Look, I want to walk you through what's happening in New York City's affordable housing market right now, because it tells us something important about the broader housing challenges we're facing everywhere, including right here in the Bay Area.
According to HousingWire, the NYC Housing Partnership surveyed folks across the affordable housing industry and found that nearly two-thirds of respondents are dealing with operating costs that have basically become unmanageable. What caught my attention is that nobody reported things getting better. This isn't one person complaining about their building or two developers having a rough quarter. This is across the board, affecting both large private owners and nonprofit operators alike.
The real problem they're identifying is that the math just doesn't work anymore. Insurance costs are climbing, utilities are expensive, maintenance is going up, and labor is harder to find and more costly. But here's the thing that really matters: even though buildings are physically occupied, landlords are struggling to actually collect the rent people owe them. The survey found that while most buildings are running at high physical occupancy, only a tiny percentage are actually collecting what they should in rent. The reason is simple and heartbreaking. The people living in these apartments aren't making enough money to pay what's owed, especially in lower-wage jobs.
The survey respondents identified what they think would actually help: scaling up rental subsidies, finding better insurance solutions, helping residents who are behind on rent, and restructuring debt. They're also pretty clear that three-quarters of them expect to need major financial restructuring on at least some of their properties within the next few years.
What I am seeing locally here in the Bay Area is that we're heading toward similar pressures, even if we haven't quite hit the same wall yet. Our insurance and labor costs are climbing just like they are in New York. The affordability crisis we have means many of our residents in regulated units are already stretched thin. If we don't think proactively about supporting both the people living in these homes and the owners trying to maintain them, we're going to end up in the same squeeze.
