“D” for Doom; The End is Coming in 2024

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 by Lou Cespedes

I often mention on Twitter that the “end of the world is coming in 2024”. I say it tongue and cheek, both to cause alarm and to get attention. It’s not a joke. It is a warning to a particular class of New York resident, specifically, renters that live in nearly 100-year-old large brick buildings known as “pre-war” apartments. You may live in one of these buildings, and will soon see a sign in your lobby that has a letter grade like the one pictured. This letter grade system is like the one used in restaurants. Usually, if a restaurant keeps getting a failing grade, they are fined, shut down, forced to remediate, and then are re-inspected. In other words, they are forced to or “correct” what is “causing them to fail” before they are allowed to operate.

If you know anything about me, you know that I am an architect by training, and I work in the building profession. One of my job’s main tasks is showing landlords and builders about “energy compliance”. In New York City, a new ordinance went into effect in 2019 called Local Law 97 which requires all buildings of a certain size to become “energy efficient by 2024” or face steep fines for carbon emissions. That may sound innocuous to you, BUT BEWARE! Energy conservation is a great thing for the environment, but may be bad news for you, especially if you live in a pre-war building like many that we see in Flatbush, Lefferts Gardens, and all over Manhattan, Brooklyn and Queens. It is likely most of those buildings are “rent stabilized” or “rent controlled” but are not energy efficient. If you suddenly find a “failing” letter grade posted in your building lobby, and you live in one of these older buildings – especially in red-hot real-estate areas like Flatbush – you are likely a target for mass eviction. Let me explain why.

It’s a generally held standard that Landlords don’t want to renovate apartments for tenants unless they can raise their rent. You hear stories of dilapidated apartments all the time, and how tenants living in buildings for decades have mold or leaks that aren’t repaired. In the past, the state gave Landlords free money that could be used to “improve” a unit in a building. Usually renovations take place only after a tenant moves out, or is forced out, and allows the landlord to raise the rent, profiting while they offset the cost of the improvement. Not anymore! Since the 2019 Rent law went into effect, Landlords now have less options for getting “free money” from the State of New York for “capital improvements” usually granted in the form of “abatements” or “tax breaks”. However, Landlord’s CAN get “free money” today for “energy compliance remediation”, which is a fancy word for “renovations of an entire building”, which spells certain DOOM for poor residents in older buildings. 

To remediate an old building correctly, and to meet the “energy standards” New York City has put in place beginning in 2024, a landlord would have to practically gut an entire vacated building in order to complete the repairs needed in a timely fashion, which means you can’t live in the building while the renovation is occurring, and which also means you will likely be evicted or vacated. These renovations will need to be done from within the buildings, because repairing them from the outside will likely result in the destruction of old brick buildings with great architectural details and features. You have to break down walls to insulate them correctly. You must upgrade heating systems, meters, electrical systems, roofs, windows, etc. In some cases, buildings cannot be saved to make them compliant, and it will be more financially viable to destroy them and to make new buildings.

If your building is “failing” today it is likely not going to be repaired until 2024. That is less than three years from now. When the eviction moratorium ends, this is likely when these mass evictions will begin to occur.

The reason it will not be repaired is simple. The real-estate lobby knows the deadline is approaching, and since the City of New York has committed to this energy compliance goal, Landlords will likely use this excuse to get lots of tax breaks for making their buildings energy efficient, but they will tell the City and State, “hey, I just can’t do it with everyone in the building”. This will become a political football and the City will eventually have to give in to the Landlords or give up on their energy conservation goal. It is much more likely the City will give into Landlords, because if they give up on the goal, they will face an onslaught of lawsuits by builders that have been spending money to make new buildings compliant with new energy standards. 

It is like the insurance game. Most insurance companies know years in advance when “risk” will be too high for them to provide a specific type of insurance. They have statisticians and math experts calculating risk versus profit all the time. So does BIG Real Estate So does the City. The risk for the city of New York is too high because not only did they set the standard, but they are also the enforcer. The City of New York will have no choice but to “enforce the standard” at the expense of tenants, because tenants are the least likely (low risk) to file a successful lawsuit against the city. Tenants are the “pawn” because Landlords will argue – drumroll – “that they are providing better affordable-housing.”  You just wait and see if you choose. The end is near.

Twitter: @louforflatbush         Jeremiah 9 v.12

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