By Zayba Abdulla, Allison Lane, Joel Kolkmann, Sadia Rahman, Ellen Shakespear, Kavya Shankar, Adán Soltren
The inability to access and depend on truly affordable housing means that this city has become out of reach and inhospitable to most. What financing models and complementary legal or policy reforms do we need to encourage deeply affordable housing development and preservation in New York City? We explored reforming rent regulation and strengthening penalties against bad actor landlords by increasing public control of assets.
Lessons from Spain and Ireland
Rent Regulation and Incentives for Keeping Tenants in Their Homes: Spain
Spain’s national Ley de Vivienda, or housing law, strengthens and helps enforce rent regulation. The law sets a national limit on rent increases for lease renewals and enabled Spain’s autonomous regions to establish áreas tensionadas, or “stressed zones,” where rent increases between leases are restricted. The Catalan government has designated 140 municipalities áreas tensionadas. More than 80% of the region’s population lives within one.
The law also creates tax incentives for landlords providing further discounted rent. Landlords benefit from a 50% tax abatement on the rental income received. Further abatements include 90% abatement if rent on the new lease is 5% less than the rent of the prior lease, 70% abatement when the unit is rented to individuals ages 18 to 35 or to a non-profit housing organization, and 60% abatement when the unit has been rehabilitated two years prior to the new lease.
Right to Housing: Barcelona
Barcelona’s Right to Housing Plan (2016-25) created a census of vacant apartments and developed a program to incentivize landlords to rehabilitate and rent these units. The City offers capital subsidy for rehabilitation work, in addition to other benefits including waiving fees for building energy efficiency permits. The plan also established an acquisition program that allows all municipalities in Catalonia to acquire properties through: pre-emption rights for properties sold on the private market and the right of first refusal on foreclosed properties.
Housing for All Plan: Ireland
Ireland’s 2021 “Housing for All Plan” introduced the Compulsory Purchase Order (CPO) Scheme, a nationwide, local authority-led initiative to purchase vacant homes for “the public good.” The proposed “residential zone land tax,” would function as a 3% tax on undeveloped land zoned residential that developers are holding offline. The plan also introduced a cost-rental housing model that targets Irish residents who are above the threshold for social housing but have difficulty affording private market-rate accommodation.
Big Swings for New York City
- Bring vacant apartments online through registration, inspection, and fees for owners of vacant residential units.
- Expand CityFHEPS and the Project-Based Voucher (PBV) program to reduce evictions and keep people in their homes.
- Reform rent regulation to right-size rents from inflated rates due to the systemic overcompensation for rent regulated landlords.
- Incentivize rent reduction and building maintenance through tax abatements for landlords.
Fellows
Zayba Abdulla
Allison Lane
Joel Kolkmann
Sadia Rahman
Ellen Shakespear
Kavya Shankar
