New York City and New York State are in a housing crisis. According NYS Governor Kathy Hochul, New York State is currently facing a severe, once-in-a-generation housing crisis. The Population Reference Bureau reported 51.1% of New York renters are rent-burdened, meaning that they pay more than 30 percent of their income on housing costs — this is the second-highest rate in the country. In NYC, homeless rates have risen to record levels due to residents who lost their homes after getting priced out by rent increases in addition to the influx of migrants. In this economy, with pandemic generated inflation and other factors generating a rise in most costs, market-rate tenants in NYC have been getting hit with 70+% rent increases. Now renters in South Williamsburg’s Bedford Gardens, which is affordable housing under Mitchell-Lama, is looking at a reported 70%–80% rent increase. NYC Housing Preservation Development (HPD) held a hearing on the proposed hikes on January 19.
Bedford Gardens’ landlord, Kraus Management, has applied to increase the base and maximum rents at Bedford Gardens. If approved, the proposal could result in a potential 70%-80% increase in rents between now and 2025. For example, a tenant paying $1000 now would see their rent increase to $1800. Tenants with Section 8 housing vouchers will be protected from this increase, but when they move the next tenants to inhabit these units would be priced with the approved increase. The effect of such an increase would be the loss of affordable housing in a community that has been losing affordable housing and the long-term residents that are the heart and soul of the area.
“Bedford Gardens has provided affordable and reliable housing for Williamsburg, Brooklyn families for generations. These proposed gratuitous rent increases have the potential to displace current residents and make this community unaffordable for tenants,” said U.S. Representative Nydia Velázquez. “With North Brooklyn and the greater city facing a housing shortage, we must oppose these increases and fight for every New Yorker’s right to affordable housing.”
“What Kraus Management is trying to do to the working-class families at Bedford Gardens is cruel and unacceptable,” said NYC Council Member Lincoln Restler. “The Mitchell-Lama program is designed to keep families from being severely rent burdened, and this is an attack on the affordability of the entire complex. New Yorkers deserve access to affordable housing and we’re doing everything we can to ensure that these proposed rent hikes are rejected.”
NYS Homes and Community Renewal website informs, “The Mitchell-Lama Program provides housing across New York State that is affordable to the middle class. It was created by the Limited Profit Housing Act in 1955, which was championed by Manhattan State Senator MacNeil Mitchell and former Brooklyn Assemblyman Alfred Lama. New York State Homes and Community Renewal plays an oversight role for existing Mitchell-Lama developments (privately owned and managed), and works with owners as they near the end of their 20-year affordability requirements to provide low-cost financing tools that help maintain the developments while also extending their affordability.”
Kraus Management responded when asked to comment about their view on affordable housing. Lisa H. Zeiger, vice president of Kraus Management stated, “[Our] entire portfolio consists of only 100% deep subsidy affordable housing projects. Several of projects are within Brooklyn and the remainder are in other boroughs of New York City. We have been managing many of these projects for 50 years and strongly believe in quality affordable housing opportunities which we believe we are providing to the residents we serve.” As to the reasoning behind the request for rent increases, Zeiger said, “Bedford Gardens has not had a rent increase approved since 2012. Over the past 11 years the costs for utilities, insurance, water & sewer charges, as well as every other expense that goes into managing property in New York City has gone up dramatically, especially over the past couple of years as inflation has skyrocketed. In addition, unlike other developments in New York, Bedford Gardens is unique in that the owner pays 100% of the electric costs for the residents.” She also mentioned that, “A majority of residents at Bedford Gardens will be unaffected by the rent increase.” She cited Section 8 vouchers, HUD SCRA eligibility, and other HPD systems would umbrella for most tenants who would see a modest or no increase. She stressed, “It is important to look at this rent increase in the context that the requested rent increase is the first in 11 years. If the Development had instead received annual rent increases in the range of the current Rent Stabilization Increase of 3.25%-5%, it would have resulted in about the same rent roll as our current three-year request.” To view Kraus Management’s complete response go here.
On January 8, NYC Council Member Restler’s office knocked on every door in the Bedford Gardens development, sharing updates with tenants and inviting them to a tenant meeting on January 11 in advance of the HPD hearing. The tenants who came to that meeting shared how the rent hikes would impact their families and were encouraged to testify at the hearing on January 19.
“New Yorkers everywhere are experiencing a historic housing crisis exacerbated by rising rents, which is why the 70-80% proposed rent hike at Bedford Gardens is deplorable,” said NYS Senator Julia Salazar. She urged HPD to protect residents and affordable housing by rejecting the rent hike.
NYS Assembly Member Emily Gallagher also voiced her hope that HPD would reject the increase. “The Mitchell-Lama program was created to build and maintain permanently affordable housing for working class New Yorkers. [The proposed] rent increase is an attack on these families, our communities and New York City as a whole.”