.0212 101 Appendices B.9 Changes in the Price Index of Operating Costs, Expenditure Weights and Price Relatives, 1984-1994 1984 Item Weight Price Relative 1985 Item Weight Price Relative 1986 Item Weight Price Relative 1987 Item Weight Price Relative 1988 Item Weight Price Relative Taxes..........................................0.191.............1.0% .......................0.183............5.5% .......................0.183 .............6.8% ........................0.184...............8.7% ........................0.196 .............8.1%.................. Labor .........................................0.161.............9.2% .......................0.166............7.1% .......................0.169 .............6.4% ........................0.169...............5.7% ........................0.175 .............5.3%.................. Fuel............................................0.209.............8.8% .......................0.214 ..........-0.8% .......................0.201 ............-8.4% ........................0.174 ...........-22.3% ........................0.132 ...........12.6%.................. Utilities .....................................0.141.............2.5% .......................0.136............3.1% .......................0.133 ............-0.6% ........................0.124 .............-1.2% ........................0.120 .............1.3%.................. Contractor Services ................0.136...........10.2% .......................0.141..........10.4% .......................0.148............11.0% ........................0.155...............4.5% ........................0.158 .............9.3%.................. Administrative Costs .............0.079.............6.8% .......................0.080..........10.5% .......................0.083 .............9.4% ........................0.086...............5.9% ........................0.089 .............4.1%.................. Insurance..................................0.035.............4.2% .......................0.035..........14.8% .......................0.038 ...........89.0% ........................0.067.............33.7% ........................0.087 .............1.6%.................. Parts & Supplies......................0.031.............3.6% .......................0.031............4.7% .......................0.030 .............2.3% ........................0.030...............3.3% ........................0.029 .............2.4%.................. Replacement Costs .................0.015.............3.2% .......................0.015............1.4% .......................0.014 ............-0.4% ........................0.014...............0.2% ........................0.013 .............1.7%.................. All Items ........................................................6.1% ............................................5.4% ..............................................6.4% ................................................2.1% ...............................................6.4%.................. Pre '47 Taxes..........................................0.140.............1.0% .......................0.132............5.5% .......................0.132 .............6.8% ........................0.132...............8.7% ........................0.139 .............8.1%.................. Labor .........................................0.140.............8.8% .......................0.142............7.2% .......................0.144 .............6.7% ........................0.144...............5.8% ........................0.146 .............5.2%.................. Fuel............................................0.250.............8.5% .......................0.257 ..........-0.8% .......................0.242 ............-7.7% ........................0.209 ...........-22.1% ........................0.161 ...........12.8%.................. Utilities .....................................0.140.............2.4% .......................0.134............4.4% .......................0.133 .............0.1% ........................0.124 .............-0.5% ........................0.122 .............2.3%.................. Contractor Services ................0.160...........10.1% .......................0.170..........10.5% .......................0.178 ...........10.8% ........................0.184...............4.6% ........................0.189 .............9.3%.................. Administrative Costs .............0.070.............7.1% .......................0.071..........10.2% .......................0.075 .............9.7% ........................0.077...............5.6% ........................0.083 .............4.6%.................. Insurance..................................0.040.............4.2% .......................0.043..........14.8% .......................0.046 ...........89.0% ........................0.082.............33.7% ........................0.108 .............1.6%.................. Parts & Supplies......................0.040.............3.5% .......................0.034............4.8% .......................0.034 .............2.3% ........................0.033...............3.3% ........................0.033 .............3.0%.................. Replacement Costs .................0.020.............3.0% .......................0.017............1.4% .......................0.017 ............-0.3% ........................0.016...............0.1% ........................0.020 .............1.2%.................. All Items ........................................................6.4% ............................................5.5% ..............................................6.9% ................................................1.4% ...............................................6.6%.................. Post '46 Taxes..........................................0.270.............1.0% .......................0.258............5.5% .......................0.259 .............6.8% ........................0.262...............8.7% ........................0.278 .............8.1%.................. Labor .........................................0.190.............9.5% .......................0.201............7.0% .......................0.204 .............6.1% ........................0.205...............5.7% ........................0.210 .............5.9%.................. Fuel............................................0.150.............9.8% .......................0.150 ..........-0.9% .......................0.142 ..........-10.2% ........................0.120 ...........-22.9% ........................0.090 ...........12.3%.................. Utilities .....................................0.140.............2.7% .......................0.139............1.4% .......................0.134 ............-1.6% ........................0.124 .............-2.2%.........................0.118................-0.3.................. Contractor Services ................0.100...........10.5% .......................0.100..........10.2% .......................0.105............11.2%.........................0.111...............4.4%.........................0.112 .............8.8%.................. Administrative Costs .............0.090.............6.3% .......................0.092..........10.8% .......................0.096 .............8.9% ........................0.099...............6.2% ........................0.102 .............3.5%.................. Insurance..................................0.020.............4.2% .......................0.023..........14.8% .......................0.025 ...........89.0% ........................0.045.............33.7% ........................0.058 .............1.6%.................. Parts & Supplies......................0.030.............3.6% .......................0.025............4.6% .......................0.025 .............2.2% ........................0.024...............3.2% ........................0.024 .............2.5%.................. Replacement Costs .................0.010.............3.6% .......................0.012............1.6% .......................0.011 ............-0.6%.........................0.011...............0.3% ........................0.010 .............2.0%.................. All Items ........................................................5.8% ............................................5.4% ..............................................5.7% ................................................3.1% ...............................................6.1%.................. 102 Appendix B: 1994 Price Index of Operating Costs 1989 Item Weight Price Relative 1990 Item Weight Price Relative 1991 Item Weight Price Relative 1992 Item Weight Price Relative 1993 Item Weight Price Relative 1994 Item Weight Price Relative ....................0.211..........15.8%......................0.229 ............12.0%........................0.232 ..........12.8%........................0.246............11.0%.......................0.263 .............3.1% ....................0.259 ............2.3% ...................0.169............5.1%......................0.167 ..............5.7%........................0.159 ............5.2%........................0.158 .............5.2%.......................0.160 .............5.6% ....................0.161 ............4.3% ...................0.126 ..........-5.2% ......................0.112 ............20.9%........................0.122 ............4.6%........................0.121 ..........-10.9%.......................0.103 .............5.2% ....................0.104...........-0.5% ...................0.122..........12.4%......................0.128 ............20.8%........................0.140 ............1.2%........................0.133 .............6.6%.......................0.137 ...........12.7% ....................0.147 ............2.1% ...................0.164............6.1%......................0.163 ..............6.5%........................0.157 ............5.5%........................0.156 .............2.4%.......................0.154 .............2.5% ....................0.150 ............0.9% ...................0.087............6.7%......................0.087 ..............7.5%........................0.084 ............3.0%........................0.082 .............2.8%.......................0.081 .............3.8% ....................0.080 ............3.7% ...................0.080 ..........-0.6%......................0.074 ..............3.6%........................0.069 ............4.4%........................0.068 .............2.3%.......................0.067 ............-0.5% ....................0.064 ............0.8% ...................0.028............3.6%......................0.027 ..............6.1%........................0.026 ............3.6%........................0.026 .............2.5%.......................0.025 .............1.0% ....................0.024 ............1.0% ...................0.012............2.4%......................0.012 ..............2.7%........................0.011 ............1.3%........................0.011 .............3.8%.......................0.011 .............4.2% ....................0.010 ............1.6% .........................................6.7% ...........................................10.9% .............................................6.0%...............................................4.0% .............................................4.7%..........................................2.0% ...................0.141..........15.8%......................0.155 ............12.0%........................0.156 ..........12.8%........................0.167............11.0%.......................0.180 .............3.1% ....................0.178 ............2.3% ...................0.144............5.1%......................0.143 ..............5.5%........................0.136 ............5.2%........................0.134 .............5.1%.......................0.139 .............5.3% ....................0.140 ............4.3% ...................0.170 ..........-4.6%......................0.154 ............20.0%........................0.167 ............4.8%........................0.166 ..........-10.4%.......................0.144 .............5.1% ....................0.145...........-0.8% ....................0.117..........12.8%......................0.125 ............22.2%........................0.137 ............1.5%........................0.137 .............7.6%.......................0.138 ...........12.3% ....................0.149 ............2.3% ...................0.194............6.2%......................0.195 ..............6.5%........................0.188 ............5.4%........................0.187 .............2.1%.......................0.186 .............2.5% ....................0.183 ............1.0% ...................0.082............6.7%......................0.082 ..............7.0%........................0.079 ............3.2%........................0.078 .............2.7%.......................0.078 .............3.7% ....................0.077 ............3.6% ...................0.102 ..........-0.6%......................0.097 ..............3.6%........................0.090 ............4.4%........................0.089 .............2.3%.......................0.089 ............-0.5% ....................0.085 ............0.8% ...................0.032............3.6%......................0.032 ..............6.2%........................0.030 ............3.5%........................0.030 .............2.5%.......................0.030 .............1.0% ....................0.029 ............1.0% ...................0.019............2.3%......................0.018 ..............2.7%........................0.017 ............1.3%........................0.016 .............3.6%.......................0.016 .............4.2% ....................0.016 ............1.5% .........................................5.5% ...........................................10.9% .............................................5.5%...............................................2.8% .............................................4.6%..........................................1.8% ...................0.281..........15.8%......................0.303 ............12.0%........................0.306 ..........12.8%........................0.324............11.0%.......................0.343 .............3.1% ....................0.337 ............2.3% ...................0.210............5.0%......................0.205 ..............6.0%........................0.196 ............5.1%........................0.194 .............5.4%.......................0.195 .............6.0% ....................0.197 ............4.2% ...................0.095 ..........-7.3%......................0.082 ............23.4%........................0.091 ............3.8%........................0.089 ..........-12.5%.......................0.074 .............5.6% ....................0.075 ............0.4% ....................0.111..........11.7% ......................0.115 ............18.2%........................0.123 ............0.6%........................0.116 .............4.7%.......................0.116 ...........13.6% ....................0.125 ............1.6% ....................0.115............6.0% ......................0.113 ..............6.6%........................0.109 ............5.8%........................0.108 .............3.1%.......................0.106 .............2.5% ....................0.104 ............0.5% ...................0.100............6.8%......................0.099 ..............8.2%........................0.097 ............2.7%........................0.093 .............3.0%.......................0.092 .............4.0% ....................0.091 ............3.8% ...................0.056 ..........-0.6%......................0.052 ..............3.6%........................0.048 ............4.4%........................0.047 .............2.3%.......................0.046 ............-0.5% ....................0.044 ............0.8% ...................0.023............3.7%......................0.022 ..............6.0%........................0.021 ............3.6%........................0.021 .............2.5%.......................0.020 .............1.1% ....................0.019 ............1.0% ...................0.010............2.6%......................0.010 ..............2.8%........................0.009 ............1.3%........................0.008 .............4.2%.......................0.008 .............4.1% ....................0.008 ............1.6% .........................................7.5% ...........................................10.8% .............................................6.5%...............................................4.8% .............................................4.9%..........................................2.3% 103 Appendices Appendix C: 1994 Income and Expense Study C.1 Cross Sectional Income and Expense Study: Estimated Average Operating & Maintenance Costs (1992) by Building Size and Location, Structures Built Before 1947 Taxes Labor Fuel Water & Sewer Light & Power Maint. Admin. Insurance Misc. Total Citywide........................$78................$44.................$43 ...............$24 ...............$16................$72...............$41................$22 ................$25....................$364 11 - 19 ........................$99................$20.................$54 ...............$24 ...............$15................$75...............$43................$28 ................$28....................$386 20 - 99 ........................$68................$39.................$45 ...............$24 ...............$12................$71...............$40................$22 ................$24....................$345 100+..............................$112................$95.................$29 ...............$23 ...............$23................$80...............$46................$16 ................$28....................$452 Bronx ............................$44................$37.................$46 ...............$22 ...............$13................$71...............$36................$21 ................$23....................$313 11 - 19 ........................$42................$19.................$65 ...............$24 ...............$14................$77...............$34................$27 ................$28....................$329 20 - 99 ........................$37................$32.................$47 ...............$23 ...............$11................$70...............$35................$21 ................$22....................$298 100+................................$36................$45.................$36 ...............$21 .................$8................$70...............$35................$18 ................$17....................$287 Brooklyn........................$61................$33.................$46 ...............$21 ...............$14................$65...............$35................$20 ................$23....................$318 11 - 19 ........................$57................$15.................$61 ...............$21 ...............$11................$67...............$30................$24 ................$26....................$313 20 - 99 ........................$54................$26.................$46 ...............$23 ...............$12................$62...............$34................$20 ................$22....................$298 100+................................$55................$47.................$34 ...............$20 ...............$11................$68...............$33................$19 ................$19....................$306 Manhattan ..................$107................$57.................$41 ...............$23 ...............$18................$80...............$49................$23 ................$28....................$427 11 - 19 ......................$140................$23.................$48 ...............$26 ...............$18................$81...............$56................$32 ................$32....................$456 20 - 99 ........................$98................$53.................$43 ...............$25 ...............$15................$80...............$49................$24 ................$27....................$414 100+..............................$141..............$116.................$27 ...............$24 ...............$29................$84...............$53................$15 ................$31....................$519 Queens ..........................$73................$31.................$44 ...............$22 ...............$13................$61...............$34................$20 ................$23....................$320 11 - 19 ........................$66................$17.................$54 ...............$22 .................$9................$61...............$24................$21 ................$16....................$291 20 - 99 ........................$70................$27 ............... $43 ...............$23 ...............$11................$59...............$35................$20 ................$24....................$312 100+................................$70................$63 ............... $30 ...............$26 ...............$11................$73...............$33................$18 ................$27....................$351 St Island * 20+ ......................................- ....................- .....................-....................-....................- ....................- ...................- ....................- .....................- ..........................- * The number of pre - 47 buildings in Staten Island was too small to calculate reliable statistics. Totals in this table may not match those in Table C3 due to rounding. Data in this table are NOT adjusted for the results of the 1992 Department of Finance audit on I&E reported operating costs. The category “Utilities” used in the I & E report is the sum of “Water & Sewer” and “Light & Power”. Source: NYC Department of Finance, RPIE Filings 104 Appendix C: 1994 Income and Expense Study C.2 Cross Sectional Income and Expense Study: Estimated Average Operating & Maintenance Costs (1992) by Building Size and Location, Structures Built After 1946. Taxes Labor Fuel Water & Sewer Light & Power Maint. Admin. Insurance Misc. Total Citywide......................$141................$85.................$33 ...............$25 ...............$22................$71...............$54................$19 ................$31....................$482 11 - 19 ......................$175................$43.................$48 ...............$28 ...............$28................$87...............$77................$27 ................$88....................$601 20 - 99 ......................$101................$48.................$35 ...............$24 ...............$17................$64...............$41................$18 ................$27....................$376 100+ ..........................$176..............$120.................$31 ...............$25 ...............$27................$77...............$65................$18 ................$33....................$570 Bronx* ............................$86................$52.................$36 ...............$25 ...............$16................$58...............$36................$19 ................$23....................$350 11 - 19 ............................- ....................- .....................-....................-....................- ....................- ...................- ....................- .....................- ..........................20 - 99 ........................$76................$34.................$39 ...............$24 ...............$13................$45...............$34................$19 ................$23....................$308 100+ ............................$98................$82.................$29 ...............$25 ...............$19................$56...............$36................$18 ................$18....................$382 Brooklyn* ......................$84................$54.................$35 ...............$23 ...............$19................$65...............$44................$20 ................$27....................$370 11 - 19 ............................- ....................- .....................-....................-....................- ....................- ...................- ....................- .....................- ..........................20 - 99 ........................$84................$45.................$35 ...............$24 ...............$17................$67...............$42................$20 ................$24....................$359 100+ ............................$76................$78.................$31 ...............$22 ...............$23................$59...............$44................$18 ................$28....................$380 .............................................. Manhattan* ................$249..............$148.................$31 ...............$27 ...............$31................$88...............$80................$20 ................$46....................$720 11 - 19 ............................- ....................- .....................-....................-....................- ....................- ...................- ....................- .....................- ..........................20 - 99 ......................$191................$83.................$31 ...............$27 ...............$20................$81...............$61................$22 ................$38....................$554 100+ ..........................$262..............$163.................$30 ...............$27 ...............$34................$90...............$85................$20 ................$47....................$757 Queens ........................$102................$62.................$34 ...............$23 ...............$19................$65...............$44................$17 ................$24....................$390 11 - 19 ......................$108................$20.................$42 ...............$23 ...............$14................$50...............$37................$21 ................$19....................$334 20 - 99 ........................$97................$46.................$36 ...............$24 ...............$18................$59...............$36................$18 ................$26....................$360 100+ ..........................$102................$82.................$31 ...............$23 ...............$21................$69...............$50................$15 ................$18....................$412 St Island *....................$102................$53.................$32 ...............$31 ...............$24................$49...............$45................$19 ................$32....................$387 20+..................................$86................$55.................$29 ...............$31 ...............$23................$41...............$38................$18 ................$19....................$340 * The number of rent stabilized units located in buildings with fewer than 20 units in Brooklyn, the Bronx, Manhattan and Staten Island were too small to calculate reliable statistics. Totals in this table may not match those in Table C3 due to rounding. Data in this table are NOT adjusted for the results of the 1992 Department of Finance audit on I&E reported operating costs. Source: NYC Department of Finance, RPIE Filings 105 Appendices C.3 Cross Sectional Income and Expense Study Estimated Average Rents and Income (1992) by Building Size and Location. Rent Post '46 Income Expenses Rent Pre '47 Income Expenses All Stabilized Rent Income Expenses Citywide.............$664...............$733...............$482 .......................$468..............$518 ..............$364......................$521...............$576 .............$395 11 - 19..............$544...............$951...............$601 .......................$448..............$561 ..............$386......................$449...............$569 .............$401 20 - 99 .............$518...............$555...............$376 .......................$448..............$488 ..............$345......................$456...............$496 .............$351 100+...................$795...............$888...............$570 .......................$607..............$676 ..............$452......................$710...............$792 .............$524 Bronx...................$482...............$515...............$350 .......................$394..............$417 ..............$313......................$428...............$448 .............$320 11 - 19 ....................-......................-......................- .......................$384..............$424 ..............$329......................$398...............$444 .............$339 20 - 99 .............$464...............$483...............$308 .......................$394..............$411 ..............$298......................$401...............$418 .............$300 100+...................$508...............$542...............$382 .......................$403..............$417 ..............$287......................$435...............$455 .............$316 Brooklyn.............$485...............$512...............$370 .......................$406..............$420 ..............$318......................$439...............$461 .............$330 11 - 19 ....................-......................-......................- .......................$374..............$401 ..............$313......................$381...............$408 .............$317 20 - 99 .............$476...............$496...............$359 .......................$407..............$420 ..............$298......................$416...............$429 .............$306 100+...................$505...............$521...............$380 .......................$436..............$446 ..............$306......................$485...............$500 .............$359 Manhattan.......$1,024............$1,180...............$720 .......................$526..............$616 ..............$427......................$632...............$736 .............$490 11 - 19 ....................-......................-......................- .......................$487..............$657 ..............$456......................$487...............$670 .............$464 20 - 99 .............$735...............$851...............$554 .......................$512..............$591 ..............$414......................$523...............$604 .............$421 100+................$1,088............$1,253...............$757 .......................$683..............$780 ..............$519......................$869...............$997 .............$628 Queens................$523...............$565...............$390 .......................$450..............$472 ..............$320......................$491...............$524 .............$360 11 - 19..............$459...............$489...............$334 .......................$410..............$429 ..............$291......................$414...............$434 .............$294 20 - 99 .............$492...............$521...............$360 .......................$442..............$459 ..............$312......................$457...............$478 .............$327 100+...................$556...............$593...............$412 .......................$501..............$513 ..............$351......................$543...............$574 .............$397 St Island * ...........$529...............$605...............$387.............................-- ...................-- ...................--......................$529...............$605 .............$387 City and borough totals are weighted, while figures for building size categories are unweighted. ALL EXPENSE DATA IS UNAUDITED. The number of Post-1946 buildings in the Bronx, Brooklyn and Manhattan were too small to calculate reliable statistics. The number of stabilized buildings in Staten Island was small enough to permit only the preparation of summary statistics. Source: NYC Department of Finance, RPIE Filings. 106 Appendix C: 1994 Income and Expense Study C.4 Cross Sectional Sample, 1994 RPIE Filings Post-'46 Buildings Citywide ........................1,255 11 - 19 ............................ 82 20 - 99 ............................752 100+ ................................421 Units Buildings ................135,970 ............................11,581 ....................1,202..............................3,060 ..................44,629..............................8,145 ..................90,139 ................................376 Pre-'47 Units Buildings All Units ..................450,511..............................12,836 ..................586,481 ....................46,063................................3,142 ....................47,265 ..................330,260................................8,897 ..................374,889 ....................74,188 ..................................797 ..................164,327 Bronx ................................206 ..................14,041..............................2,173 11 - 19 ..............................10........................157 ................................219 20 - 99 ............................173 ....................9,908..............................1,891 100+ ..................................23 ....................3,976 ..................................63 ....................99,004................................2,379 ..................113,045 ......................3,250 ..................................229 ......................3,407 ....................86,652................................2,064 ....................96,560 ......................9,102 ....................................86 ....................13,078 Manhattan ........................280 ..................48,839..............................5,617 11 - 19 ..............................13........................193..............................1,855 20 - 99 ............................110 ....................6,542..............................3,563 100+ ................................157 ..................42,104 ................................199 ..................205,771................................5,897 ..................254,610 ....................27,760................................1,868 ....................27,953 ..................128,262................................3,673 ..................134,804 ....................49,749 ..................................356 ....................91,853 Brooklyn............................274 ..................28,811..............................2,499 11 - 19 ..............................19........................275 ................................609 20 - 99 ............................172 ..................11,412..............................1,835 100+ ..................................83 ..................17,124 ..................................55 Queens ..............................457 ..................42,086..............................1,270 11 - 19 ..............................34........................494 ................................365 20 - 99 ............................270 ..................15,560 ................................848 100+ ................................153.................. 26,032 ..................................57 St Island ..............................38 ....................2,193 11 - 19 ..................................6............................8 20 - 99 ................................27 ....................1,207 100+ ....................................5........................903 Source: NYC Department of Finance, RPIE Filings. ....................94,654................................2,773 ..................123,465 ......................9,233 ..................................628 ......................9,508 ....................78,755................................2,007 ....................90,167 ......................6,666 ..................................138 ....................23,790 ....................50,361................................1,727 ....................92,447 ......................5,627 ..................................399 ......................6,121 ....................36,279................................1,118 ....................51,839 ......................8,455 ..................................210 ....................34,487 ..................................22..........................721 ....................................60 ......................2,914 ....................................2..........................193 ....................................18..........................276 ....................................8 ........................ 312 ....................................35 ......................1,519 ....................................2 ........................ 216 ......................................7 ......................1,119 107 Appendices Appendix D: 1994 RGB Mortgage Survey D.1 Interest Rates for New and Refinanced Mortgages, 1994 Instn. Rate New Mortgages Points Term (yrs) Type Instn. A-02 ............8.63% ....................1.0 ......................5 ....................fxd B-05 ..............7.50% ....................1.0 ......................5 ....................fxd B-06 ............11.00% ....................1.0 ......................5 ............fxd/bal B-13 Did Not Supply B-27..............8.13% ......................1.0......................10 ....................adj B-28 No New Commercial Lending B-60 ............9.25% ......................2.0 ............10 to 25 ....................adj B-62 ............8.50% ......................1.5 ..................5+5 ........fxd + adj B-63 ............8.50% ......................1.0 ..................5+5....................fxd B-64 ............8.25% ......................1.5 ..................5-25....................fxd B-66 ............8.50% ......................1.8......................10 ....................adj B-68 ............9.00% ......................2.0..........10-15 yrs............fxd/adj B-70 ............8.00% ......................1.0........................5....................fxd B-71 ............7.75% ......................1.0........................5....................fxd B-77 ............8.50% ......................1.0........................5....................fxd C-02 ............8.00% ......................1.0......................30....................fxd C-05 ............8.75% ......................1.0....................5+5 ........fxd + adj C-09 ............8.06% ......................1.5 ......................15....................fxd C-28 ............8.50% ......................1.0 ......................25 ....................adj C-30 ....................∆ ................1 to 3 ..............5 to 10 ....................adj C-34 ............9.00% ......................1.0 ........................5....................fxd SL-15 ..........8.00% ......................1.5 ......................15 ....................adj SL-26 Did Not Supply SL-54 ..........9.50% ......................0.0 ..........15, 10-20 ..............fxd 15 bal 10-20 SL-58 Did Not Supply SL-80 ..........8.50% ......................1.0......................15 ....fxd 5, adj 10 Rate Refinanced Mortgages Points Term (yrs) Type A-02 ................8.63%......................1.0 ........................5 ....................fxd B-05 ................7.50%......................1.0 ........................5 ....................fxd B-06 ..............11.00%......................1.0 ..........5-balloon ....................fxd B-13 Did Not Supply B-27 ................8.13%......................1.0 ......................10 ....................adj B-28 ................8.50%......................1.0 ........................5 ....................fxd B-60 ................9.25%......................2.0 ............10 to 25 ....................adj B-62 ................8.50%......................1.5 ....................5+5 ........fxd + adj B-63 ........................*......................1.0 ....................5+5 ....................fxd B-64 ................8.25%......................1.5 ..................5-25 ....................fxd B-66 ................8.75%......................1.8 ......................11 ....................adj B-68 ................9.00%......................2.0 ................10-15 ............fxd/adj B-70 ................8.00%......................1.0 ........................5 ....................fxd B-71 ................7.75%......................0.0 ........................5 ....................fxd B-77 ................8.50%......................1.0 ........................5 ....................fxd C-02 Did Not Supply C-05 ................8.75%......................1.0 ....................5+5 ........fxd + adj C-09 ................8.06%......................1.5 ......................16 ....................fxd C-28 ................8.50%......................1.0 ......................25 ....................adj C-30 ........................∆ ................1 to 3 ..............5 to 10 ....................adj C-34 ................8.75%......................1.0 ........................5 ....................fxd SL-15 ................8.00%......................1.5 ......................15 ....................adj SL-26 Did Not Supply SL-54 ................9.50%......................0.0 ......15 or 10/20 ........fxd or bal SL-58 Did Not Supply SL-80 ................8.50%......................1.0 ......................15 ....fxd 5, adj 10 Avg................8.6% ....................1.17 ..................12.2 A, B = Savings banks, C = Commercial banks, SL = Savings & Loans fxd = fixed, adj = adjustable, bal = balloon ∆: Rate equals prime + 1-3% *: Rate equals 3% + 5 year Treasury Bill Avg ..................8.6%....................1.10....................10.2 Source: 1994 Rent Guidelines Board Mortgage Survey D.2 Interest Rates for New Financing and Refinancing for Lending Institutions Responding in 1993 and 1994 Institution Interest Rates 1994 1993 1994 Points 1993 1994 Term 1993 1994 Type 1993 B-05.................................7.5% ..................8.3% ............................1.0...............1.0...........................5.0 ..............5.0 ............................fxd ....................fxd B-27.................................8.1% ..................9.0% ............................1.0...............1.0.........................10.0 ............10.0 ............................adj.....................adj B-62.................................8.5% ..................9.5% ............................1.5...............1.5 .........................5+5 ............10.0 ........................fxd/adj ............fxd/adj B-70....................................8% ..................8.5% ............................1.0...............1.0...........................5.0 ..............5.0 ............................fxd ....................fxd B-71.................................7.8% ..................9.0% ............................1.0...............1.0...........................5.0 ..............5.0 ............................fxd ....................fxd C-09 ................................8.1% ..................9.0% ............................1.5...............2.0.........................15.0 ............10.0 ............................fxd ....................fxd SL-15 .................................8% ..................9.0% ............................1.5...............1.5.........................15.0.............NA ............................adj ....................fxd Avg ...................................8% ..................8.9% ............................1.2...............1.3...........................9.3 ..............7.5 ..............................-.........................- 108 Note: The difference between new interest rate and refinancing interest rate is negligible. Source: 1994 RGB Mortgage Survey. Appendix D: 1994 RGB Mortgage Survey D.3 Loan Characteristics, 1994 Institution Loan to Value Ratio Vacancy Loss Minimum Building Size Monthly O&M Cost per Unit A-02 ...........................65% .........................2%........................'11-19 ....................Did not Specify B-05 ..........................70% .........................NA ...........................- ........................Did not Specify B-06 ..........................60% .........................4%........................50-99 ....................Did not Specify B-13 ..........................65% .........................3%........................20-49 ...................$220 (w/o taxes) B-27 ..........................65% .........................5%........................'11-19 ....................Did not Specify B-28 ..........................65% .........................2%........................20-49 ..................48-53% of Income B-60 ...........................NA .........................NA ...........................- ........................Did not Specify B-62 ..........................65% .........................5%........................50-99 ........................$175-$200∆ B-63 ..........................60% .........................6%........................'11-19..............................$900 B-64 ...........................NA .........................NA ...........................- ........................Did not Specify B-66 ..........................60% .........................5%........................50-99 ...................$300 (w/o taxes) B-68 ..........................70% .........................5%........................50-99..........................$300-$350 B-70 ..........................60% .........................6% ........................'6-10...............................$250 B-71 ..........................65% .........................2%........................50-99 ....................Did not Specify B-77 ..........................70% .........................5%........................20-49 ....................Did not Specify C-02 ...........................NA .........................NA ...........................- ........................Did not Specify C-05 ..........................80% .........................3%........................20-49 ......................$600 per year C-09 ..........................65% .........................5%........................50-99 ..............................$200 C-28 ..........................70% .........................5%........................50-99 ..............................$325 C-30 ..........................65% .........................6% ........................>100.....................Did not Specify C-34 ..........................65% .........................3%............................-.................50-55% of Gross Income SL-15..........................75% .........................6%........................50-99 ..............................$300 SL-26..........................75% .........................5% ........................'6-10 .....................Did not Specify SL-54..........................55% .........................3%........................20-49 ..............................$225 SL-58..........................70% .........................6% ........................'6-10...............................$650 SL-80..........................65% .........................6%........................20-49 ...............................$65 Avg: ..........................66% .........................4% ..........................50 ....................................* * No monthly average could be computed due to large data variations. ∆ Without taxes or mortgage costs. Source: 1994 RGB Mortgage Survey Appendix E: Tax Arrears in Rent Stabilized Buildings, 1994 E.1 Tax Arrearages, Buildings Three or More Quarters in Arrears, 1988-93. Number of Buildings Number of Units Arrears Per Unit Arrears per Building 1988 2797 40196 $801 $11514 1989 2758 36879 $848 $11339 1990 3037 45622 $931 $13982 Note: Table includes only rent stabilized buildings which have registered with DHCR. Source: NYC Department of City Planning. 1991 3520 55966 $1217 $19345 1992 3816 60900 $1413 $22556 1993 4291 75532 $1527 $26923 109 Appendices F: 1993 Housing and Vacancy Survey, Summary Tables F.1: Occupancy Status Number of Units Occupied Units Bronx Brooklyn Manhattan Queens Staten Island Vacant Units Vacant, available for rent or sale Bronx Brooklyn Manhattan Queens Staten Island Asking Rent <$300 $300-$399 $400-$499 $500-$599 $600-$699 $700-$799 $800-$899 $900-$999 $1000-$1249 $1250 + (Not Reported) Vacant, unavailable for rent or sale Bronx Brooklyn Manhattan Queens Staten Island Dilapidated Rented - Not Yet Occupied Sold - Not Yet Occupied Undergoing Renovation Awaiting Renovation Non-Residential Use Legal Dispute Awaiting Conversion Held for Occasional Use Unable to Rent or Sell Held Pending Sale of Building Held for Planned Demolition Held for Other Reasons (Not Reported) 110 ALL UNITS@ Owner Units Renter Units Stabilized : 2,783,150 806,479 1,976,671 979,026 202,377 20,522 70,345 2,985,527 412,329 816,602 708,215 709,537 136,469 90,867 17,043 25,284 26,881 19,105 2,554 827,001 84,564 219,879 126,974 289,360 85,703 20,522 2,047,016 327,765 596,723 581,241 420,176 50,766 70,345 1,013,097 177,338 254,743 355,310 182,180 9,455 34,071 34,071 3,423 5,269 5,668 5,801 361 13,620 20,015 21,213 13,304 2,193 7,045 9,004 12,807 4,871 344 (13,073) - 1,851 2,063 5,403 12,981 9,579 8,633 5,717 3,268 4,527 3,249 (13,073) 524 1,384 3,806 8,328 4,729 3,343 1,738 1,606 2,117 1,624 (4,871) 11,860 26,254 48,170 21,658 3,568 - - - 111,510 5,136 9,788 4,401 11,427 11,167 1,220 7,915 626 39,603 4,211 2,534 0 12,246 (1,235) - - - - - - @All housing units, including owner-occupied, renter-occupied, vacant for rent, vacant for sale, and vacant unavailable. Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 735,412 277,685 147,090 203,140 279,154 76,008 2,486 30,248 51,603 76,155 106,172 6,970 707,878 27,534 27,534 6,706 7,910 11,200 1,719 0 524 1,384 3,015 7,093 3,846 2,965 1,595 421 1,975 911 (3,803) - 271,148 6,537 6,537 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 101,798 79,138 173,561 91,022 552,126 101,798 10,284 26,666 47,309 16,501 1,037 0 23,123 17,068 26,077 12,870 0 2539 175,362 37,565 59,673 54,164 16,839 5321 1801 - 2539 323 1,234 561 421 0 1801 0 0 791 1,234 883 378 142 1,185 143 713 (1,068) - - - 339 1,094 1,607 3,152 344 - - 0 81,677 - - 93,491 22,751 24,014 37,396 5,241 1619 2469 580,891 Number of Units 56,703 214,560 60,985 186,545 33,333 Bronx Brooklyn Manhattan Queens Staten Island 29,465 508 344 949 0 0 2469 1,002 347 1,121 0 0 29,465 179 0 0 884 401 175 380 0 0 0 (520) 349 0 0 188 0 0 0 0 0 0 (1,264) 799 317 168 84 69 0 0 0 0 0 (1,032) 0 362 1,429 3,498 4,380 5,115 3,599 1,662 2,409 1,625 (5,386) - - - - - - - - - - 4742 9086 5775 8013 1849 - - Occupied Units Vacant Units Vacant, for rent or sale Bronx Brooklyn Manhattan Queens Staten Island Asking Rent <$300 $300-$399 $400-$499 $500-$599 $600-$699 $700-$799 $800-$899 $900-$999 $1000-$1249 $1250 + (Not Reported) Vacant, not for rent or sale Bronx Brooklyn Manhattan Queens Staten Island Dilapidated Rented - Not Yet Occupied Sold - Not Yet Occupied Undergoing Renovation Awaiting Renovation Non-Residential Use Legal Dispute Awaiting Conversion Held for Occasional Use Unable to Rent or Sell Held Pending Sale of Building Held for Planned Demolition Held for Other Reasons (Not Reported) * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. 111 Appendices F.2: Economic Characteristics Monthly Contract Rent $0-$199 $200-$299 $300-$399 $400-$49 $500-$59 $600-$99 $700-799 $800-$899 $900-$999 $1000-$1249 $1250-$1499 $1500+ (Not Reported / No Cash Rent) Mean Mean/Room Median Median/Room Monthly Cost of Electricity Mean Median Monthly Cost of Utility Gas Mean Median Monthly Cost of Water / Sewer Mean Median Monthly Mortgage Payments Mean Median Monthly Insurance Payments Mean Median Monthly Property Taxes Mean Median Owner Households Households Stabilized: - - 170,346 145,079 204,643 317,052 305,329 234,223 159,664 101,759 49,448 70,892 28,079 41,289 (148,870) 36,881 54,920 120,221 184,335 183,487 125,490 73,423 39,879 22,735 39,209 16,601 25,013 (56,831) $54 $45 $74 $64 $44 $40 $41 $35 $62 $25 $121 $100 $29 $20 $22 $18 $34 $33 $34 $33 - - - $978 $800 - - - $54 $46 - - - $136 $117 - - - - @All households, including owners and renters. 112 Renter All Households@ $564 $174 $501 $140 $593 $203 $525 $156 Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 6,222 9,851 16,001 43,734 50,886 39,490 26,448 13,370 8,414 13,420 8,626 12,893 (21,791) 15,742 18,248 14,575 20,503 9,248 3,729 4,288 1,276 1,777 1,367 181 338 (10,528) 6322 5708 8500 16,918 14,763 9492 5483 2598 1304 1968 819 909 (4,938) 80,361 29,320 15,720 24,178 10,374 5482 208 160 0 0 0 0 (7,759) 26,476 23,653 14,430 7224 6236 2822 1423 594 640 164 0 370 (6,991) 4563 13,230 31,197 63,895 81,220 87,208 74,841 57,253 22,992 28,184 10,478 15,244 (61,823) $41 $35 $42 $35 $40 $35 $46 $40 $47 $40 $44 $37 $49 $40 $22 $18 $22 $15 $25 $15 $27 $20 $23 $20 $27 $25 $39 $20 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 30,659 45,069 104,220 140,602 132,601 86,000 46,974 26,508 14,321 25,788 7,975 12,120 (35,039) $555 $193 $500 $150 $695 $231 $590 $175 $392 $112 $366 $93 $517 $160 $498 $138 $266 $67 $203 $51 $306 $92 $253 $76 $688 $202 $640 $162 Monthly Contract Rent $0-$199 $200-$299 $300-$399 $400-$499 $500-$599 $600-$699 $700-$799 $800-$899 $900-$999 $1000-$1249 $1250-$1499 $1500+ (Not Reported) Mean Mean/Room Median Median/Room Monthly Cost of Electricity Mean Median Monthly Cost of Utility Gas Mean Median Monthly Cost of Water / Sewer Mean Median Monthly Mortgage Payments Mean Median Monthly Insurance Payments Mean Median Monthly Property Taxes Mean Median * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding. 113 Appendices F.2: Economic Characteristics (Continued) Owner Households Households Stabilized : 168,808 340,509 355,836 284,847 221,019 161,069 122,184 85,255 55,488 41,865 23,893 102,815 (819,562) 20,225 40,331 73,311 60,632 61,849 57,373 49,203 39,527 28,587 23,311 16,095 61,088 (274,947) 148,583 300,178 282,526 224,214 159,169 103,697 72,981 45,728 26,901 18,554 7,798 41,727 (544,615) 63,010 140,130 138,823 119,295 87,129 51,625 38,930 23,711 12,769 9,743 3,867 26,036 (263,958) - - 80,582 316,462 326,364 179,136 111,965 79,521 56,766 200,441 (625,435) 44,301 168,235 146,089 83,964 53,951 40,912 30,628 112,762 (298,183) Households Below 100% of Poverty Level Households Above 100% of Poverty Level (Not Reported) 479,298 1,484,290 (819,562) 51,134 480,397 (274,947) 428,164 1,003,893 (544,615) 194,846 520,222 (263,958) Households Receiving Public Assistance " " Not Receiving Public Assistance) (Not Reported) 422,328 1,993,991 (366,831) 20,618 666,311 (119,550) 401,710 1,327,680 (247,281) 189,195 659,037 (130,794) 1992 Total Household Income Loss, no income or < $5000 $5000-$9999 $10,000-$19,999 $20,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$69,999 $70,000-$79,999 $80,000-$89,999 $90,000-$99,999 $100,000 + (Not Reported) Mean Median Contract Rent to Income Ratio <10% 10%-19% 20%-29% 30%-39% 40%-49% 50%-59% 60%-69% 70% + (Not Computed / Reported) Mean Median Households in Poverty Households Below 125% of Poverty Level Households Above 125% of Poverty Level (Not Reported) Households Receiving Rent Subsidy " " Not Receiving Rent Subsidy Did Not Know (Not Reported) $35,732 $23,000 - 594,233 1,369,355 (819,562) - $57,569 $40,500 - 70,647 460,884 (274,947) - @All households, including owners and renters. 114 Renter All Households@ $27,627 $19,005 45.3% 28.2% 523,585 908,471 (544,615) 179,564 1,488,653 41,332 (267,122) $29,042 $20,160 47.8% 28.2% 239,815 475,253 (263,958) 78,440 742,656 18,839 (139,091) Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 50,820 117,115 101,912 89,683 63,752 35,998 26,085 16,590 7,576 5,885 2,652 14,462 (175,348) $26,562 $19,288 31,482 122,230 109,047 60,953 39,155 30,834 24,427 91,028 (198,722) 46.6% 28.8% 12,189 23,015 36,911 29,612 23,378 15,627 12,845 7,121 5,193 3,858 1,216 11,574 (88,610) $36,278 $24,700 12,819 46,005 37,042 23,011 14,796 10,077 6,202 21,734 (99,462) 51.6% 27.1% Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 4,073 19,447 18,276 7,919 4,758 4,069 2,772 1,096 1,207 1,746 189 870 (35,377) 4996 12,511 9,262 9,441 5,698 5,051 2,399 1,606 648 369 176 1408 (25,572) 32,496 50,735 31,200 16,712 6,569 2,574 706 718 172 0 187 204 (31,289) - - $23,252 $14,400 9,242 15,625 9,522 8,380 6,393 4,295 3,047 5,585 (39,709) 32.9% 25.8% $25,866 $19,068 344 5,978 5,708 8,500 16,918 14,763 9,492 12,497 (4,938) 43.3% 27.9% $12,385 $7800 2,144 78,217 29,320 15,720 24,178 10,374 5,482 367 (7,759) 37.1% 28.2% - - - - 165,614 366,916 (175,348) 29,232 153,306 (88,610) 14,740 51,682 (35,377) 14,296 39,270 (25,572) 83,457 58,816 (31,289) 41,701 29,215 (20,106) 79,124 304,683 (168,319) 165,571 453,387 (88,920) 23,625 205,650 (41,874) 11,316 76,232 (14,249) 9,730 56,386 (13,022) 80,605 78,268 (14,689) 40,883 41,880 (8,259) 69,981 415,877 (66,268) (94,076) (45,015) (15,072) (14,447) (18,454) 200,803 331,727 (175,348) 64,202 535,059 14,541 39,012 143,526 (88,610) 14,238 207,597 4,297 21,825 44,596 (35,377) 5,086 79,629 2,010 17,689 35,877 (25,572) 14,626 47,423 2,642 94,500 47,773 (31,289) 29,513 117,687 7,908 48,679 22,237 (20,106) 29,952 47,520 3,925 (9,625) 101,078 282,729 (168,319) 21,948 453,737 6,009 (70,433) 1992 Total Household Income < $5000 $5000-$9999 $10,000-$19,999 $20,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$69,999 $70,000-$79,999 $80,000-$89,999 $90,000-$99,999 $100,000 + (Not Reported) Mean Median Contract Rent / Household Income <10% 10%-19% 20%-29% 30%-39% 40%-49% 50%-59% 60%-69% 70% + (Not Reported) Mean Median Households in Poverty Households < 100% of Poverty Level Households > 100% of Poverty Level (Not Reported) Households < 125% of Poverty Level Households > 125% of Poverty Level (Not Reported) HH’s Receiving Public Assistance " " Not Receiving P. Assistance (Not Reported) Households Receiving Rent Subsidy " " Not Receiving Rent Subsidy Do Not Know (Not Reported) * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. 115 Appendices F.2: Economic Characteristics (Continued) Monthly Contract Rent $0-$199 $200-$299 $300-$399 $400-$499 $500-$599 $600-$699 $700-$799 $800-$899 $900-$999 $1000-$1249 $1250-$1499 $1500+ (Not Reported / No Cash Rent) Mean Mean/Room Median Median/Room Monthly Cost of Utilities Mean Median Monthly Cost of Water/Sewer Mean Median Monthly Cost of Fuel Mean Median Monthly Mortgage Payments Mean Median Monthly Insurance Payments Mean Median Monthly Property Taxes Mean Median Owner Households Households Stabilized : - - - - 9.3% 7.9% 11.2% 17.4% 16.7% 12.8% 8.7% 5.6% 2.7% 3.9% 1.5% 2.3% - 4.0% 6.0% 13.0% 20.0% 19.9% 13.6% 8.0% 4.3% 2.5% 4.3% 1.8% 2.7% - - - - - - - - - - - - - - - - - - - - - - - - - @All households, including owners and renters. Totals may not add to 100% due to rounding. 116 Renter All Households@ - - Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 2.5% 4.0% 6.4% 17.5% 20.4% 15.8% 10.6% 5.4% 3.4% 5.4% 3.5% 5.2% - 17.3% 20.0% 16.0% 22.5% 10.1% 4.1% 4.7% 1.4% 2.0% 1.5% 0.2% 0.4% - 8.6% 7.7% 11.5% 22.8% 19.9% 12.8% 7.4% 3.5% 1.8% 2.7% 1.1% 0.4% - 48.5% 17.7% 9.5% 14.6% 6.3% 3.3% 0.1% 0.1% 0 0 0 0 - 31.5% 28.1% 17.2% 8.6% 7.4% 3.4% 1.7% 0.7% 0.8% 0.2% 0 0.4% - 0.9% 2.7% 6.4% 13.0% 16.6% 17.8% 15.3% 11.7% 4.7% 5.7% 2.1% 3.1% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4.4% 6.7% 15.5% 20.9% 19.7% 12.8% 7.0% 3.9% 2.1% 3.8% 1.2% 1.8% - - - - - - - Monthly Contract Rent $0-$199 $200-$299 $300-$399 $400-$499 $500-$599 $600-$699 $700-$799 $800-$899 $900-$999 $1000-$1249 $1250-$1499 $1500+ (Not Reported) Mean Mean/Room Median Median/Room Monthly Cost of Utilities Mean Median Monthly Cost of Water/Sewer Mean Median Monthly Cost of Fuel Mean Median Monthly Mortgage Payments Mean Median Monthly Insurance Payments Mean Median Monthly Property Taxes Mean Median * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding 117 Appendices F.2: Economic Characteristics (Continued) 1992 Total Household Income < $5000 $5000-$9999 $10,000-$19,999 $20,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$69,999 $70,000-$79,999 $80,000-$89,999 $90,000-$99,999 $100,000 + Mean Median Contract Rent / Household Income <10% 10%-19% 20%-29% 30%-39% 40%-49% 50%-59% 60%-69% 70% + (Not Reported) Mean Median Households in Poverty Households Below 100% of Poverty Level Households Above 100% of Poverty Level (Not Reported) Households Below 125% of Poverty Level Households Above 125% of Poverty Level (Not Reported) Households Receiving Public Assistance (Not Reported) Households Receiving Rent Subsidy (Not Reported) Owner Households Households Stabilized : 8.6% 17.3% 18.1% 14.5% 11.3% 8.2% 6.2% 4.3% 2.8% 2.1% 1.2% 5.2% 3.8% 7.6% 13.8% 11.4% 11.6% 10.8% 9.3% 7.4% 5.4% 4.4% 3.0% 11.5% 10.4% 21.0% 19.7% 15.7% 11.1% 7.2% 5.1% 3.2% 1.9% 1.3% 0.5% 2.9% 8.8% 19.6% 19.4% 16.7% 12.2% 7.2% 5.4% 3.3% 1.8% 1.4% 0.5% 3.6% - - 6.0% 23.4% 24.2% 13.3% 8.3% 5.9% 4.2% 14.8% - 6.5% 24.7% 21.5% 12.3% 7.9% 6.0% 4.5% 16.6% - 24.4% 75.6% - 9.6% 90.4% - 29.9% 70.1% - 27.2% 72.8% - - - - - - - - - 30.3% 69.7% - 13.3% 86.7% - 36.6% 63.4% - 33.5% 66.5% - - - 10.5% - - 17.5% - 3.0% - @All households, including owners and renters. Totals may not add to 100% due to rounding. 118 Renter All Households @ 23.2% - 22.3% - Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 9.5% 22.0% 19.1% 16.9% 12.0% 6.8% 4.9% 3.1% 1.4% 1.1% 0.5% 2.7% 6.7% 12.6% 20.3% 16.3% 12.8% 8.6% 7.0% 3.9% 2.8% 2.1% 0.7% 6.3% 6.1% 29.3% 27.5% 12.0% 7.2% 6.1% 4.2% 1.6% 1.8% 2.6% 0.3% 1.3% 9.3% 23.4% 17.7% 17.3% 10.6% 9.4% 4.5% 3.0% 1.2% 0.7% 0.3% 2.6% 22.8% 35.7% 22.1% 11.5% 4.4% 2.0% 0.5% 0.5% 0.1% 0.1% 0.1% - - 1992 Total Household Income < $5000 $5000-$9999 $10,000-$19,999 $20,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$69,999 $70,000-$79,999 $80,000-$89,999 $90,000-$99,999 $100,000 + 6.2% 24.0% 21.4% 12.0% 7.7% 6.1% 4.8% 17.9% - 7.5% 26.8% 21.6% 13.4% 8.6% 5.9% 3.6% 12.7% - 14.9% 25.2% 15.4% 13.5% 10.3% 6.9% 4.9% 9.0% - 5.0% 23.9% 25.5% 16.2% 8.4% 4.4% 3.4% 13.2% - 4.1% 13.9% 40.6% 18.0% 7.8% 5.1% 2.9% 7.6% - - - Contract Rent / Household Income <10% 10%-19% 20%-29% 30%-39% 40%-49% 50%-59% 60%-69% 70% + (Not Reported) - - - - - - - - - - - - - - 31.1% 68.9% - 16.0% 84.0% - 22.2% 77.8% - 26.7% 73.3% - 58.7% 41.3% - 58.8% 41.2% - 20.6% 79.4% - 26.7% - 10.3% - 12.9% - 14.7% - 50.7% - 49.4% - 14.4% - 37.7% 62.3% - 10.5% - 21.4% 78.6% - 6.3% - 32.9% 67.1% - 5.9% - 33.0% 67.0% - 22.6% - 66.4% 33.6% - 19.0% - 68.6% 31.4% - 38.7% - 26.3% 73.7% - 4.6% - Mean Median Mean Median Households in Poverty Households < 100% of Poverty Level Households > 100% of Poverty Level (Not Reported) Households < 125% of Poverty Level Households > 125% of Poverty Level (Not Reported) Households Receiving Welfare (Not Reported) Households Receiving Rent Subsidy (Not Reported) * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding. 119 Appendices F.3: Demographic Characteristics Year Moved Into Current Dwelling 1990-93 1987-89 1984-86 1981-83 1971-80 Prior to 1971 Household Composition Married Couples W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members W/o. Other Household Members (Not Reported) Female Householder W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members W/o. Other Household Members (Not Reported) Male Householder W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members W/o. Other Household Members (Not Reported) (Sex Not Reported) Race of Householder White, non-Hispanic Black, non-Hispanic Puerto Rican Other Hispanic Asian / Pacific Islander Other (Not Reported) Age of Householder Under 25 years 25-34 35-44 45-54 55-61 62-64 65-74 75-84 85 or more years (Not Reported) Mean Median 120 Owner Renter All Households@ Households Households Stabilized : 815,107 413,501 241,852 217,265 640,532 454,893 107,726 116,330 78,994 62,719 216,530 224,180 707,381 297,171 162,858 154,546 424,002 230,714 360,663 146,624 80,545 86,807 233,047 71,340 1,070,878 362,842 155,431 131,272 404,927 (16,406) 459,064 128,355 88,324 60,612 173,899 (7,874) 611,814 234,487 67,107 70,661 231,028 (8,532) 293,801 112,602 30,962 33,033 113,203 (4,001) 1,138,646 213,303 223,564 127,358 564,171 (10,252) 233,497 13,215 61,686 18,869 136,848 (2,880) 905,149 200,088 161,878 108,489 427,323 (7,372) 430,673 89,088 79,333 46,979 212,314 (2959) (15,241) (3,342) (11,899) (6,439) 1,323,551 640,206 279,695 285,846 160,500 42,359 (50,992) 522,135 142,732 33,596 34,285 49,569 9,166 (14,995) 801,416 497,474 246,099 251,561 110,931 33,193 (35,997) 420,083 190,214 114,063 157,218 58,400 18,190 (20,857) 110,933 563,209 646,414 467,503 250,900 108,116 317,395 186,973 57,362 (74,343) 5,440 83,838 164,714 163,675 101,758 46,600 129,428 69,852 16,037 (25,135) 105,493 479,371 481,700 303,828 149,142 61,516 187,967 117,121 41,325 (49,208) 56,924 245,144 259,167 160,829 68,752 27,879 78,834 43,543 14,112 (23,842) 558,384 13,677 151,400 30,849 357,838 (4,618) 49.5 46.0 110,576 3,028 30,901 8,866 67,072 (708) 55.1 53.0 @All households, including owners and renters. 447,808 10,649 120,498 21,983 290,766 (3,911) 47.3 42.0 248,113 5,111 65,226 10,247 165,951 (1577) 45.7 41.0 Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 272,726 113,358 59,857 64,903 165,619 31,416 87,938 33,265 20,688 21,903 67,428 39,925 0 0 0 2,498 13,355 85,945 17,773 14,324 7,590 5,971 29,143 4,337 27,127 25,668 18,874 14,023 50,164 37,706 23,757 13,180 14,601 12,433 20,713 6,339 278,062 97,376 41,247 32,815 77,580 25,046 200,694 82,915 22,246 24,200 68,209 (3,125) 93,107 29,687 8,716 8,833 44,995 (877) 25,611 2,340 3,689 1,441 17,829 (313) 25,019 8,292 3,175 1,577 11,416 (558) 29,117 9,137 5,439 5,177 8,208 (1,156) 13,032 4,379 1,333 1,619 5,379 (322) 225,232 97,736 22,509 27,813 74,993 (2,182) 63,724 1,260 13,434 1,328 47,526 (176) 23,162 780 3,696 710 17,976 (0) 20,434 1,467 4,149 663 13,821 (333) 16,222 850 2,730 1,275 11,367 (0) 126,053 1,835 41,156 8,553 72,910 (1599) 318,311 74,373 60,060 42,193 139,300 (2,386) 112,361 14,716 19,273 4,786 73,013 (573) (4,485) (1,955) 267,524 136,092 102,261 132,127 43,035 13,059 (13,779) 152,559 54,122 11,802 25,090 15,365 5,131 (7,078) 72,743 10,063 7,391 7,754 1,586 320 (1,940) 26,915 33,664 7,273 5,065 2,793 1,175 (2,252) 14,712 91,714 48,454 12,241 2,878 1,797 (1765) 16,436 42,418 18,741 9,783 1,378 1,335 (932) 250,526 129,401 50,176 59,500 43,896 10,376 (8,250) 46,605 191,968 194,839 114,732 48,112 20,249 46,765 22,152 6,792 (15,663) 10,318 53,176 64,329 46,097 20,639 7,630 32,069 21,391 7,319 (8,178) 1,487 2,313 6,142 11,722 12,220 5,477 26,166 22,303 11,383 (2,584) 2,695 10,879 15,233 14,630 8,018 4,007 9,364 7,767 3,149 (3,397) 7,218 28,381 33,843 30,067 19,533 7,113 25,526 14,375 2,923 (4,582) 3,507 18,046 19,157 12,932 6,910 2,738 13,165 9,531 3,609 (1,428) 33,663 174,608 148,158 73,648 33,709 14,302 34,911 19,602 6,149 (13,376) 184,388 3,851 51,792 8,918 118,425 (1,401) 43.9 40.0 50.3 46.0 52,848 1,339 8,143 1,970 41,214 (182) 39,962 7,876 4,301 3,450 24,178 (157) 123,479 39,374 18,570 21,668 42,052 (1,815) (177) (333) (531) 66.9 70.0 13,824 607 3,539 536 8,740 (402) 54.2 52.0 52.0 50.0 61,192 18,876 9,582 8,385 24,209 (140) (575) 51.0 47.0 196,997 43,536 41,949 26,037 83,356 (2,119) (3,844) 43.0 39.0 Year Moved Into Current Dwelling 1990-93 1987-89 1984-86 1981-83 1971-80 Prior to 1971 Household Composition Married Couples W. Children < 18 Years of Age W. No Children < 18 Years of Age W. Other Household Members W/o Other Household Members (Not Reported) Female Householder W. Children < 18 Years of Age W. No Children < 18 Years of Age W. Other Household Members W/o Other Household Members (Not Reported) Male Householder w. Children < 18 Years of Age W. No Children < 18 Years of Age W. Other Household Members w/o Other Household Members (Not Reported) (Sex Not Reported) Race of Householder White, non-Hispanic Black, non-Hispanic Puerto Rican Other Latino Asian / Pacific Islander Other (Not Reported) Age of Householder Under 25 years 25-34 35-44 45-54 55-61 62-64 65-74 75-84 85 or more years (Not Reported) Mean Median * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. 121 Appendices F.3: Demographic Characteristics (Continued) Year Moved Into Current Dwelling 1990-93 1987-89 1984-86 1981-83 1971-80 Prior to 1971 Household Composition Married Couples W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members W/O. Other Household Members (Not Reported) Female Householder W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members w/o Other Household Members (Not Reported) Owner Households Households Stabilized : 29.3% 14.9% 8.7% 7.8% 23.0% 16.3% 13.4% 14.4% 9.8% 7.8% 26.8% 27.8% 35.8% 15.0% 8.2% 7.8% 21.5% 11.7% 36.8% 15.0% 8.2% 8.9% 23.8% 7.3% 38.5% 13.3% 5.7% 4.8% 14.8% - 57.0% 16.2% 11.2% 7.7% 22.0% - 31.0% 11.9% 3.5% 3.6% 12.1% - 30.1% 11.7% 3.2% 3.4% 11.7% - 41.3% 7.8% 8.2% 4.7% 20.6% - 29.0% 1.7% 7.8% 2.4% 17.3% 13.9% 0.4% 3.9% 1.1% 8.5% - 22.8% 0.6% 6.2% 1.1% 15.0% - 25.6% 0.5% 6.8% 1.1% 17.2% - White, non-Latino Black, non-Latino Puerto Rican Other Latino Asian / Pacific Islander Other (Not Reported) 48.4% 23.4% 10.2% 10.5% 5.9% 1.6% - 66.0% 18.0% 4.2% 4.3% 6.3% 1.2% - 41.3% 25.6% 12.7% 13.0% 5.7% 1.7% - 43.8% 19.9% 11.9% 16.4% 6.1% 1.9% - Under 25 years 25-34 35-44 45-54 55-61 62-64 65-74 75-84 85 or more years 4.1% 20.8% 23.9% 17.3% 9.3% 4.0% 11.7% 6.9% 2.1% 0.7% 10.7% 21.1% 20.9% 13.0% 6.0% 16.6% 8.9% 2.1% 5.5% 24.9% 25.0% 15.8% 7.7% 3.2% 9.8% 6.1% 2.1% 6.0% 25.7% 27.1% 16.8% 7.2% 2.9% 8.3% 4.6% 1.5% Male Householder W. Children < 18 Years of Age W/O. Children < 18 Years of Age W. Other Household Members W/O Other Household Members (Not Reported) (Sex Not Reported) Race of Householders Age of Householders Mean Median 20.2% 0.5% 5.5% 1.1% 13.1% - - - @All households, including owners and renters. 122 Renter All Households@ Totals may not add to 100% due to rounding. 46.2% 10.3% 8.3% 5.6% 22.0% - - 44.4% 9.2% 8.2% 4.9% 22.0% - - Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 38.5% 16.0% 8.5% 9.2% 23.4% 4.4% 32.4% 12.3% 7.6% 8.1% 24.9% 14.7% 0.0% 0.0% 0.0% 2.5% 13.1% 84.4% 22.5% 18.1% 9.6% 7.6% 36.8% 5.5% 15.6% 14.8% 10.9% 8.1% 28.9% 21.7% 26.1% 14.5% 16.0% 13.7% 22.8% 7.0% 50.4% 17.6% 7.5% 5.9% 14.1% 4.5% 28.4% 11.9% 3.2% 3.5% 9.8% - 34.5% 11.1% 3.3% 3.3% 16.8% - 25.0% 2.3% 3.7% 1.4% 17.6% - 31.5% 10.7% 4.1% 2.0% 14.7% - 16.5% 5.4% 3.2% 3.1% 4.8% - 14.2% 4.9% 1.5% 1.8% 6.0% - 41.0% 18.0% 4.1% 5.1% 13.8% - 26.3% 0.6% 7.4% 1.3% 17.0% - 23.8% 0.5% 5.0% 0.5% 17.8% - 22.9% 0.8% 3.7% 0.7% 17.8% - 17.3% 0.8% 4.6% 0.7% 11.3% - 17.9% 0.9% 3.0% 1.4% 12.6% - 22.9% 0.3% 7.6% 1.6% 13.4% - 38.5% 19.6% 14.7% 19.0% 6.2% 1.9% - 57.8% 20.5% 4.5% 9.5% 5.8% 1.9% - 72.8% 10.1% 7.4% 7.8% 1.6% 0.3% - 35.0% 43.8% 9.5% 6.6% 4.3% 0.8% - 8.6% 53.4%% 28.2% 7.1% 2.2% 0.5% - 18.2% 47.1% 20.8% 10.9% 1.5% 1.5% - 46.1% 23.8% 9.2% 10.9% 8.1% 1.9% - 6.7% 27.7% 28.1% 16.6% 7.0% 2.9% 6.8% 3.2% 1.0% 3.9% 20.2% 24.5% 17.5% 7.8% 2.9% 12.2% 8.1% 2.8% 1.5% 2.3% 6.2% 11.8% 12.3% 5.5% 26.4% 22.5% 11.5% 3.6% 14.4% 20.1% 19.3% 10.6% 5.3% 12.4% 10.3% 4.2% 4.3% 16.8% 20.0% 17.8% 11.6% 4.2% 15.1% 8.5% 1.7% 3.9% 20.1% 21.4% 14.4% 7.7% 3.1% 14.7% 10.6% 4.0% 6.2% 32.4% 27.5% 13.7% 6.3% 2.7% 6.4% 3.6% 1.1% 45.4% 10.7% 8.6% 6.1% 20.0% - - 41.8% 5.5% 7.2% 1.8% 27.3% - - 51.9% 1.3% 8.1% 2.0% 40.5% - - 51.2% 10.1% 5.5% 4.4% 31.1% - - 71.7% 23.2% 10.9% 12.8% 24.8% 11.8% 0.9% 2.4% 0.4% 8.1% - - 67.8% 21.0% 10.6% 9.3% 26.9% - - 36.0% 8.0% 7.7% 4.8% 15.5% - - Year Moved Into Current Dwelling 1990-93 1987-89 1984-86 1981-83 1971-80 Prior to 1971 Household Composition Married Couples W. Children < 18 Years of Age W/o Children < 18 Years of Age W. Other Household Members W/o Other Household Members (Not Reported) Female Householder W. Children < 18 Years of Age W/o Children < 18 Years of Age W. Other Household Members W/o Other Household Members (Not Reported) Male Householder W. Children < 18 Years of Age W/o Children < 18 Years of Age W. Other Household Members W/o Other Household Members (Not Reported) (Sex Not Reported) Race of Householders White, non-Latino Black, non-Latino Puerto Rican Other Latino Asian / Pacific Islander Other (Not Reported) Age of Householders Under 25 years 25-34 35-44 45-54 55-61 62-64 65-74 75-84 85 or more years Mean Median * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding. 123 Appendices F.4: Housing / Neighborhood Quality Characteristics Maintenance Quality (Units experiencing:) Additional Heating Required “ “ Not Required (Not Reported) Heating Breakdowns No Breakdowns (Not Reported) Broken Plaster/Peeling Paint No Broken Plaster/Peeling Paint (Not Reported) Cracked Interior Walls or Ceilings No Cracked Walls or Ceilings (Not Reported) Holes in Floor No Holes in Floor (Not Reported) Rodent Infestation No Infestation (Not Reported) Toilet Breakdown No Toilet Breakdown (Not Reported) Water Leakage Inside Unit No Water Leakage (Not Reported) Units in Buildings w. No Maintenance Defects Units in Buildings w. 1 Maintenance Defect Units in Buildings w. 2 Maintenance Defects Units in Buildings w. 3 Maintenance Defects Units in Buildings w. 4 Maintenance Defects Units in Buildings w. 5+ Maintenance Defects (Not Reported) Condition of Neighboring Buildings Excellent Good Fair Poor Quality (Not Reported) Units Close to " Boarded-Up " Buildings Units Not Close to “ “ (Not Reported) All Units@ Owner Units Renter Units Stabilized : 369,743 2,112,447 (300,960) 416,905 2,056,309 (309,936) 464,523 1,994,160 (324,467) 362,518 2,120,120 (300,512) 181,642 2,251,073 (350,435) 615,041 1,870,356 (297,753) 259,310 2,399,225 (124,614) 526,084 1,952,352 (304,715) 1,124,639 541,271 294,316 180,796 103,206 102,296 (436,626) 47,458 659,261 (99,760) 60,698 644,408 (101,372) 57,157 645,978 (103,344) 25,896 682,170 (98,413) 7908 680,954 (117,618) 59,466 647,297 (99,716) 51,687 698,881 (55,911) 99,205 607,053 (100,221) 436,184 154,988 50,140 17,861 4491 3,323 (139,493) 322,285 1,453,186 (201,200) 356,207 1,411,901 (208,564) 407,366 1,348,182 (221,123) 336,621 1,437,951 (202,099) 173,734 1,570,120 (232,818) 555,575 1,223,059 (198,038) 207,623 1,700,344 (68,704) 426,879 1,345,299 (204,494) 688,455 386,283 244,177 162,935 98,715 98,973 (297,134) 160,634 711,890 (106,502) 204,024 662,612 (112,390) 239,078 620,457 (119,491) 200,100 671,990 (106,935) 109,880 747,121 (122,025) 324,811 549,899 (104,316) 111,005 834,666 (30,355) 251,625 619,443 (107,958) 288,779 194,096 126,405 89,846 60,451 63,583 (155,865) 372,933 1,315,754 633,005 158,115 (303,344) 173,441 418,314 103,487 10,121 (101,116) 199,492 897,440 529,518 174,994 (202,228) 87,764 439,870 268,831 74,862 (107,698) 432,546 2,081,949 (268,655) 87,158 627,241 (92,080) 345,388 1,454,708 (176,575) 162,927 718,635 (97,464) @All housing units, including owner-occupied, renter-occupied, vacant for rent, vacant for sale, and vacant unavailable. 124 Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 129,667 504,517 (73,694) 167,154 463,680 (77,044) 200,960 423,550 (88,368) 174,766 459,652 (73,460) 103,013 521,069 (83,795) 274,302 361,762 (71,814) 86,036 596,055 (25,787) 205,089 428,160 (74,629) 30,967 207,373 (32,808) 36,870 198,933 (35,345) 38,119 196,907 (36,122) 25,335 212,338 (33,475) 6,867 226,051 38,230 50,509 188,137 (32,502) 24,968 238,612 (7,568) 46,537 191,283 (33,328) Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 15,414 75,353 (11,031) 17,814 73,000 (10,984) 25,557 63,398 (12,843) 17,846 72,301 (11,651) 9,708 79,556 (12,534) 25,106 65,308 (11,384) 9,339 88,138 (4321) 24,231 66,106 (11,460) 10,523 56,876 (11,739) 8,124 59,071 (11,943) 8,618 58,699 (11,821) 5,997 61,558 (11,538) 1931 63,777 (13,430) 12,941 54,711 (11,426) 6,505 69,098 (3,535) 10,641 57,004 (11,493) 44,462 118,144 (10,956) 37,206 124,537 (11,818) 44,399 115,225 (13,938) 35,552 126,134 (11,876) 11,144 147,343 (15,074) 55,926 105,675 (11,960) 21,871 147,849 (3,841) 41,358 120,104 (12,098) 25,438 59,083 (6502) 24,084 60,277 (6.661) 21,355 62,376 (7,292) 26,099 58,032 (6,891) 15,607 67,092 8,324 46,643 37,889 (6,491) 14,157 74,784 (2,083) 29,472 54,689 (6,861) 65,815 431,841 (54,470) 64,955 432,403 (54,768) 68,361 428,027 (55,768) 51,027 447,936 (53,163) 25,464 465,231 61,432 90,148 409,517 (52,461) 44,747 485,809 (21,569) 69,551 427,952 (54,623) 176,435 138,958 99,506 74,853 52,585 58,315 (107,226) 112,344 55,138 26,899 14,993 7,867 5,268 (48,639) 33,662 85,784 33,662 19,087 14,379 4,795 (16,014) 32,207 16,283 8,459 5,402 331 1,035 (15,421) 54,040 296,383 219,982 64,161 (73,313) 33,724 143,488 48,849 10,702 (34,386) 12,273 47,988 24,865 5,494 (11,177) 7,194 34,939 23,602 1,831 (11,572) 133,881 508,530 (65,467) 29,046 210,105 (31,997) 12,661 80,164 (8,973) 11,114 57,844 (10,150) 47,216 36,880 27,880 20,968 11,099 8,463 (21,117) 19,957 16,345 12,079 11,309 9,502 10,757 (11,055) 266,634 103,592 55,036 26,164 12,716 10,340 (77,662) 5,686 54,596 69,951 31,384 (11,945) 4,119 29,675 36,068 14,469 (6,691) 82,456 290,371 106,201 19,954 (53,144) 49,929 112,722 (10,910) 33,499 52,570 (4,953) 75,258 432,024 (44,844) Maintenance Quality (Units experiencing:) Additional Heating Required “ “ Not Required (Not Reported) Heating Breakdowns No Heating Breakdown (Not Reported) Broken Plaster/Peeling Paint No Broken Plaster/ Paint (Not Reported) Cracked Walls or Ceilings No Cracked Walls or Ceilings (Not Reported) Holes in Floor No Holes in Floor (Not Reported) Rodent Infestation No Infestation (Not Reported) Toilet Breakdown No Toilet Breakdown (Not Reported) Water Leakage Inside Unit No Water Leakage (Not Reported) Units in Buildings w. No Defects Units in Buildings w. 1 Defect Units in Buildings w. 2 Defects Units in Buildings w. 3 Defects Units in Buildings w. 4 Defects Units in Buildings w. 5+ Defects (Not Reported) Condition of Neighboring Buildings Excellent Good Fair Poor Quality (Not Reported) Units Close to " Boarded-Up " Buildings Units Not Close to “ “ (Not Reported) * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding. 125 Appendices F.4: Housing / Neighborhood Quality Characteristics (Continued) Maintenance Quality (Units experiencing:) Additional Heating Required “ “ Not Required (Not Reported) Heating Breakdowns No Breakdowns (Not Reported) Broken Plaster/Peeling Paint No Broken Plaster/Peeling Paint (Not Reported) Cracked Interior Walls or Ceilings No Cracked Walls or Ceilings (Not Reported) Holes in Floors No Holes in Floors (Not Reported) Rodent Infestation No Infestation (Not Reported) Toilet Breakdown No Toilet Breakdowns (Not Reported) Water Leakage Inside Unit No Water Leakage (Not Reported) All Dwellings@ Owner Units Rental Units Stabilized : 14.9% 85.1% 16.9% 83.1% 18.9% 81.1% 14.6% 85.4% 7.5% 92.5% 24.9% 75.1% 9.8% 90.2% 21.2% 78.8% - 6.7% 93.3% 8.6% 91.4% 8.1% 91.9% 3.7% 96.3% 1.1% 98.9% 8.5% 91.5% 6.9% 92.1% 14.1% 85.9% - 18.2% 81.8% 20.2% 79.9% 23.2% 76.8% 19.0% 81.0% 10.0% 90.0% 31.3% 68.7% 10.9% 89.1% 24.1% 75.9% - 18.4% 81.6% 23.5% 76.5% 27.8% 72.2% 22.9% 77.1% 12.8% 87.2% 37.2% 62.8% 11.7% 88.3% 28.9% 71.1% - 11.2% 50.6% 29.8% 8.3% - 10.1% 50.5% 30.9% 8.6% - Units in Buildings w. No Maintenance Defects Units in Buildings w. 1 Maintenance Defect Units in Buildings w. 2 Maintenance Defects Units in Buildings w. 3 Maintenance Defects Units in Buildings w. 4 Maintenance Defects Units in Buildings w. 5+ Maintenance Defects (Not Reported) 47.9% 23.1% 12.5% 7.7% 4.4% 4.4% - 65.4% 23.2% 7.5% 2.7% 0.7% 0.5% - Excellent Good Fair Poor Quality (Not Reported) 15.0% 53.1% 25.5% 6.4% - 24.6% 59.3% 14.7% 1.4% - Condition of Neighboring Buildings Units Close to " Boarded-Up " Buildings Units Not “ “ (Not Reported) 17.2% 82.8% - 12.2% 87.8% - 41.0% 23.0% 14.5% 9.7% 5.9% 5.9% - 19.2% 80.8% - 35.1% 23.6% 15.4% 10.9% 7.3% 7.8% - 18.5% 81.5% - @All housing units, including owner-occupied, renter-occupied, vacant for rent, vacant for sale, and vacant unavailable. Totals may not add to 100% due to rounding. 126 Appendix F: 1993 Housing and Vacancy Survey Report Rent Stabilized Units Pre-1947 Post-1946 20.5% 79.5% 26.5% 73.5% 32.2% 67.8% 27.5% 72.5% 16.5% 83.5% 43.2% 56.8% 12.6% 87.4% 32.4% 67.6% - 29.4% 23.1% 16.6% 12.5% 8.8% 9.7% - 8.5% 46.7% 34.7% 10.1% 20.8% 79.2% - 13.0% 87.0% 15.6% 84.4% 16.3% 83.7% 10.7% 89.3% 2.9% 97.1% 21.2% 68.8% 9.5% 90.5% 19.6% 80.4% - 50.5% 24.8% 12.1% 6.7% 3.5% 2.4% - 14.2% 60.6% 20.6% 4.5% 12.2% 87.8% - Rent Controlled MitchellLama Public Housing Other Regulated* Other Rentals** 17.0% 83.0% 19.6% 80.4% 28.7% 71.3% 19.8% 80.2% 15.6% 84.4% 12.1% 87.9% 12.9% 87.1% 8.9% 91.1% 27.3% 72.7% 23.0% 77.0% 27.9% 72.1% 22.0% 78.0% 30.1% 69.9% 28.5% 71.5% 25.5% 74.5% 31.0% 69.0% 13.2% 86.8% 13.1% 86.9% 13.8% 86.2% 10.2% 89.8% 15.9% 84.1% 35.0% 65.0% - - 10.9% 89.1% 28.0% 72.0% 9.6% 90.4% 26.8% 73.2% - 39.2% 22.3% 16.8% 10.8% 5.4% 5.6% - 13.5% 53.0% 27.4% 6.1% 13.6% 86.4% - 2.9% 97.1% 19.0% 81.0% 8.6% 91.4% 15.7% 84.3% - 50.6% 25.6% 13.3% 8.5% 0.5% 1.6% - 10.7% 51.7% 34.9% 2.7% 16.1% 83.9% - 7.0% 93.0% 34.7% 65.3% 12.9% 87.1% 25.6% 74.4% - 31.0% 24.2% 18.3% 13.8% 7.3% 5.6% - 3.5% 33.8% 43.3% 19.4% 30.6% 69.4% - 18.9% 81.1% - 4.8% 95.2% 18.0% 82.0% 8.4% 91.6% - 25.0% 20.4% 15.1% 14.1% 11.9% 13.5% - 56.2% 21.8% 11.6% 5.5% 2.7% 2.2% - 4.9% 35.2% 42.8% 17.2% - 16.5% 58.2% 21.3% 4.0% - 38.9% 61.1% -- 14.8% 85.2% - Maintenance Quality (Units experiencing:) Additional Heating Required “ “ Not Required (Not Reported) Heating Breakdowns No Heating Breakdowns (Not Reported) Broken Plaster/Peeling Paint No Broken Plaster/ Peeling Paint (Not Reported) Cracked Walls or Ceilings No Cracked Walls or Ceilings (Not Reported) Holes in Floors No Holes in Floors (Not Reported) Rodent Infestation No Infestation (Not Reported) Toilet Breakdown No Toilet Breakdown (Not Reported) Water Leakage Inside Unit No Water Leakage (Not Reported) Units in Buildings w. No Defects Units in Buildings w. 1 Defect Units in Buildings w. 2 Defects Units in Buildings w. 3 Defects Units in Buildings w. 4 Defects Units in Buildings w. 5+ Defects (Not Reported) Condition of Neighboring Buildings Excellent Good Fair Poor Quality (Not Reported) Units Close to " Boarded-Up " Buildings Units Not “ “ (Not Reported) * Other Regulated Rentals encompass In Rem units, as well as those regulated by HUD, Article 4 and the New York City Loft Board. ** Other Rentals encompass dwellings which have never been regulated, units which have been deregulated (including those in buildings with fewer than 6 apartments) and unregulated rentals in cooperatives or condominiums. Totals may not add to 100% due to rounding. 127 Appendices Appendix G: 1994 RGB Income and Affordability Study G.1 Average Annual Unemployment Rates by Borough, 1988-93 1988 1989 1990 1991 1992 1993 1994** Bronx.......................................5.5% ................7.0% .................8.2%..............10.1% ............12.5%.............11.9% .............9.8% Brooklyn.................................5.5% ................6.7% .................7.9%................9.5% ............12.0%.............11.2% .............9.4% Manhattan..............................4.3% ................5.0% .................5.8%................7.3% ..............9.0%...............8.8% .............7.4% Queens....................................4.0% ................5.0% .................6.0%................8.0% ............10.5%...............9.5% .............7.9% Staten Island ..........................4.0% ................4.8% .................6.4%................8.3% ............10.4%...............9.2% .............8.2% NYC ........................................4.7% ................5.8% .................6.8%................8.6% ............10.8%.............10.2% .............8.5% Growth in Real GCP* .........3.6%...............-0.4%................-0.2% ..............-4.4% ..............4.1% ....................--..................--- * Gross City Product ** As of August, 1994 Source: New York State Department of Labor G.2 Composition of the Rent Regulated Housing Stock in New York City, Housing & Vacancy Survey - 1981, 1987, 1991, and 1993. 1981 1987 1991 1993 Total Units ....................................1,241,565....................1,116,103....................1,134,995 ...................1,114,895 Total Occupied.............................1,214,088....................1,090,734....................1,095,486...................1,080,824 Controlled ..................................285,733.......................155,361.......................124,411......................101,798 Stabilized....................................928,355.......................935,373.......................971,075......................979,026 Pre 1947..................................615,497.......................662,742.......................706,794......................707,878 Post 1947 ................................312,858.......................272,631.......................264,281......................271,148 Total Vacant for rent ........................27,477.........................25,369.........................39,509........................34,071 Stabilized......................................27,477.........................25,369.........................39,509........................34,071 Pre 1947....................................19,693.........................18,202.........................33,420........................27,534 Post 1947....................................7,784...........................7,167...........................6,089..........................6,537 Source: 1981, 1987, 1991 & 1993 Housing & Vacancy Surveys. 128 Appendix G: 1994 Tenant Income and Affordability Study 1988 G.3 Consumer Price Index for All Urban Consumers, New York-Northern New Jersey, 1988-94 1989 1990 1991 1992 1993 1994 1989 1990 1991 1992 1993 1994 March .......................................121.5..................128.9.................136.6.................143.4 ................149.1................154.1 ...............157.9 June...........................................123.1..................130.5.................137.1.................144.6 ................149.5................154.2 ...............157.8 September................................126.0..................132.2.................140.8.................145.8 ................151.4................155.3 ...............159.0 December.................................126.0..................133.3.................141.6.................146.6 ................151.9................155.6 ..................-Quarterly Average..................124.2..................131.2.................139.0.................145.1 ................150.5................154.8 ...............158.2 Yearly Average........................123.7..................130.6.................138.5.................144.8 ................150.0................154.5 ..................-12-month percentage change in the CPI 1988 March........................................4.9% ..................6.1% .................6.0% .................5.0%.................4.0% ................3.4% ................2.5% June ...........................................4.5% ..................6.0% .................5.1% .................5.5%.................3.4% ................3.1% ................2.3% September ................................5.2% ..................4.9% .................6.5% .................3.6%.................3.8% ................2.6% ................2.4% December .................................4.5% ..................5.8% .................6.2% .................3.5%.................3.6% ................2.4%...................-Quarterly Average ..................4.8% ..................5.7% .................5.9% .................4.4%.................3.7% ................2.9%...................-Yearly Average ........................4.8% ..................5.6% .................6.0% .................4.5%.................3.6% ................3.0%...................-Source: U.S. Bureau of Labor Statistics. 1988 G.4 Yearly Average Payroll Employment by Industry for NYC, (Thousands), 1988-94 1989 1990 1991 1992 1993 1994* Construction ........................120.1..................120.8..................114.9....................99.8....................86.2....................84.4....................78.3 Manufacturing.....................370.1..................359.5..................337.5..................307.8..................293.1..................290.0..................277.5 Transportation .....................219.5..................218.1..................229.1..................218.4..................205.3..................202.4..................200.3 Trade .....................................634.3..................630.2..................608.3..................565.3..................547.9..................534.0..................526.3 Finance..................................542.4..................530.6..................519.6..................494.4..................477.2..................470.4..................469.2 Services ..............................1,123.1...............1,147.2...............1,149.0...............1,096.9...............1,091.1 ................1117.1................1121.0 Mining.......................................0.5......................0.3......................0.3......................0.3......................0.4......................0.3......................0.3 Total Private ......................3,010.0...............3,006.7...............2,958.7...............2,782.9...............2,701.2................2698.6................2672.8 Government .........................595.7..................601.5..................607.6..................592.6..................584.....................576.4..................571.1 Total Employment...........3,605.7...............3,608.2...............3,566.3...............3,375.5...............3,285.2................3275.0................3243.9 * Data for first four months of 1994. Note: Totals may not add due to rounding. The Bureau of Labor Statistics revises the statistics periodically. The employment figures reported here may not be the same as those reported in prior years. Source: U.S. Bureau of Labor Statistics. 129 Appendices G.5 Composition of the Housing Stock in New York City, Housing and Vacancy Survey, 1981, 1987, 1991 and 1993. 1981 1987 1991 1993 Total Housing Units ......................................................................2,792,339 ..................2,840,258....................2,980,762 ....................2,985,527 Total Owner Units ............................................................................754,745......................836,511 ......................858,108 ......................827,000 Owner Occupied................................................................................746,112......................817,476 ......................829,135 ......................806,479 Vacant for Sale........................................................................................8,633........................19,035 ........................28,973 ........................20,522 Total Rental Units ..........................................................................1,976,044 ..................1,931,696....................2,028,303 ....................2,047,017 Rental Occupied ............................................................................1,933,887 ..................1,884,210....................1,951,576 ....................1,976,671 Vacant for Rent ....................................................................................42,157........................47,486 ........................76,727 ........................70,345 Total Vacant, Not for Sale or Rent ....................................................61,550........................72,051 ........................94,351 ......................111,510 Dilapidated ..........................................................................................15,504..........................1,830 ..........................8,512 ..........................5,136 Rented - Not Occupied ......................................................................10,823..........................3,794 ..........................6,979 ..........................9,788 Sold - Not Occupied..............................................................................1,427..........................6,070 ..........................4,527 ..........................4,401 Undergoing Renovation..........................................................................NA........................20,517 ........................10,242 ........................11,427 Awaiting Renovation ..............................................................................NA ............................NA ........................11,172 ........................11,167 Converted for Non-Residential Use......................................................NA ............................899............................1308 ..........................1,220 Legal Dispute............................................................................................NA..........................4,955 ..........................4,616 ..........................7,915 Awaiting Conversion ..............................................................................NA..........................6,301 ..........................3,017 ..............................626 Held for Occasional Use ......................................................................6,375..........................9,284 ........................19,696 ........................39,603 Owner Unable to Rent or Sell ................................................................NA ............................NA ..........................3,909 ..........................4,211 Held Pending Sale of Building ..............................................................NA ............................NA ..........................3,641 ..........................2,534 Held for Planned Demolition ................................................................NA ............................NA..............................155 ..................................0 Held for Other Reasons ......................................................................27,421........................18,401 ........................14,970 ........................12,246 Not Reported ............................................................................................NA ............................NA ..........................1,607 ..........................1,235 Total Occupied Units..........................................................................100.0% ......................100.0% ......................100.0% ........................100.0% Renter - Occupied ................................................................................72.2% ........................69.7% ........................70.2% ..........................71.2% Owner - Occupied ..............................................................................27.8% ........................30.3% ........................29.8% ..........................28.8% Source: 1981, 1987, 1991 and 1993 Housing and Vacancy Surveys. Appendix H: Housing Supply H.1 Permits Issued for New Housing in New York City, 1988-93 1988 1989 1990 1991 1992 1993 Bronx.................................967 ..............1,643 ..............1,182 ..............1,093..............1,257.............1293 Brooklyn ........................1,629 ..............1,775 ..............1,634 ..............1,024.................646.............1015 Manhattan.....................2,460 ..............2,986 ..............2,398 .................756.................373.............1150 Queens...........................2,506 ..............2,339 .................704 .................602.................351...............530 Staten Island .................2,335 ..............2,803 .................940 ..............1,224..............1,255.............1185 Total ...............................9,897.............11,546 ..............6,858 ..............4,699..............3,882............5,173 Source: Bureau of the Census, Construction Statistics Division, Building Permit Branch. 130 Appendix H: 1994 Housing Supply H.2 Units in Buildings Receiving Preliminary Certificates for 421-a Tax Abatements, 1989-93 1989 1990 1991 1992 1993 Bronx ................................756 ......................48....................454 ......................233 ................329 Brooklyn........................1,327 ......................36....................821 ......................767 ................406 Manhattan.....................1,224 ....................652.................1,384 ...................1,404 ..................28 Queens...........................1,813 ....................228....................557 ......................241 ................151 Staten Island ....................222 ......................16....................107 ..........................5 ....................0 All ..................................5,342 ....................980.................3,323 ...................2,650 ................914 Source:NYC Department of Housing Preservation and Development, Office of Development. H.3 HPD Vestings of Occupied Multiple Dwellings, FY'86-FY'94 Buildings FY 85 ..............................................704 FY 86 ..............................................972 FY 87 ..............................................165 FY 88 ..............................................214 FY 89 ..............................................407 FY 90 ..............................................399 FY 91 ..............................................321 FY 92 ..............................................287 FY 93 ..............................................486 FY 94 ..............................................119 Total ............................................4,074 Source: NYC Department of Housing Preservation and Development, Office of Property Management. Note: FY '94 figures are as of January 18, 1994. FY’93 and FY’94 figures are preliminary and subject to change. H.4 Number of New York City Residential Co-op and Condominium Plans Accepted for Filing By the Attorney General's Office, 1987-93 1987 Plans (Units) 1988 Plans (Units) 1989 Plans (Units) 1990 Plans (Units) 1991 Plans (Units) 1992 Plans (Units) 1993 Plans (Units) Total Plans (Units) New Construction..........260 (8,460) ............296 (9,899).............211 (6,153) ............107 (4,203) ..............42 (1,111)..................32 (793)...................37(775) ..........985 (31,394) Non-Eviction Plan........505 (35,574) ..........484 (32,283) ..........362 (25,459) ..........134 (14,640)..............27 (1,757) ..................11 (566).....................4(134).......1527 (110,413) Eviction Plan......................11 (1,064) ..............16 (1,006)....................6 (137)....................7 (364) ...................5 (173) ........................0 (0).......................2(41)...............47 (2,785) HPD Sponsored Plan.......51 (1,175) ..............51 (1,159)..................52 (945) ..............50 (1,175)............109 (2,459)...............87 (1,674)...................15(455).............415 (9,042) Total.................................827 (46,273) ..........847 (44,347) ..........631 (32,694) ..........298 (20,382)............183 (5,500).............130 (3,033).................58(1405) .......2974(153,634) Source: New York State Attorney General's Office. Note: Eviction plans sponsored by HPD are in the "HPD Sponsored Plan" category. 131