As founder of her very own investment and property management firm, Margaret Porres voiced her concerns to Governor Cuomo about the repercussions of the rent regulations passed in June.
The Honorable Andrew M. Cuomo
Governor of the State of New York
Executive Chamber
New York State Capitol Building
Albany, NY 12224
July 12, 2019
Dear Governor Cuomo,
When you signed the sweeping Housing Stability and Tenant Protections Act of 2019 into law last month, many in my industry warned of the unintended consequences of this legislation. Industry experts supported sensible reforms that would benefit both tenants and landlords alike. However, the NYS Legislature barreled down a path that will exacerbate the housing crisis, force many business owners to lay off tens of thousands of employees, and substantially decrease investment values thereby having significant adverse effects on the local and state tax bases.
First and foremost, this legislation makes it significantly more difficult to upgrade and maintain aging infrastructure. Most multifamily regulated buildings are nearly 100 years old and require regular upgrades and renovations, whether it be new boilers, new roofs or new kitchens and bathrooms. By capping major capital improvements (MCIs) and individual apartment improvements (IAIs) so severely, few landlords will be able to improve these buildings, while lenders will be unwilling to provide capital to do so. Why would they? They cannot recoup the value of their investment. As a result, we will see a repeat of the 1970s and 1980s when similar rent laws decimated neighborhoods by robbing them of the opportunity to revitalize housing stock.
Second, this legislation will have a profound, long-term negative impact on the value of properties. Instead of regeneration and continual investment into these assets, many owned by thousands of small business landlords, they will fall into severe disrepair reducing the tenants’ quality of life under the guise of Tenant Protection. Seemingly overnight, Albany completely upended an industry critical to the economic vitality of our city and state in an effort to score political points, while doing absolutely nothing to expand access to affordable housing for those who need it most.
Third, tens of thousands of jobs will be lost at small and mid-sized companies, many of which are minority and women-owned businesses, including: property managers, construction managers, accountants, architects, engineers, construction workers and contractors. Such an abhorrent policy deprives the city and state of billions of dollars in tax revenue while sending hard working men and women, an overwhelming majority of which are the very constituency that this legislature falsely claims to champion, to the unemployment line – a “lose, lose, lose” scenario for all except those politicians responsible such a calamity. New Yorkers will unfortunately und unnecessarily suffer for years.
As a direct result of these newly passed reforms, I, in my professional capacity as the owner of a mid-sized business, have opted to divest myself of all New York City property and construction management. That’s right, after two decades in the local industry, devoted to providing high-quality housing to thousands of hard-working New Yorkers, we are closing up in the State of New York. I will not be the last – as many of my colleagues are making similar significant and drastic business decisions in order to comply with these irresponsible laws.
You can consider me the canary in your coal mine.
Respectfully,
Margaret Streicker Porres
President, Newcastle Realty Services LLC
Adjunct Professor, Columbia University of the City of NY
Member of: CHIP, RSA, SPONY & REBNY
