Inside NYC’s Multifamily Crossroads — A Conversation with NYAA CEO Kenny Burgos

In this episode, Kenny Burgos, CEO of the New York Apartment Association (NYAA), joins Derek, Luke, and Donal at the Real Estate Roundtable with IPRG for an in-depth discussion on the forces reshaping New York City’s multifamily housing market.

We explore the early priorities of the new mayoral administration, the role of enforcement tools like the Office to Protect Tenants and Rental Ripoff Hearings, and why a growing portion of rent-stabilized housing is facing financial distress. Kenny shares insights on NYAA’s mission, the realities of operating regulated housing, and how well-intentioned policies can produce unintended consequences for tenants, owners, and housing supply.

This conversation offers a grounded, policy-focused look at what’s happening beneath the headlines — and what sustainable housing solutions in New York City could actually look like.

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Transcript

Meet Kenny Burgos And NYAA

Derek 0:00

All right, we're here at the real estate roundtable with IPRG, and we have a guest today, Kenny Burgos from the New York Apartment Association. Welcome, Kenny. Thanks for having me. Absolutely happy to have you here. Um I'm joined with Donald Flaherty and Luke Sproviero here at IPRG. This is Derek Bestrich. All right, Kenny, it's been a whirlwind of a start to the new year here, right? With uh the new mayoral administration, the governor had the state of the state address this week. Um obviously we're following the pinnacle bankruptcy case. It's just been a lot to kind of wrap our heads around. And we wanted to bring you in and kind of round the bases here on what's going on in the market.

Kenny 0:39

Yeah, I mean, uh no question, you know, people uh have called me, there's been concerned. There's been a really quick 13, 14 days now with a new mayoral admin in. The governor has given our state of state and really, you know, hasn't addressed much in the rent stabilized industry and everything that we know that's happening. I think there's really been a disconnect on, you know, what we're seeing on the ground and maybe what you know state and city are really uh acknowledging.

Derek 1:00

So I think a good place to start would maybe be just a little bit of background on yourself. Sure. And then we can talk about what uh New York Apartment Association is is all about right now.

Kenny 1:09

Yeah, uh super quick background. Uh born and bred New Yorker, grew up in the Bronx, uh ran for office in 2020 after working in city council for several years, was elected, resigned just a little bit over last year to lead this organization, which is the New York Apartment Association, a merger of two long-standing rent stabilization associations, most will know, RSA and Chip. Uh we merged forces because of what happened in the past two years. This industry has just been completely you know uh on its back foot right now for several years. And so coming together as one industry, one voice, trying to uh change our approach uh and how we engage with the legislature, with the city, with the public, uh, educate folks is really what uh it's been a big part of my goal being this organization. And we now stand, if I'm not mistaken, as the largest uh multifamily trade association, certainly in New York, and if not in the country.

Why The Industry Merged And Mobilized

Derek 1:59

Yeah. Um, why did you decide to get involved with this organization and and apartment multifamily advocacy?

Kenny 2:06

Yeah. So when I was a state assemblyman, um I was approached by Jay Martin back when he led Chip, he's now with us, thankfully, and he educated me on what was happening in the rent stabilized industry. And I think like many New Yorkers, I know the term, I knew the term rent stabilization, I knew what a rent stabilized apartment was, or I thought I did, but that was about the end of my education, right? You sort of knew that it was probably a cheaper apartment, and you can stay there for many years. Most don't know the inner workings of it. And when I learned the law that I passed the year before I was elected and how detrimental it was to this housing stock, it was clear to me we had to do something. And at this time, I mean, I I I'm still a Democrat, I was a Democrat, and I was really frustrated nationally with what I viewed as Democrats not really tackling issues head on and sort of just dancing around the edges, and housing being such a core issue in New York City, and to me, impacts everything from community health to mental health to economic vitality uh to crime, you name it. It it all comes down to house. We all have to live somewhere, right? And if that's not stable, then nothing else will be. So I knew it would be controversial given the politics to try and fix what was happening, and I was right and met with a lot of resistance when I introduced a bill and trying to bring back vacancy reset, which is really the core component that keeps rent stabilization alive. For sure. Um, you know, uh, we weren't successful in the time when I when I pushed for that bill. We landed on uh a change to IAIs, which I would say, and many will say probably just had an incremental improvement in the industry. But um since then they approached me and said, hey, listen, you know, we this fight continues on. Would you like to lead this organization? At the time, I had just had my son, you know, brand new baby. You have to consider that on a personal level if you want to keep traveling back and forth to Albany. And this is a fight I believe in. This is something I feel is very important. So I thought, what better way to use my time, to use my skill set, to use what I know and hopefully what I can do in this capacity.

Derek 3:52

We um we appreciate you doing this. Yeah, it means a lot to all of us. Um it's such such important work, and we feel like our voices just really are not heard. Feel like it's just like people just don't want to listen to our perspective. So we really appreciate you taking this on.

Kenny 4:09

Not sure how often you hear that, but yeah, not not a not a very uh not an often time I get to thank you for the work. Uh thank you. Usually look at my comments as a bit on the other side, but I appreciate that. Yeah, yeah.

Derek 4:18

All right. So in terms of the New York Apartment Association, maybe you touched on this already, but but like what what are we trying to accomplish at this point? Like, what's the goal of New York Apartment Association or landlords in general?

Politics, Perception, And Educating Lawmakers

Kenny 4:30

Yeah, I mean, I'll take it 30,000 feet up, right? You know, what I've told a lot of my members is that the real estate industry has been painted as the boogeyman. I mean, this has been a political playbook before I was even born, but really hasn't painted as a boogeyman and done well, I would say, in the past 10 to 15 years. And part of that problem has been this inability to connect with a lot of new members. You know, again, I came in in 2020 with the largest class of the state legislature since 1972. We've had a huge changeover in many of our lawmakers. Um, you know, I I started in government back in 2015, and that was probably the tail end of when you had a lot of professionals, so to speak, meaning folks who were lawyers full-time or accountants or even uh real estate operators and then were lawmakers sort of part-time. That was really the model. Uh, we've now moved into an era of politics in America and in New York where you have a lot more former staffers, you have activists, you have, you know, uh tenant attorneys. So there's been a real changeover. And the real estate industry has not done a good job in educating and connecting with these elected officials on their impact, on their partnership, on their ability to help with good policy and what they try to do and what they do in communities. And because of that, because they've been either silent or try to hide in the shadows, the narrative has been shaped. And that has had real strong effects, right? I mean, you you can take public polls right now, and the sentiment of lawmakers is usually the sentiment of most New Yorkers, given we're you know we're a largely renter town.

Derek 5:54

Yeah.

Kenny 5:54

Uh most people would just believe landlords are inherently just bad people, greedy, uh, and then they operate with just pure malintent uh malice malice. And that's just not the case, and we know that, you know, and it's not to say there's no bad operators out there, there's bad operators in every industry. But anyway, so my goal here is to re-engage with all the new lawmakers that have come in, educate them on what it means to operate housing and specifically and stabilized housing. Uh, you know, you have people that have this belief that once a building is paid off, that you know, the rent is just pure profit in your pocket, that there's just no payment to rent housing. Like it's it's education gaps like that that create policy that we see today that's so disconnected from the reality that we know. Uh, and that's what I strive to do and I do it, you know, social media is a big part of it. You know, most people receive their news and are just on their phone more than anything today. So I try I make TikTok videos, I'm gonna film four of them today. Uh that's a piece of it, right? But we have an internal lobbying team, external lobbying teams that speak with the city members, their staff, the state members, and their staff. Uh, you know, we speak with the governors. So we're really trying to attack it from all fronts. I have people in my team, we're talking to reporters every single day. You know, we're trying to get news stories written, we're given our quotes, we're giving perspective. We're really just putting ourselves out there because I know in my heart that we can get to a world where this isn't a zero-sum game, right? This doesn't have to be the loss of tenants to somehow benefit the real estate industry. You can act, you can protect tenants, you can have, you know, an abundance of housing, you can have brokers and deal and deal makers working in this industry all doing well, and it doesn't have to come at the cost of everyday New Yorkers. Yeah.

Derek 7:23

I feel like some of the lawmakers aren't really willing to like hear what you have to say, though. I mean, I saw some press conferences over over the last two weeks where they're basically saying that landlords haven't opened up the books. They don't understand how these buildings operate. They think the landlords are making, you know, money hand over fist. Meanwhile, like there's been thousands of offering memorandums circulated throughout the years.

Luke 7:44

And I'm pretty sure this this new law, this new foreclosure definitely opened up the books, right?

Derek 7:49

I I don't even know if they can see it.

Donal 7:51

I just feel like they ignore it just so they push their agenda, uh push their agenda forward.

Derek 7:55

Yeah.

Donal 7:55

Like for your week your vacancy reset bill, like what was the what what was the pushback? What was their excuse for not even like talking about it?

Kenny 8:03

Oh, I mean, you you just start getting misinformation pushed out there, right? So you get like a lot of activists who aren't even elected officials, but you know, garner a lot of attention and and influence. Yeah, and they were saying, you know, this bill is going to raise rent on grandma. You're trying to evict people, like just little things like that, and people just get this knee-jerk reaction and say, Well, eviction, yeah, uh increased rent. I don't even want to get near this bill, right? They after that, they've closed their ears and they don't even want to engage anymore. When it's just the first thing from the truth, they don't even look at the numbers, they just like push their agenda.

Luke 8:33

They're hitting on the debt a lot. They're they're hitting on the fact that these people refinance, they take on large debt, they take money out, and they could buy more buildings. They could easily make a lot of money if they weren't servicing the debt. Who took the debt? Not us. So I think it's a lot of that. It's it's kind of true, right? There is some debt. That's the one thing that you gotta give. But that either way, I mean but even on a debt.

Kenny 8:53

I mean, you know, listen, I don't operate housing. I didn't I I I learned a lot about this even in this role, but you I knew for a fact that you have to finance these buildings if you want to constantly improve them, right? You have to pre-1974 buildings are very, very old. You can't just assume the building, I mean they built well back then, but they're not built so well that you can just never reinvest a dollar.

Derek 9:09

Yeah. Um so it feels it feels like all good. Um it feels like we've had like the losses just racking up against landlords. And it just seems like it's one thing after another. I've seen the whole uh DSA playbook for how to um decommoditize housing, and it seems like they're really close to just completely executing the playbook. We can go through that a little more later. Um but like in term in terms of successes, have we had any successes since 2019? And like if so, like what are the successes that we can kind of hang our hat on so far?

Debt, Costs, And Misconceptions

Kenny 9:40

Yeah, and politics uh success is maybe not like success other folks wouldn't uh recognize it, right? It's not like if you cut a deal and say, hey, listen, this is a great deal. We we we bought the building, everyone may not, well, that's not what success can sometimes look like in politics. Sure, you know, a passage of a law that you're trying to push for, it's a huge success. But there's so many more incremental successes you can have along the way, and I feel we've made many of them. I mean, again, just the acknowledgement. It may not sound like much, yeah, but I mean, when I was introducing this bill a few years ago, I mean, people thought I was trying to scream the sky is falling and thought this is just a load of BS, right? There's now been an acknowledgement amongst the political class, like there is a problem here, right? Whether they want to acknowledge it publicly, that's one thing, but privately uh people have told me, okay, this is an issue. I'm seeing what you're talking about happen in my community, right? So that's huge right there. Uh, you're having this changeover where now people are engaging with us. Like I said before, the real estate industry was a boogeyman. You know, there were lawmakers who would not take your call. There were lawmakers that wouldn't give you a meeting. I'm proud to say today, I mean, I don't think there's a single lawmaker that I would have difficulty getting a meeting with. Now, changing their mind is a whole different conversation, but they're willing to engage with us. These are smaller steps and we'd like to move faster, but we all know the slow wheels of government and that does stretch beyond into the politics of it as well. And there's been other small successes, ones that I probably, you know, would bore your listeners, but these have just been small successes within bills. When we lobby, it's hard for you to see, I guess, sort of what we've been able to accomplish because when bills come out, you know, that's the final product. And it's not uh, it's not polite, I guess, to come out and say, yeah, well, the bill came out that way because we were influential in in in this language on this line item, right? But I'll just basically say it could have been a lot worse in the past year. No, we get we get that 100%. We get that.

Donal 11:19

And I think a lot of other people are on Twitter on X, like a lot of people, there's a lot of eyes to this now. Like you see people tweeting in like Elon or Ackman, like they're they're they're because of our new mayor and all the people and the CO Weaver stuff, that's getting a lot of national attention now. So I hope that helps like our cause a little bit and gets it out there.

Kenny 11:38

100%. I mean, you know, Mayor Mamdani has been both a gift and a curse, right? Because the gift in my eyes is that he has made this his number one campaign promise being the rent freeze, and has put so much attention on the rent stabilized housing stock. And we all know the numbers, we all know the reality, and that's why I'm so confident. Like I said, I'll talk to anyone. Yeah, I would talk to any media outlet, right wing, left wing, center, whatever you want, because I'm so confident in the data and what's happening here and what we've seen happen the past few years. So the benefit has been because he was elected, because him and I were elected together in 2020, we're both young guys, we're both sort of on the uh opposite sides of the coin on this issue. It's made for a good media narrative in many cases. And I have no issue talking about that because I know you know this industry's in trouble. Yeah.

Derek 12:22

Um, speaking of Mandani, he he's all about the affordability agenda, which I think everyone stands behind. Cost of living is so high. But I I just want to know why that's so heavily directed towards these rent-stabilized tenants in apartments where their rents already are affordable. Like in the pinnacle portfolio, I think the average rent is a thousand or less per month. So I I just am confused why that is such a major part of the affordability agenda.

Kenny 12:49

Yeah. Uh two things on this, right? So what I'll say first is if you take a look at the Mamdani primary election heat map and see where a lot of his support came from, and you overlay that with a lot of the new development that's happened in New York City, it's it's very interesting to see how they almost like are a perfect match. And what that tells me is that a lot of activists today and a lot of the uh I guess we'll say the median Mam Dani voters view housing, landlords, and even rent stabilization through the lens of new development. And we all know new developments, 420A, 45X, those are also rent-stabilized apartments. Now, obviously, a completely different world from pre-74, which I typically advocate for, but their perception of what's happening in the housing industry is still very localized, right? If you're living in Greenpoint, Brooklyn, and you only know rents that are $4,500 and including the new rent stabilized apartment or even the free market units that are in a mixed-regulated building, it's just a very, very complicated landscape. And to the lay person, like they don't know as much as we know because this is not their work. And so their viewpoint of landlords and rent stabilization is the rent's too damn high, and the landlords are just being greedy. They're not familiar or just choose to not be aware of the average $1,200 rent happening in the outer boroughs, right? You look at Pinnacle and their properties, or you look at some other properties that are that are failing in the West Bronx and Upper Manhattan. That's not where Mamdani performed extremely well. He certainly got his votes there, but his highest performance was in those pockets of Brooklyn, in those pockets of Quaint. So there's a disconnect right there in these conversations, and that's where I say the education has to happen. It's a major disconnect though. Major. I mean, it's huge.

Luke 14:24

Are they unaware of the 50 to 60,000 apartments that are like vacant and falling apart that no one's living in?

Kenny 14:29

Well, like I said, right? This has been so previously that it didn't it didn't exist. We were accused of showing apartments that were in Jersey. Now the acknowledgement, like, okay, no, there are vacancies, then they'll say, well, there's not that many, which is it, right? So it's they don't exist, but then we should then some of them propose we should put a vacancy tax on them to force them online. Yeah. But then it's not that much. Like they just continue to change the argument.

Luke 14:49

It's crazy. It's crazy to think that that you don't need to put money into these buildings. I mean, they fall apart all the time. These are very, very old buildings. The apartments are in horrible shape. Well, I just understand where they think the money is going to come from.

Derek 15:00

I think the new administration would agree with you that they need to put money into these buildings. And it seems to me that that's that seems to be the direction that they're really going with this office to protect tenants. And I think I think they're very focused on building condition and HPD violations. So that's uh I mean that's definitely something that's pretty concerning to me when I think these buildings are operating bare barely getting by, and now all of a sudden they're basically I mean, in these lawsuits or these objections to the lawsuits as Attorney General in this.

Small Wins And Shifting Media Narratives

Luke 15:30

Has the administration like tried to like point light, and and this might be a bad idea, you don't want to obviously like anger them, but to point light on what they're doing, like like NYCHA, for example, right? Like if you guys are so good and it's so easy to run buildings, like why are the NYCHA buildings falling apart and people are freezing because the boilers break? Or why are these people that you say are going to be your partner and buying these buildings, these non-for-profits, why are their current buildings littered with violations and falling apart? Like no one really point like the obvious stuff.

Donal 15:57

And they know exactly how much these buildings cost to run because they have those.

Luke 16:00

Yeah, and they and they're like, I think NYCHA's like one of the worst landlords like doing that.

Kenny 16:04

Oh, it's undoubtedly the world.

Luke 16:05

So how is no one, how is this not like you just don't no one wants to pick a fight or I mean people do point this out.

Kenny 16:12

I've pointed this out in commentary and others have for sure. I I I think in the case of NYCHA, it's just been such a prolonged issue of disrepair and disinvestment. People have sort of just you know, uh know it's a that that's that's just the reality, right? And it's almost not it's not news, excuse me, in some ways. Now, the point still stands, right? Like New York City still manages 174,000 apartments in NYCHA. Granted, it's federally funded, but it is the responsibility of New York City, and by extension, mayors are the landlords of these properties. Um, but you know, there's there's always going to be the either excuses or differentiations made that the federal government didn't invest in this, and that's why it's been years of disrepair. But again, we know the reality is these are math problems. Housing has to function through math. And if we want affordability, if we want rents to be lowered, Mahum Dani has acknowledged this in building, right? He's acknowledged the cost of building housing, one of the biggest costs is waiting, right? And he's doing the right thing and trying to remove some of those barriers to build housing and reduce the cost to build because you know the wood and cement doesn't care who you're building it for, the cost of the cost. Uh, but that same mindset hasn't been brought over to the operation of housing, and that's what we're trying to bring it to.

Luke 17:22

Yeah, it's just that they act like it's not it's a for-profit, it has to be for-profit who aren't doing it for for no reason. I mean, even their partners in the whoever it is in the Bronx or wherever they're doing this, these people that they're bringing in, these are all for-profit people. They wouldn't be investing in building these properties if it wasn't making them money. And they have violations of their buildings too, all these affordable housing associations that are doing this.

Kenny 17:42

Yeah, but 100%, but like, but like I was saying earlier, right? Like even people who live in those buildings are typically unaware of the structure. They're typically unaware of who their owner is. Is it a nonprofit as HPD giving a low-cost loan to this building, right? They're just not aware of these uh really small details. So to them, everyone's a landlord, so they're not seeing differentiations.

Derek 18:01

Yeah. Got it. Um So, what was the point of Mamdani going straight to 85 Clarkson the day that he gave his inauguration speech and announcing the office to protect tenants? Well, what was the point of that whole like going into the building, showing the level of disrepair, the bankruptcy proceeding that they decided they'd all of a sudden get involved in? What's going on there?

Rent Freeze Politics And Storytelling

Kenny 18:20

Well, I mean, it ties right into his campaign from day one, right? His campaign again has been centered around a rent freeze that has been targeted towards renters. And and listen, again, when you poll this stuff, it polls extremely high. If you ask people, excuse me, what do you think about a rent freeze? What do you think about, you know, President Trump is pushing for credit card cap fees, right? I think this is sort of that horseshoe theory where economic populism meets on both sides, right? We both we know both those policies aren't really going to work out very well, but it polls really well. And for politicians, if it polls well, that means vote. That means I get support, that means I don't get blowback. Um, but to me, the reason why he would do it day one of the inauguration is because he needs a story arc going into the June RGB, right? The data is not going to prove that a rent freeze is warranted, right? They'll try and they'll try and frame it as many ways as they want, but objectively, this data is going to show that these buildings are struggling, that the distress is high, that the NOI is decreasing, right? But so and so because that's going to happen, he needs to build a public story arc that shows since day one, I've been highlighting slum lower. Since day one, I've been highlighting the distress, or I've been highlighting, you know, the conditions renters have been in. And that's why I say it's a rent freeze. That's why he's come out with the rental ripoff hearings, right? None of these are policy-based. None of these are based in fact or bringing together, you know, the office of mayor uh uh the the mayor's office of budget, the finance department, and saying, you know, uh let's really let's really have this conversation in six months while we have a rent freeze. No, he's putting stories out there. He's he's making videos, he's he's getting media hits. That's the game. For sure. So what what's the whole rental ripoff hearings all about? What what are they trying to accomplish with that? So details aren't exactly out yet, but what do you think? Yeah, but what they've put out is you know, uh get your stories ready. We want to hear from you. Again, to me, this this sounds very much like The RGB hearings that go burrow to borough and allow tenants an opportunity to talk about why they think rent either should or shouldn't go up. I think it'll be the same thing. I think it'll be even, you know, more theatrical. Yeah. I think that's I mean, the guy is good, right? He he's very good on on uh not just social media, but just overall just communication. Yeah, it's very good. They're all very good. Yeah. So when you tie that, when you tie that skill set and now take in millions of disgruntled tenants who are unfortunately the subject of bad housing policy, they're going to put that on full display. And it will be internalized as wow, landlords are really bad in New York City, uh, instead of saying, hey, wow, housing policy is so bad in New York City that these are the realities. Yeah, he wants a viral click.

Luke 20:42

That's all he shoots for. If you took a 70-unit building in Brooklyn that had XM, like let's say 20 vacancy soldiers or 10 vacancy soldiers holding them vacant and said, Okay, you get a vacancy reset, but we'll grant you a vacancy reset, but you got to fix all the other units and the violations of the building, clean up the building, and you can get your your market rents on those units. Everyone would win. The the people with the low rents that had the leaky faucets, they would win. How do we counter this narrative?

Derek 21:07

When they when the real deal wrote an article about this, they called it a show trial. They also compared it to events that happened in like communist countries where basically to get their narrative across, but like it's not the full story, right? It's all theatrics, it's all one-sided. You're gonna get the worst stories possible, but like what what about the stories of tenants not not being good tenants, staying and not paying rent for years, to get damaging buildings. That's their cancer thing. The question is how do we get like a different perspective out there to like counter this rental ripoff hearing, which is obviously gonna be a big thing and it's happening soon.

Kenny 21:40

Well, I think mediums like this, right? You know, podcasts, again, like I said, social media going on news channels. I would say the New York press, that's again one of those wins, right? You look at press stories from three years ago. I mean, uh the press is still a New York City voter, right? A lot of the press today is still. New York Post is like throwing some stuff out, but beyond the post, I mean, we have been successful. And if you look again, look at stories from three years ago, there's a different coverage on these issues than today because the press cannot ignore what we brought to their faces. Good. So to push back on narratives, it's like that. It's like going to where the sources are, or the press, putting out your own mediums and putting out your own data. Like you just you have to try and and put that information out for public opinion. I mean, that's that's the game. Now, obviously, being a mayor and having the you know the tools of City Hall, you have a lot more influence and a lot more reach. Um but doesn't mean the fight shouldn't be.

Derek 22:30

And he's he's so good at at the the social media and just get getting attention. Probably one of the best communicators ever generated. I mean, him and Trump are so similar in that way, just very good at getting attention, a hundred percent. He's phenomenal.

Donal 22:42

But what what do you think good landlords can do? Like the landlords that are following all the rules, they don't have any violations on the buildings, they have big portfolios, they do everything right. What can they do to change this image of just slum lords across the board?

Kenny 22:55

Starts from the bottom. Um, so I always encourage a lot of my owners, you know, a lot of owners are are hesitant to be on the news, be public, what even if they have a zero-violation building, right? Because unfortunately, that usually leads to uh some sort of attack or some sort of targeting from tenant advocate groups or whoever, you know, uh may have a bone to pick with them. But what I tell some of my owners is that if you have relationships or we can help relationships on the most local level with lawmakers, show them, right? This doesn't have to be a news crew there. You don't need cameras out. Just say, hey, Senator X, Y, and Z or Assemblyman or a city council member. I'd love to take a tour take a tour of my building so you can see my operation. I've had done this, I've had this building for 40 years, and my family's had it, and we've housed people, it's affordable rents, high-quality buildings, right? Because, you know, what I've told lawmakers, I said it's just it cannot be the case that someone who owns a building in uh Williamsburg, Brooklyn, that has, you know, no violations, uh, the tenants are pretty happy there, it's a nice building operating well. And then that person also operates a building in the West Bronx where the expenses have gone through the roof and are just not covered and the rents aren't covering those expenses. It cannot be the case that that owner is a slumlord in the Bronx and a good operator in Brooklyn. That's a good point. That is that is the cause of housing policy, right? He he doesn't choose to say, I'm gonna just run my building to the ground in the Bronx because somehow that makes me a profit and run the Brooklyn building better. That's just not the case. It's absolutely true.

Derek 24:21

100%. Um, I'd like to talk about this office to protect tenants because it seemed like that was part of the de Blasio administration. And under Eric Adams, it seems like it wasn't as much of a thing, but that was the first announcement that Mamdanny made as soon as he became mayor. He announced Cia Weaver office to protect tenants. And um it seems like she's been pretty anti-landlord over the years. Um, so we just wanted to understand kind of what we have in store with that. Yeah.

Vacancies, Conditions, And Enforcement

Kenny 24:49

Yeah. I mean, anyone that's been in New York State government and has even engaged in housing in the smallest of it has known Sia Weaver. She's been a fixture of this. She's led the tenant movement for a number of years, as long as I've been in politics. And it is without a doubt, there's no question that she is the architect of the 2019 rent laws. 100%. I mean, it's she is the absolute architect. And there's now lots of footage coming to resurface to show like not just how much she had her hand in this, but also what was the real gameplay here. And there's been other videos showing Mayor Mamdani who says, you know, uh, I take most of my housing information from Sia Weaver. So we saw that. I there's real concern here. I mean, Sia Weaver has made her plans very clear. She is trying to decommodify this housing. She has been successful so far in devaluing this housing. And my hope is first and foremost that many of the lawmakers I think that voted for the 2019 rent laws, some are not there anymore, some still are, didn't vote with the intention of decommodifying this housing. They voted with the intention of protecting tenants. That's what this bill was praised as. It was praised as the most sweeping tenant protection in the nation, even though most of it had to do with actual financing of the building, but that's another conversation, right? And so having her in the office to protect tenants along with May Mom Donnie, and they have been consistent in their goals to seemingly defund these buildings, bankrupt them, intervene in bankruptcy cases, is worrying. I mean, I won't sugarcoat this, right? She is a skilled operator, she commands thousands of tenants, you know, who uh parrot every single talking point that she has, and using that with the power of City Hall, with the power of a mayor who is fully committed to her, because in light of all these, you know, new videos and clips and comments she's made, he stood by her, right? Yeah. Whereas his appointment secretary, you know, she had one comment come out and within 24 hours she was forced to resign from office, but see a weaver, he will not back down from her. Um, so time is going to tell, you know, what this what this true partnership means.

Derek 26:49

Um I I have here the outline of the the DSA's playbook to decommodify the housing. And I mean, there's a lot of there's a lot of pretty concerning stuff in here. I mean, tenant unions organizing to to do rent strikes. Um says implement strict and expand strict rent control, which we already have through HSTPA. They got good cause eviction through as well. So we basically have rent control everywhere. Yep. Um says enforce housing code violations aggressively, use tenant unions to report and amplify violations, creating a cycle of fines and penalties. Um rents make compliance impossible, leading to deferred maintenance and building deterioration, mandate costly repairs and escalate burdens, so require extensive fixes for violations with no rent increases to recoup cost. This compounds the strain for low revenue and fines. Tenants demand repairs while withholding rent, pushing buildings towards insolvency. Dri next is uh drive buildings to bankruptcy. Check, did that, combine low rents, fines, repairs, demands, inability to refinance or sell. Sell at value leads to defaults, foreclosure and bankruptcy, turn private assets into opportunities for public intervention. Landlords will abandon or sell distressed properties, force, force cheap sales and block private buyers. So distressed owners sell at discounts due to devalued assets and legal issues, and then insert the city and state buyers and transition to collective ownership. So city authorities seize or buy properties in distress, converting them to social housing, and obviously we've already seen these um these COPA, which who knows if they'll come to pass or not.

Luke 28:27

The thing here is the tenants that are on her side, the biggest losers here are obviously the landlords and the tenants, because the tenants aren't getting anything better. They're basically all C Weaver is doing is devaluing the real estate so they can come in and try to buy it. The tenants are just gonna end up with one crappy landlord, then they're gonna get the worst landlord, the city, the government. And there's no win-win for there, it's a lose-lose-lose. I don't even care about it. But they don't pay rent for affordability. No, no, but the tenants are the ones that are backing them.

Derek 28:51

The reason why the mayors are pawns in a bigger type of pawns. Yeah, and and what really concerns me is everything I've seen at her press conferences, every single thing she talks about is building condition violations. I think I saw something at at when she was announced saying that buildings need to go through a comprehensive building-wide condition report. I mean, 85 carts, I forget how many units that is, but I'm sure it's a huge disparity. It's a big building. It's not huge. I'm sure it's a major disrepair. Yep. The if you had a building-wide condition report done for that building, the cost would be in the millions in terms of what what the building needs for repair. So you know, if if she's gonna enforce housing code violations aggressively, and you know, even these objections to this pinnacle bankruptcy with the office of the attorney general now getting involved and the city getting involved, they keep talking about improved tenants' living conditions, um being able to maintain the building. So I there's some scenarios that play out in my head where I'm very concerned at the direction this is going.

Kenny 29:57

Yeah, I mean, you know, the point that you that you said earlier was these tenants are are pawn and they maybe don't even realize what's happening, right? We've seen this in the case in 1520 September Avenue. This is a building run by a nonprofit for the past 10 years. May I Mam Donnie made his announcement there and cited that building as sort of the model of nonprofit run housing. It wasn't until the news went there and they interviewed some of these tenants, and it's on camera. The tenants were literally saying, I've had a stove for six years, I have roaches and rats. The old own the the previous owner was better, right? I mean, this is this is a clear example of like private run housing runs better than nonprofit housing in most cases, has lower violation counts. Um, but that story is not out there as much as it should be. Tenants don't understand that as nearly as much as they should, because it, you know, I can tell you this as a former lawmaker, like the saying always goes, people vote with their pockets, right? People care simply about their household, what it means for them. If it's gonna cost them a dollar, their ears are pretty much turned off.

NYCHA, Nonprofits, And Comparisons

Donal 30:54

Do you think that's a good counter? Like interviewing, like putting media out there from our side, from landlords, real estate professionals of these tenants in nonprofit buildings that are saying that? Because I've never seen that. I haven't seen that clip. And I feel like that's powerful.

Kenny 31:08

I didn't see it, but this is also a problem. Algorithms, right? I mean, yeah, we do this stuff. I certainly follow a lot of creators that are now doing this, and the numbers seem to be growing. And and what I'm thankful for, I'm seeing a lot more present these issues in an objective sort of you know, fact pattern as opposed to trying, you know, uh rival up or or get get people all riled up on the left or on the right, but we know that's what the algorithm rewards, right? So we all also are living in our own algorithm bubbles, right? Yeah, I can't assume the social media uh posts that I put out are really landing in DSA pages until I know when it lands there because when I start getting a litany of attacks, I said, okay, they've shared my post in their group chats and now they're coming, but it's not landing there organically. Yeah. So yes, so we have to continue to push this stuff out there, but the nature of the algorithm is only gonna you know let it land on so many eyes.

Derek 31:56

Why why do they want the city to take over housing? Why do they want all this community housing?

Kenny 32:01

Their model and and their vision is, and they they've always said this, is Vienna, Austria. Socialists have been absolutely infatuated with the Vienna-Austria model because you know, socialists ran Austria during the period Red Vienna and had this social housing, and rent is relatively affordable compared to the average uh Viennese, I think, right? Uh Viennese resident income. Uh, but there's so many, there's there's so much there to unpack, and we can't do it all today. Uh, but it's comparing apples to oranges, so much so that I actually went to Vienna two months ago. This is all I've never even heard of this. We have we haven't put too much of this out yet, but we went to Vienna to basically pre-empt this argument that they're going to make here. What I'll simply say is this Vienna somewhat works, and there's still lots of flaws there, but because in in America and New York specifically, housing funds the government, right? Housing funds the government through property taxes, through uh mortgage according tax, a host of fines and and a host of fees that are associated with funding housing. Vienna, the government funds housing. It's completely different, it's completely flipped on its head, right? They impose this 1% tax on income to then provide some of the social housing. Many tenants pay into this at large sums, sort of like a down payment. Like again, we can go on and on. Yeah, but it's come two completely different models. But in their eyes, they ignore all that part. And they say, well, here in New York, as long as if we can just acquire the housing, then we can quote unquote socialize it, which is a cute way of avoiding the word public housing because they know that's not really a good image here in America. Um, but that is their model. That is what they're trying to achieve, and they've been trying to achieve this for many, many years. Mayor Mondani is quoted on this, see a Weaver's quoted on this many, many times, and many other socialists will still to this day say we need to try and achieve the Vienna social housing model.

Derek 33:44

Wow. That's all.

Luke 33:46

Even though it has nothing to do with New York, it's not New York.

Kenny 33:49

I mean, again, you know, do you you talk about the history of Vienna? I mean, you're going back to feudalism. It's just you can't even compare. Yeah. It's just we're in a complete different world.

Luke 33:59

Um a lot of what hold on. They're not and and all the stuff that we just read, the fact that Derek just read all this, that they're purposely devaluing people's assets and turning tenants to do things that aren't right, like calling in fake violations or violations and not paying rent and going on strikes. None of this is illegal, like to force values down and use your a power to do that, devalue assets is like me going, it's like insider trading almost like devaluing making up lies about a company, trying to get people to sell it and then buy it for cheap. Like it's insane.

Kenny 34:32

I think many people would agree with you, but we all know that's for a court to decide, right?

Luke 34:35

So where's the courts? Like, what are we doing about that?

Kenny 34:38

Well, the courts, the courts, there are cases moving through right now. Uh IFJ has launched a major uh lawsuit challenging the constitutionality of New York's rent control system. Yeah. I mean, you know, but we know these things take years, right? We can't just sit on our hands and say, uh, well, I'll wait for the courts to decide here. And just, you know, go into this playbook that we read, right? I think it's important for people to understand the DSA has been a fixture in New York politics for quite some time now. But they were up until just a few years ago, I mean, they were very much just allowed people on the edges. Again, when I came in in 2020, that was the largest class of socialists coming into office, right? It wasn't just Zoran, it was Zaron and I think about six other socialist lawmakers that came in at that time. And it's been obviously a meteoric rise from just six years ago that now their number one socialist is the mayor of New York City. Now they boast, you know, uh close to 10 socialists in office in the state legislature. They have several in city council, they have many that are more aligned with their policies right now, right? So playbooks like these were sort of disregarded because they just didn't have a whole lot of power. Now they do. Yeah. So now let's, you know, the hope is people also in power now pay attention. Like this playbook is being carried out in front of our eyes. Yeah. This is no longer, this is no longer a wish list. This is, I mean, this is uh we're reading this in real time.

Derek 35:57

And you can when I went, there's like seven or eight points on this playlist, but you can basically check off every single one of these. They're they are doing it or trying to do it, and you can see it.

Office To Protect Tenants And Sia Weaver

Luke 36:05

I mean, the scariest part was getting someone to look at a billions and say, oh, this all this is millions of dollars worth of work. And they're gonna say, okay, we'll do the work. You have to do the work, and then what the rents are gonna say the same?

Derek 36:14

Um Yeah, I mean, as I as I mentioned, I mean, both the city and the attorney general now put in objections to this pinnacle summit transaction. One was shut down.

Luke 36:22

Wasn't the bill shut down?

Kenny 36:23

Well, yeah. Yeah, the judge ruled against their their motion to delay the bankruptcy. Yes. Uh, and I'm not quite so sure. I'm not sure, you know, what the attorney general gets involved here is gonna actually do. I I fully anticipate the sale to still go through. Um but sometimes, you know, you make headlines.

Luke 36:38

Yeah, we've taxed out.

Derek 36:40

Attorney General wrote in their filing, whatever it's called, that the city should be given an opportunity to come up with a partner who will be a better steward of these properties.

Kenny 36:48

They have the opportunity. But also, and some I mean, it's important to know for your your listeners that they haven't heard this, right? Like one of the most glaring pieces for me was a few days into Mayor's administration, his corporation counsel put in the court document and says these buildings are unsustainable because they have, quote, very low averaging rents, and we don't believe pretty much any buyer will be able to have a profitable business or a sustainable business at that. And that's why we're objecting to that. That was insane to me. I mean, so you're literally admitting and saying the quiet part out loud because of rent stabilization, because of the high expenses and low rents, these buildings cannot function.

Luke 37:22

So that's where that's crazy. When that came out, I I couldn't believe that whoever's suing for on our benefit, like that's not used and a judgment to them, like, what is going on here? Like, how can I I understand New York City, right? But how can someone outside New York City not see what's going on here and put an end to this? The fact that it's just insane to me.

Kenny 37:40

Well, like I said, I think someone as someone who's been, you know, in this world and put in specific in the politics of it for several years now, it's reached national proportions, right? That wasn't the case before, right? You never had the Wall Street Journal writing a national piece on this or an opinion piece. You never had you know national news uh networks covering this issue of such a localized rent control system here in New York. So, you know, I hear what you're saying, but we're also still just two weeks into this administration. Um, I I have no doubt that from that court document to a host of other evidence that has come along is now going to be used either again in future lawsuits, is being looked at by national figures. I mean, everyone's eyes are on the same.

Luke 38:19

Has there been thought to like, obviously, like Donald Trump is the president, obviously he has a real estate background? Has there been thoughts and trying to involve people that are close to him? Like Richard Lafrac, who like owns like all this housing in Queens and all this RS stuff in Park Slope and Brooklyn? Like, he's a good friend of his. Like, how is this not how is he not involved, like pushing this?

Derek 38:38

Like I said, someone that can actually Trump used to own these buildings down in South Carolina.

Luke 38:41

I don't understand how this is with Trump in office, how this is happening. How's Richard Lafrac?

Derek 38:46

I mean, we I don't know if that that I know the answer, but I think it's more like city-state laws than federal.

Luke 38:53

I I know, but can't he like have a judge that looked at this that's competent?

Kenny 38:56

Well, the federal government always uh you know always supersedes any law, state or city, right? I mean, federal government, yeah. The federal government supersedes our govern our government and that stands for regulations, that stands for local policy. So there's a host of options when it comes to this stuff. Like I said, we're two weeks into this admin. Obviously, this issue didn't start two weeks ago. Yeah. Um, but there's there's a whole there's a whole bunch of layers into this. There's politics, you've got midterm elections coming up, all this stuff is calculated. Unfortunately, good policy isn't just uh decided in a vacuum on whether or not it's good policy, you have to take into account all the other external factors.

Derek 39:30

Yeah, I mean just it's crazy to me. So so obviously the pinnacle bankruptcy made a lot of news, but I saw Jay Martin post it on on X this week saying I think he basically said a third of the rent stabilized housing stock is functionally bankrupt. Yep.

Kenny 39:42

I mean, and that's and that's not him coming to that conclusion. This is think tanks like NYU Furman, right? This is also us deducing this based on the city's corp council saying this building can function. So by definition, there's 300,000 other rent stabilized apartments that are either in the same, if not worse, shape than Pinnacle's portfolio, right? So so that. There's documentation of these buildings not functioning, right? To your earlier point, people saying, Oh, open your books. These books are open. Yeah. Right? We know these owners file TC201s. We know the RGB pulls out this data. This data is available. Why are these buildings all bankrupt?

Derek 40:13

Is it is it collections? Is it is it debt? Is it expenses? Uh everything. Yeah. All the above.

Kenny 40:19

Um, I mean, obviously the core piece of it is the 2019 rent laws, which just ripped apart the devaluation and and the model in which these buildings function. But even post uh COVID, right? Because this is sort of this perfect storm, right? No one knew COVID happened. So this law comes in 2019, then comes COVID, and I think we all agreed completely reshape people's psyche. Uh, but beyond that, even just how housing operates, and what I mean by that, right? I'll give you a quick story. Like when I was a lawmaker in 2020, we have trying to figure out what we're gonna do. People aren't working, we gotta pay rent. We passed ERAP, right? ERAP was $3.5 billion. What is ERAP? ERAP, the emergency rental assistance program that was helping to pay for rent for tons of people. We were paying $20,000, $40,000 at a time. And I still stand by it as a good policy. We can talk about, you know, it's inflationary impact and all that, but it was good policy. $3.5 billion. We only got that money because Chuck Schumer was majority leader, federal government was printing money for us. So we put that out. I'm a lawmaker, I'm handling these cases in the district office almost every day with my team. What I was starting to see just a year later was those same people were coming back and basically saying, I can't pay rent, let's do the evap program. We failed as a government in educating folks and saying this was a one-time program. And so you've changed people's psychology and basically not needing to pay rent because the government was there, right? There's certainly been a huge need, and people that needed it got it, but you had people that just knew there was a backstop from the government that lowered collections across the board for nonprofits and private landlords. Then you layer in the backlog of housing court where it's about two years right now to handle an arrears case. I mean, people have said this, and it's partly true. You're almost a fool today if you pay rent in New York City. Yeah. Right? You I mean, most people know you can probably go two years without paying rent without ever seeing any repercussions. So you layer that in, you layer that with the 2019 rent laws, you layer in the hyperinflationary environment post-COVID. I mean, it was a perfect storm. Uh to and now you have the new mayor threatening four years of rent freezes where the RGB is basically the only avenue to account for increased expenses. We have a real recipe for disaster right now.

Derek 42:19

I never felt like the rent increases really made or broke like we're were like make or break. I mean, maybe during Bloomberg, when it was like 8% or 12%, you know, on renewals.

The Decommodification Playbook

Kenny 42:27

They weren't. I mean, uh, you know, RGB adjustments were almost secondary in most operators' um uh strategy pre-2019. But when you when they changed, not just vacancy, when MCIs were changed, when IAIs were changed, it became one of the few avenues to account for these expenses. So now it became critically important because where else can you, you know, cover those cover those increases? But you're right, RGB really wasn't the major, major concern because you had different avenues to balance this out. And this is also why, right, Zoran will always talk about and say, well, the Blasio froze rent before, so like we have precedents for here for this. Yeah. The difference is under the Blasio era, those freezes were during a time where the RGB wasn't the only avenue to adjust for expenses. You still had different options.

Derek 43:15

Um does Zoron or any of these council people or or government people they have any thoughts or opinions on the amount of vacancy apartments and and any ideas and what to do there. I mean, you guys have had countless videos on condition and the cost to get them back online.

Kenny 43:32

Like I said, privately, many more are now acknowledging, many more are trying to understand how we can fix this. I will tell you, it's and then I think you would agree. If you don't work in this industry or if you don't operate housing, the idea of vacancy reset saving this industry just doesn't click immediately, right? It doesn't, it doesn't make immediate sense to the average person, myself included. I didn't really comprehend why this was so critically important. And so that's what makes it difficult to to sort of push as a policy when you tell folks you have all these empty apartments, this housing is falling apart, uh, we need vacancy reset. And it's just it it does, it's not a it's not a one-two connection. The next piece that honestly is is makes it difficult is that people are still buying these buildings, right? We know these buildings are devalued, we know they're in trouble, but there are still buyers out there. And we know there are buyers because people at this point are probably buying land that just so happens to have a building on it. I mean, the dirt is unfortunately probably worth more at this point. Um, but because of that, it makes the argument harder to the political class because they're just seeing, well, they're not physically seeing buildings being condemned, right? They're not actually seeing the physical manifestation of these of these policies showing up as boarded up buildings, as buildings being abandoned, as complete disrepair. Uh, and I fear and I hope we don't have to get to that point, but uh without that, they don't grasp the severity. You know, you mentioned before we got on the pod about these offering memorandums that are going around and what we're seeing price per unit. But we know that's those aren't very public, right? You don't go on Zillow and see a building selling for $2 million that was worth 10 million five years ago. And that's again another component of why this is not in their face. I anytime I see you know any brokerage firm putting out a memorandum, I put it out there. I'll put it on my story or I'll put it on X so that people can see like these numbers are real.

Luke 45:19

I mean, the banks are done, like even on the Sentinel deal, not Sentinel, what was called uh Michael Pinnacle, the bank took a huge loss. That's insane. These people, like they they they're pretty decent at underwriting, like they're not gonna like they leave themselves a lot of wiggle room.

Kenny 45:32

But even for them to eat, but even the banks, right? I've had these discussions, and I'm like, you guys know for a fact your books are underwater. You know for a fact that this but they won't say anything, right? And I and they're regulated by the SEC and they don't want to scare off investors. So it it sometimes feels as if like I'm this one crazy guy screaming into the void, like this is you know, the sky is falling, but you have all these other parties. Again, owners are you know, they don't want to go out in public because fear of retribution. Banks don't want to go out there in public because fear of their regulators or their investors. So you don't have enough players in this industry that are willing to be public about this and talk about it in an objective fashion. Um, and that's why you have us here.

Donal 46:09

Um I think Mamdani I I also don't think they care. Like the ten, like going back to tenants, like they don't care. Like they see a building that sells for less than what bought like five years before, like earlier, like they don't care. There's still like this rich landlord bought this building for X amount of money. Correct. It's still a rich person. We hate rich people.

Derek 46:25

I think Mamdani is all about affordability, and I feel like he acknowledges that a lot of affordability is on the supply side of bringing more units on. So I really hope that we can get the message across that these, you know, tens of thousands of warehoused units, if there's a way to improve them and rent them out at rents that make sense. I think that's that's something that'd be so huge for the industry.

Kenny 46:47

There's no question it is the fastest injection of supply you can get. I don't care. I mean City BS by Mayor Adams was was exceptional policy, haven't touched the zoning coast since 1961, but that's gonna take years, right? Office can office to Resi conversions is great policy. Still gonna take years to develop, right? I mean, I think we put out on a good year in New York City 30,000 units on a really good year. 50,000 could arguably come online in less than six months. I mean I mean, that is co-op city. The co-op city is 50,000. I believe it's 50,000, probably 50,000 people. But either way, just think about at a scale when you can bring that online, what that would do to free market rights, what that would do to so many families living in shelter right now, shopping with the City FEPS or Section 8 voucher that need housing, but they're caught up in this fight of housing debate and and how much a person should make as opposed to getting people in a much-needed house.

Luke 47:36

Not only will it inject that many housing, it also inject money into these existing buildings, the structures, the boilers, the windows. Yeah, the guys like, oh my God, my building's not worth zero anymore. Let me take care of it. And I'll get a door on it.

Kenny 47:48

By the way, all of that, all of that, but no cost to the state, no cost to the city, no cost to the in-place tenants today. I mean, it's actually one of the most rare win-win-win-win policies I've ever seen. It's insane.

Luke 48:00

I didn't even think it's well who's but they're not gonna allow that, right? See a weaver's not gonna be like, oh sure, landlords.

Donal 48:05

That's what I don't understand. Because Mondami ran on 200,000. He wants to bring 200,000 units in line ready for it now. Exactly. So like I don't understand. It's like a thing.

Luke 48:14

I've heard 60,000, 50,000. Does anyone really know the real meaning?

Courts, Lawsuits, And Federal Angle

Kenny 48:17

It's a very tough number to pin down exactly because it's constantly in flux, but we're confident in saying at a very minimum it's 50,000. And that's based on some DHCR reports, that's based on some internal sort of like uh polling that we do amongst our members, and we can just project that out just based on the size of our membership, but at a minimum it's fifty, so what's what's the plan here?

Derek 48:34

It's basically just blank vacancy resets. So basically, someone could go in, they could spend 10,000 or 100,000, bring the unit online, rent it out, and that's the new rent stabilized rent. Is that the plan?

Kenny 48:44

Well, plan wishless, how do you want to frame this? That'd be amazing. That's it. That's just not unfortunate how policy works.

Derek 48:50

Yeah, I guess if you're saying Because the IAIs don't work, you can't get there.

Kenny 48:53

No, I mean, what I've what we tell folks is that we are the only unique rent control system in the country. Even California, a bastion of tenant protections, and have their own rent control for a number of years, they allow a turnover unit to come on the market at market rate and stay regulated, right? Just what people have to understand is that you have to regulate the tenancy, not the apartment. Same with Jersey City, by the way. Yeah. It's like works great. Bring the unit once someone leaves, let them handle the renovations, let them reset, and then that person can stay there for decades. They can enjoy protections of any big price jumps. But that it's again, it's just not understood. But to answer your question, yes, vacant vacancy reset remains the solution to saving this housing.

Derek 49:34

The current IAIs, I think it's like 12 to 14 years just to get a repayment on your money, and you're capped it like some silly low number.

Kenny 49:42

30,000, 50,000 in every you know, small cases.

Derek 49:45

But it takes 12 years just to recoup your investment. That's never gonna work.

Luke 49:49

I think it's so you're so far in the ball.

Derek 49:52

I'm sure that the legislators here are gonna want it tied to some monetary amount, and I'm sure they're gonna object to the 140th, right?

Luke 49:59

Yeah, but it checks all their boxes of bringing housing on market. It brings out all the rest. Does anyone even know that? Because that's even as someone that's in the business, getting quotes to renovate apartments now is it's six figures. If you're it's if you're doing a band-aid job, it's uh probably a hundred thousand dollars. Definitely to gut a unit right now is like to to stoop to nuts gut a unit is one fifty, one seventy five a unit.

Kenny 50:25

Nitha's projecting to probably go upwards of one point two million dollars per unit in Chelsea houses under a pack renovation, right? That's it. And then when we say someone's gonna pocket that money, and then when we say 50,000 is not enough, we're accused of fraud. And I'm just pointing out, I'm just like, look at the delta here. Yeah, I mean 50,000 or 1.2. We're not asking for 1.2 million IAI, but there is a real money that it costs to renovate in New York City. And and as I said earlier, you've had such a changeover of elected officials in the city where they're mostly renters, right? You have to think about their own life experiences. People legislate based on life experiences and their constituency. If you have actually not engaged in a renovation project, you've actually not spent the money, gone to Home Depot, talked to a GC, and understands what it makes to what it takes to renovate apartment, it doesn't click sometimes. Yeah. Like they they I have had lawmakers actually say, right, like, well, they don't actually need new cabinets, right? All you have to do is put a coat of paint on here.

Luke 51:17

Well, to bring up sub-rehab really, really briefly, like they do have access to this because they have a ton of files and you have to send everything to DHCR for sub-rehabs. They see every bill, they see every canceled check, they know exactly what it costs.

Derek 51:30

They're choosing not to be able to do it.

Luke 51:31

But but the data's there. Like if someone hits on that, like the sub sub-rehab files will tell you exactly what it costs to renovate a building. Yeah. Soup to knots, you know, every cent.

Derek 51:39

Yeah, I totally agree. Um I think we can wrap up in a minute, but just unless you guys have other questions, I have like one last question. Um, all these free market apartments, right? Does the New York Apartment Association have any oversight or interest in the free market aspect of the market, or is it really mostly the rent stabilized association, community housing improvement program?

Kenny 51:58

I know those are all I try to position us as you know, uh sort of like a think tank, but really just an organization for good housing policy, right? And and that can't end at rent stabilization because you know it's 40% of the market, but you still have a huge amount of free market units. So to answer your question, yes, right. Like we were supporters of the ballot questions that were on the ballot last year to help improve housing. We were supporters of City of Yes, that, you know, a lot of it dealt with sort of zoning that really was outside of our concern, if you will. But I think it's important for the public and for lawmakers to understand that we stand not just for the interests of rent-stabilized owners, but for better housing policy in New York overall for tenants and for owners alike. Uh, so yeah, we do involve ourselves from time to time in somebody's housing debates, um, just on free market, just on you know, single family all the way up to multifamily, but the our membership is mostly in the rent stabilized units. Obviously, you have some members that have mixed regulated buildings, so there's an interest in the free market units as well. But we focus specifically on rent stabilization and even more specifically pre-1974 rent stabilization. Very good.

Derek 53:01

I mean, that's the the the free market renters have gotten squeezed so badly since the 2019 clause. And I feel like it's so unfair what's happened to the free market segment.

Functional Bankruptcy Across The Stock

Kenny 53:12

If Mary Mamdanny is successful in freezing the rent four times, he will be the greatest mayor for free market landlords, probably in this junior. 100%. And that's what has to be understood. Yeah, maybe that's a good way to frame it too. That's a really good thing. That's what it is. If you don't understand that, the free people voted for him on affordability. I said this the other day. I mean, we've passed all these laws. We've since 2019, there's been a host of laws on top of that, local and state alike. What are the metrics here? We have a 1.4% vacancy rate. Yeah. Rents have gone through the roof on the free market, disrepairs are going up. Violations are going to be like what are the metrics here? You're telling us these are successful policies that help tenants, and yet tenants are only increasingly disgruntled. Yeah.

Derek 53:51

Um, I have a good friend who lives in a rent-stabilized building in Flatbush, and he's so upset at the property condition, and and it just the landlord, there's no incentive for him to do anything. And these buildings, these buildings are falling apart. And and landlords don't have the money to put money into them, and they're not going to. They'll deal with the violations, they'll get the liens, the emergency repair bills, they will they will give the buildings back because there's no it's it's throwing good money after bad. Yes.

Donal 54:16

And maybe that's the goal. But does all right, that's a real example right there. Does he understand the reason or no?

Derek 54:22

Um not, no.

Donal 54:24

He's completely disconnected.

Derek 54:25

The tenant does not understand the reason.

Donal 54:26

So that's that's the point. That's the disconnect. Like uh there's there has to be some sort of connection.

Kenny 54:31

But again, like I said, even when you get people to connect it, whether it's tenants, whether it's lawmakers, whether it's other nonprofit organizations, or even staffers, the next step is still overcoming the fear that they have. They don't have the political courage to stand up and say, this is a problem, this is how you fix it, because it they'll receive the blowback that I did when I was a lawmaker, right? And and just the human psyche, people don't want to sort of stand out amongst the crowd. So until we get that title change of understanding better housing policy is available, but you have to have the courage to to sort of speak against some of this stuff.

Donal 55:04

Well, that's what's gotta happen. I mean, people are at their breaking point, so it's something's gotta change.

Kenny 55:09

I mean, in many ways, I think, you know, I I think the DSA and Mayor Mamdani and C Weaver, I think they're very much like the dog that caught the car. I I don't think they had any plan to become you know the mayor of New York City within four years of election. So now you're here. Yep. Now you're in the game. Now you run the city of New York, and one thing New Yorkers do, they look to the mayor to be the answer to everything, even if it's not the mayor's responsibility, like the MTA, right? And so you can do one thing on the campaign, but now that you're the boss, you gotta explain why these buildings are crumbling. You gotta explain why the violations are going, you've got to explain why rents continue to skyrocket despite you in office. And the answer can't continually be because just there's just a bunch of bad landlords, right? Because if we look to other cities, Austin, Texas, the rents are going down, right? We've seen parts of Florida rents are going down. So is it just less greed in those states? Just can't be the answer.

Luke 56:00

See, the rent the rents are getting so out of control.

Derek 56:03

Um, all right. Well, it's been it's been it's been a while. This has been really great. Is there anything else you'd like to go over?

Kenny 56:07

We can talk here for three hours, but I'm I think I think that's a good idea.

Luke 56:11

Just to end though, just to end. Do you do you have just one thing real quick? Can what is a goal of yours? Do you have something that you think you can get past or a goal um in the next year, year and a half?

Kenny 56:22

For for fear of of having this uh this podcast come back to haunt me. Yeah, uh, I will just simply say we will continue striving to educate the public and lawmakers. And unfortunately, wins are incremental. Yeah, um, I just have to be real there, and I'm real with my members and I'm real to the public. Uh home runs very rarely happen, especially given the position that we're in. But I'm confident given the data, I'm confident the team that we have and folks like you and people talking about this, yeah, that we can turn the tide on this because again, we know the data and the facts are on our side.

Derek 56:50

Um no, I'll just I'll just say I'm really impressed. Thank you. I feel like you have a really thorough understanding on what's going on, and that's that's great to see. And we checked a lot of boxes, a lot of angles here.

Luke 57:00

And people are lucky to have you doing this because obviously a lot of people are being very, very quiet.

Kenny 57:06

Yeah, I I appreciate that.

Derek 57:07

Yeah, 100%. You're putting yourself in in like the harm's way, yeah.

Luke 57:11

Literally, it's a thankless job. Some of these landlords should give you a building. Yeah. Oh, my wall.

Kenny 57:18

I don't know about no, thank you, and thank you for the work that you do. I mean, listen, we it's all of us in this space, and you guys obviously take your time not just to do this podcast. I mean, this is not your core, your core job here, right? But like getting this word out is important, educating folks in your industry on what we're doing, on just what's happening politically is all helpful because you know, this is how these things spread, right? We all have our own networks, and I understand there's things that I work on that people aren't aware of, and as much as I can get that word out and just educate them as to what the landscape looks like, it's it's deeply helpful to our planet.

Derek 57:49

All right, thank you very much. Thank you.