TAX ARREARS IN
RENT STABILIZED BUILDINGS, 1994


Summary

The problem of tax arrears in the rent stabilized sector continued to worsen in 1993. Both the number of buildings at least three quarters in tax arrears and the mean level of arrears increased. Overall, the amount of arrears per unit rose by 8%, but for buildings that had arrears in both 1992 and 1993, arrears per unit increased by 33%. Since this category of buildings constitutes most of all stabilized buildings with arrears, it appears that 1993 witnessed the on-going deterioration of the worse-off buildings.

In another ominous note, the size of buildings at least three quarters in arrears has been increasing steadily for the past four years. In 1989, the average size of a building in arrears was 13.4 units. In 1993 the average size was 17.6 units.

Last year's report on tax arrears succeeded in characterizing buildings with tax arrears but was unable to answer several questions concerning mortgage debt and foreclosure actions, the current physical conditions of the buildings, and various characteristics of the owners of these buildings. Towards these ends, in the past year staff has: (1) conducted further research on mortgaged properties, (2) surveyed the external condition of over 300 properties, and (3) mailed out 2500 surveys to owners of buildings with tax arrears.

Much of last year's report focused on mortgage debt and found buildings with tax arrears to be overmortgaged as a group, yet did not know to what extent these buildings are facing foreclosure actions. This year, staff determined that 1 out of 5 buildings with arrears face mortgage foreclosure actions. However, relatively few of the foreclosure actions have yet resulted in property seizures. Furthermore, statistical analysis found that mortgage debt, while certainly not the sole causal factor of arrears, probably does play a significant and independent role, thus reiterating the findings of the previous report.

Are buildings with tax arrears in worse physical condition? A survey of the external condition of these buildings found them to be in slightly worse physical condition than buildings citywide. Few buildings had walls or windows in poor condition and nearly all of the buildings were fully occupied. However, buildings with tax arrears had significantly less commercial space than their citywide counterparts.

The survey of owners of buildings with tax arrears has shown that a 'typical' owner of a building in tax arrears owns the building selected for the survey and one or two other small buildings (perhaps a private residence). Few of these owners employ outside management companies. The typical building in tax arrears is a pre-war 12-15 unit building with about one rent controlled unit and a vacancy rate roughly equal to the citywide norm.

The owner survey revealed vacancy and collection losses to be a severe problem facing buildings with tax arrears. According to the respondents, nearly 20% of the potential monthly rent roll is typically uncollected, 6% due to vacancy and 13.5% due to collection losses. Unrecovered rent of more than $2500 from a single tenant was a widespread dilemma affecting nearly 70% of owners. Owners also have relatively little income from commercial units with which to buffer a shortfall in the collection of residential rents.

When asked what one single RGB initiative would improve the economic viability of their building, two-thirds of the owners favored some type of supplemental increase. Specifically, 41% of respondents favored a supplemental increase for low rent apartments or a supplemental increase for long term tenants, and 26% favored a supplemental increase for small buildings. In contrast, only one-third of the owners favored increased general guideline allowances - 28% favored higher lease renewal allowances and 5% favored higher vacancy allowances.

Change in Arrears, 1988-93

Staff began this study by obtaining a tax arrears file from the Department of City Planning. The City Planning database included information from several sources, including the Department of Finance (e.g. tax arrears) and the Department of General Services (e.g. vestings). In 1991 and prior years City Planning revised the arrears figures annually; in 1992 semi-annual updates were begun. The newest tax arrears figures used in this report are fairly current, dating from January 1994.

The City Planning arrears file was matched with the RGB's list of rent stabilized properties, resulting in a database consisting of stabilized buildings with tax arrears in one or more years from 1988 to 1993. All of these buildings were registered with the State Division of Housing and Community Renewal. Buildings less than three quarters in arrears were excluded from the sample; the amount owed by many of these buildings was insignificant.

In 1993 both the number of buildings in arrears and the level of arrears grew worse. The number of rent stabilized buildings at least three quarters in arrears has been increasing steadily since 1989 and did not lose any steam in 1993. Of the 38,000 registered buildings, 4291 (11%) were at least three quarters in arrears in January 1994. This figure is a sizable increase over 1992 and more than 50% higher than 1988.

See Tax Arrears per Unit and Number of Rent Stabilized Buildings in Arrears, 1988-93

The average amount of arrears per unit in buildings at least three quarters in arrears has also increased since 1992, though at a slightly slower rate of 8%. The mean level of arrears has increased 91% since 1988, from $800 per unit to $1530.(1)

The fact that mean arrears levels have not increased as much as in previous years does not necessarily mean that growth in arrears is slowing. In fact, in 1993 there was an influx of slightly larger buildings to the arrears group that had not been in arrears in the previous five years. These buildings, which made up almost 20% of all buildings in arrears in 1993, had mean arrears levels of $680, substantially lower than the mean level for all buildings in tax arrears. For buildings that had been in arrears in both 1992 and 1993, the mean level of arrears has increased 33%, from $1530 to $2030 per unit. This group of buildings comprises 70% of the sample and for these buildings, 1993 has witnessed their on-going deterioration.

Although the number of buildings at least three quarters in arrears increased only 12% since the previous year, the number of units in arrears increased twice as fast, from 60,900 in 1992 to 75,500 in 1993. In fact, the size of buildings at least three quarters in arrears has been increasing gradually but steadily since 1989. In 1989, the average size of a building in arrears was 13.4 units and in 1993 it was 17.6 units. The new additions to the arrears group in 1993 average 26 units, substantially higher than the overall mean building size. As the long-running recession continues, larger and larger buildings have begun to accumulate arrears.

See Total Number of Units and Average Size of Buildings in Arrears, 1988-993


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Redemption Rate for Rent Stabilized Buildings
Year of Filing% of Buildings Redeemed
198990.8%
199073.1%
199168.1%
199229.4%

Note: The 1991 figure is based on a weighted average and the 1992 figure includes a projection for December 1993.
Source: Department of Finance, Annual Reports on the NYC Real Property Tax.


The arrears problem may have finally translated into increased vestings by the city. In fiscal 1993 nearly 500 titles were vested, the most in any year since 1986. However, current figures imply that vesting activity in fiscal '94 has dropped off dramatically from the previous year. This decline is surprising, given the trend in arrears, and may not be completely accurate since a large Brooklyn vesting is soon expected.

Nevertheless, a precipitous drop in the redemption rate of properties filed for vesting (see table above) foreshadows larger numbers of buildings vested in the near future. The redemption rate, calculated as the percentage of properties withdrawn from the vesting process by December 31st of the year following the year of initial filing, decreased from 68% for buildings filed in 1991 to 29% for buildings in 1992. With far fewer properties being redeemed by owners, the number of buildings taken by the city should increase dramatically.

Arrears and Mortgages Debt

Last year's report on tax arrears in rent stabilized housing ended with the warning that properties with tax arrears are "overmortgaged" as a group, and suggested that aggregate income is insufficient to cover both mortgage debt and operating expenses. It presumed that many buildings with arrears were facing mortgage foreclosure actions but had no further information at the time. Two major questions were left unanswered by last year's report:

  1. Does the measured association of mortgage debt and tax arrears indicate a causal relation or a mere coincidental relation between the two?
  2. To what extent are marginal buildings facing foreclosure actions and how serious a threat does foreclosure present to buildings with arrears?
RGB staff attempted to resolve these questions through two parallel studies. The first study, using sophisticated statistical analysis(2), helped clarify the role mortgage debt plays in determining tax arrears. It found that mortgage debt, while certainly not the sole determining factor of arrears, probably does play a significant and independent role. The second study, a review of records at the various county clerk offices, has shown that 1 out of 5 buildings with arrears, concentrated mainly in Manhattan, face mortgage foreclosure but that few of the foreclosure actions have yet resulted in property seizures.

Measuring the Effect of Mortgage Debt on Tax Arrears

To get a better understanding of the relation between mortgage debt and tax arrears, a statistical analysis was undertaken on 333 randomly selected buildings with arrears. This analysis looked at mortgage and arrears levels in the four years from 1988 to 1991. Due to the unavailability of complete mortgage data, the mortgage figures used in the analysis were only of debt assumed since 1986. Thus any measured effect of debt levels on arrears is likely to be somewhat understated since only recent debt, and not a building's total debt level, is used in the analysis.

The analysis reveals a statistically significant and positive relation between mortgage debt and arrears.(3) However, factors such as building location, lis penden status(4) , and date of observation (i.e., if the building was in arrears in the recession years of 1990 or 1991, or in the pre-recession years of 1988 or 1989) also significantly and positively affect the level of arrears.(5)

Although the analysis has indicated a statistically significant relationship between debt and arrears, it also suggests that in times of recession there are equally, or more, important causes of tax arrears than mortgage debt. The measured association between debt and arrears is strongest in 1988 and grows continually weaker in later periods. In fact the measured association is not even statistically significant in 1991 - recessionary forces have overwhelmed any effect debt may have.

To insure that these results were accurate, further analysis attempted to control for any variability in arrears due to differences in average rent by creating a ratio of arrears to rent levels for each particular building. This ratio variable was found to be significantly and positively related to mortgage levels in three of the four years of observation, thus supporting the hypothesis that mortgage debt affects arrears independently of other variables.(6)

The analysis has shown that the level of mortgage debt positively affects the level of tax arrears. Yet there are other qualities, such as building location and year of observation, which also positively affect the level of tax arrears. It would be difficult to draw the conclusion that high debt levels are solely responsible for the level of tax arrears, particularly in times of recession. Yet the analysis supports the notion that high debt levels are at least one significant factor in determining a building's tax arrears.

Mortgage Foreclosure Actions

If buildings with tax arrears are overmortgaged as a group, as last years report concluded, then many buildings may be facing mortgage foreclosure actions. The RGB staff reviewed case files at the various county clerk's offices to determine the degree to which buildings are facing these actions.

Sixty three buildings had at least one pending mortgage claim on their property, or 19% of the 333 building sample. Nearly one out of every three buildings in Manhattan had an outstanding claim.(7) The incidence of lis penden status is lower in the other boroughs, from one out of every five buildings in Queens to one out of ten in Brooklyn.

A distinct trend emerges when comparing buildings with mortgage claims to those without. In 1988 lis penden and non lis penden buildings had comparatively equal arrears levels per unit. But after 1988 arrearage in the lis penden buildings grew much faster. Mean arrears levels increased 330% for lis penden buildings, from $225 per unit in 1988 to $970 per unit in 1991. Arrears in buildings without mortgage claims rose only 68%, from $235 to $400.

Coupled with this rise in arrears is a corresponding rise in debt levels. The mean debt level of a lis penden building rose 97%, from $20,650 per unit in 1988 to $40,620 in 1991. Debt burdens for buildings without mortgage claims rose 55% in the same period, from $12,000 to $18,620 per unit. In each year of observation, lis penden buildings had roughly twice as much of a mortgage burden as non lis penden buildings. It appears that the relatively large debt burdens of lis penden buildings significantly affected their ability to pay taxes.

See Average Mortgage Debt per Unit, Lis Penden Buildings vs. Non-Lis Penden Buildings

Another striking finding in the examination of the lis penden subsample is that mortgages issued by banks constituted only a small proportion of the loans in default. Of the 45 loans reviewed, 28 were issued by private mortgage lending companies, 10 by private individuals, and 7 by banks. It is difficult to determine the cause for the prevalence of non-bank lenders. However, after comparing the terms and interest rates in this subsample with the findings of the RGB's annual mortgage survey, one can definitely exclude the possibility that non-bank lenders were offering more attractive lending terms. In fact 41% of the mortgages reviewed had terms less than five years- the minimum term offered by banks in the annual mortgage survey.

It is difficult to determine the precise resolution for all the foreclosure actions. In only ten instances (24% of the buildings with available information) did an action force the indebted owner to sell the property. There was no apparent resolution for the majority of cases reviewed and in most instances the defendant still holds the deed. This lack of information suggests a loan modification or other agreement was reached between the lender and the owner but there are no guarantees that this is the case.

In sum, mortgage debt was found to be one significant cause of tax arrears among stabilized buildings. There are other significant causes as well, indeed, some buildings in the tax arrears sample had no mortgage debt whatsoever. Nevertheless, large debt burdens were an important factor, particularly for buildings facing mortgage foreclosure actions. In these buildings, concentrated mostly in Manhattan, high mortgages and the recession of the early nineties formed a powerful combination which left them unable to make both tax and mortgage payments.

Survey of External Conditions

In the summer of 1993, the RGB staff undertook a survey of the external conditions of all 333 buildings in the tax arrears subsample in order to determine the physical conditions of these buildings. Last year's report determined that buildings with tax arrears had more housing code violations than other buildings. Yet the question remained as to whether this history of violations accurately reflected current building conditions. Without access to the interiors of these buildings, staff was only able to survey the exterior of the building and the following findings are in no way indicative of interior conditions.(8)

The survey found that, on the whole, the external conditions of the surveyed buildings were only slightly worse than the citywide norm. Nearly all of the buildings surveyed were occupied and few had walls or windows in poor condition. In fact several buildings appeared to have been recently renovated. Perhaps the most pronounced difference concerned the scarcity of commercial units - buildings with tax arrears had significantly less commercial space than their citywide counterparts.

Almost all of the buildings are fully occupied and most of the units are in exclusively residential buildings. Only 20% of the units are in buildings which also have commercial space, a figure significantly lower than the 32% of units citywide as determined by Income and Expense data.


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External Building Conditions, Buildings in Arrears vs. Citywide Norms
All Buildings 1991 HVSRGB Survey
Condition of External Walls
A.Missing bricks, siding, or other wall material1.9%1.5%
B.Sloping or bulging of outside walls0.5%0.4%
C.Major cracks in outside walls1.2%1.4%
D.Loose/hanging cornice, roofing, or other material0.9%6.4%
E.None of these problems with the walls95.8%91.2%
F.Unable to observe walls0.4%0.1%
Condition of Windows
A.Broken or missing windows2.6%5.7%
B.Boarded up windows2.1%1.7%
C.Loose window frames0.6%9.6%
D.None of these problems with windows95.3%85.9%
E.Unable to observe windows0.1%0.0%
Condition of Entrances and Exits*
A.Broken or missing front door -- 1.0%
B.Broken or missing fire escapes -- 0.0%
C.Entrances are not locked or secure -- 9.6%
D.Broken or crumbling stoop -- 6.0%
E.None of these problems with entrances or exits -- 85.9%
F.Unable to observe entrances or exits -- 3.6%

Note: Figures are percentage of units in buildings with observed conditions. A building may have more than one detrimental condition and thus categories may sum to more than 100%.

Source: 1991 Housing and Vacancy Survey and 1993 RGB External Survey

* No HVS information available for this category.


As the table above ("External Building Conditions, Buildings in Arrears vs. Citywide Norms") indicates, the vast majority of units are in buildings with exterior walls in good condition, free from all detrimental qualities. This finding is a bit lower than the 1991 HVS figure(9), but this is not a significant difference, given sampling errors and differing survey techniques. The one pronounced difference, it appears, is that loose roofing is more prevalent in buildings with tax arrears than the city wide average.

The overall condition of windows appears to be slightly worse among buildings with tax arrears. Nearly 10% of the units have loose window frames as compared with 1% of the city wide average, and 6% have broken or missing glass panes compared with 3%. Yet surprisingly there is a high incidence of modern windows as well; in over 40% of the units, it appears, the original windows have been replaced.

As expected, the condition of the surrounding buildings is worse in the poorest sections of New York: northern Manhattan, the southern Bronx, and northern and eastern Brooklyn. Units located on blocks with vacant or boarded up buildings and vacant lots are almost entirely located in these areas. Nearly 70% of all units in the survey are located on blocks with no vacant lots or other problems mentioned, a finding similar to the citywide average.

In sum, buildings with tax arrears are, to a small extent, in worse physical condition than buildings citywide. They have slightly more problems with walls and windows than other buildings. However the relative lack of commercial space emerges as the most pronounced difference between buildings with tax arrears and their more financially sound counterparts.

Owner Survey

A central concern when studying buildings in arrears has to be the efficacy of various policies designed to aid the owners of these buildings. Yet before policies can be formulated, certain characteristics of these buildings and their owners must be known. These characteristics include the number of buildings a landlord owns, how aware owners are of city programs and regulations related to rental housing, what percentage of the rent roll is typically uncollected and why, which particular policy initiatives owners themselves believe would best help their buildings, and so on. A survey designed to answer these and other questions was first tested on 500 owners of rent stabilized buildings in arrears in February 1994. The results were intriguing but due to the small sample not particularly reliable. The survey was revised and 2460 surveys were mailed to owners in April.

Methodology & Response

The mailing list for the survey was based on the 1993 tax arrears sample. This list was then matched to a 1991 DHCR list of stabilized owners in order to obtain the owner addresses. To insure a response from a wide variety of owners, no more than two surveys were sent to the same owner even if that owner had multiple buildings on the list. More than three hundred usable surveys were returned, a response rate of almost 13%.

The staff's initial concern was whether the survey response was representative of the entire arrears sample. In building size and location, the response group largely mirrored the overall tax arrears sample. The median building size of the survey respondents is 11.5 units and the median size in the whole arrears group is a similar 11 units. The borough distribution of the survey responses were also fairly similar to the arrears group as a whole. However, the mean and median arrears levels for the survey respondents are lower than the citywide totals. Although the arrears values in the survey response exhibit the same trends that the citywide values do- constantly increasing, particularly after 1990- the values are also consistently lower.

This difference in arrears levels between the respondents and the arrears group in general has certain implications for the interpretation of the survey. Because the survey respondents are in less dire financial straits than the general arrears group, the results of the survey may actually understate problems such as vacancy and collection losses, the inability to raise rents, the unavailability of financing, and so on. On the other hand, certain policy preferences expressed by the respondents may not reflect the choices of owners whose buildings are in even higher tax arrears- owners of buildings with very high tax arrears may believe their buildings warrant completely different policies than owners of buildings with little arrears.

Owner and Building Characteristics

The typical owner of a building in tax arrears owns the surveyed building and one or two other small buildings (perhaps a private residence). Some large owners did respond to the survey however, and thus while the median number of buildings owned is two, the mean number is four. The surveyed building had been owned for an average of twelve years- long enough for the owner to 'know' the building thoroughly and sufficiently long that ownership extends throughout the entire arrears period of 1988-1994.

One out of five owners was past the retirement age of 65. Only 6% of the owners employed an outside management company to run the building.(10) This percentage, although small, is not unusual- 8% of the respondents to the staff's annual Price Index Survey employed outside management companies.

The typical building is a pre-war 12-15 unit building. Often the superintendent or owner occupies one of the units and, on average, 8% of the units are rent controlled. The proportion of controlled units in these buildings is rather normal- in community districts with high levels of arrears, 8% of all units are rent controlled as well.

The vacancy rate in these buildings was 4.6%, slightly higher than the citywide vacancy rate as determined by the 1993 HVS but roughly comparable. The length of unit vacancy was much shorter, however, in the surveyed buildings as opposed to the HVS data. In the RGB survey, 32% of vacant units had been on the market for less than one month as opposed to 12% of the vacant units in the 1993 HVS. Thus if these results are to be believed, buildings with arrears are less affected by long term vacancy than the citywide whole.

Building Income

High vacancy and collection losses are a pressing problem affecting buildings with tax arrears; almost 20% of the average building's potential rent roll remains uncollected due to these losses. A 6% loss derives from vacancies and an additional 13.5% from an inability to collect rent from tenants. Further evidence of the severity of collection losses lies in the common claim among owners of large amounts of unrecovered rent. Almost seven out of ten owners state they have suffered at least $2500 of unrecovered rent from a single tenant in the past six years. Many owners report this has happened in multiple years. As the table below indicates, unrecovered rent is a close second to major building repairs for the most cited major expense beyond normal operation and maintenance costs.


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Percentage of Buildings Reporting Costly
and Unusual Events in the Period 1988-93:
Breakdown of a major building system, such as the boiler or roof, requiring repairs or replacement costing $2500 or more70%
Unrecovered rent of $2500 or more from a single tenant68%
Legal fees or other unusual administrative cost in excess of $250040%
Vandalism of common areas or apartments resulting in damage of $2500 or more34%
Fire damage to common areas or apartments resulting in damage of $2500 or more15%

Source: RGB Survey of Rent Stabilized Owners, 1994.


Buildings with tax arrears cannot raise their rents as much as the guidelines allow and as much as buildings without tax arrears have been able to raise rents. The owners stated they can charge the full guideline allowances on 78% of renewal leases and 72% of vacancy leases. These figures translate into an annual rent increase below the RGB's Rent Index of 2.9%. Of course owners can raise rents through other means, but rent increases deriving from the current guidelines are less then legally allowed.

Buildings with tax arrears have fewer commercial units than the citywide average and derive less income from them. About 28% of the units are in buildings with commercial space. Although this figure is greater than the 20% determined by the RGB's external conditions survey, it is still less than the 32% figure for the city as a whole.

The commercial vacancy rate among the respondents was 22%- there is no comparable figure for all stabilized buildings but this seems unusually high. Only 6% of building income was attributable to rent from commercial units, less than the 11% of income that the 1994 Income and Expense report determined for the citywide total.

Debt

Seven out of ten buildings currently carry a mortgage. This tends to confirm the finding in last year's tax arrears study that over two-thirds of the buildings with arrears have mortgages. According to the survey, nearly half (44%) of the buildings with mortgages had those mortgages held by banks, another 19% had mortgages from non-bank mortgage institutions and the remainder (37%) had a mortgage held by an individual (usually the previous owner). That less than half of the mortgages came from banks is not surprising since information from the RGB Mortgage Survey indicates banks tend to lend to properties generally larger than 10 units with vacancy and collection losses averaging 5% of the potential monthly rent roll. The majority of buildings surveyed clearly do not fit that profile.

Refinancing activity in the past year was virtually non-existent for the surveyed buildings. Only 4% of the buildings reported that they were able to reduce their mortgage debt through refinancing and another 1% were able to renegotiate terms with their mortgage lender. This result is in stark contrast with the 1994 RGB Mortgage Survey which found that 23% of fixed rate mortgages were refinanced last year.

What is to be done?

Owners held diverse viewpoints when asked what single city initiative would most improve the profitability of their building. The fact that these buildings are in arrears implies that operating and maintenance costs may be too high. Consequently 40% of the respondents favored lower property tax rates or lower water & sewer rates. Another 30% favored establishing a "fairer and more efficient housing court", no doubt reflecting the impact that collection losses have on these buildings. The third most popular choice was increased income through higher rent guideline allowances, favored by 25% of the respondents. Only 3% preferred an increased welfare shelter allowance and 2% listed reduced paperwork at government agencies as their main concern. In general, we can conclude that owners of buildings with tax arrears favor a curtailment of costs or reduced collection losses over an increase in rental income derived from higher rent guidelines.

See City Policy Options Preferred by Owners of Buildings in Arrears

Two-thirds of owners with buildings in tax arrears believe that a targeted RGB initiative would improve the profitability of their buildings more than an increase in the general guideline allowances. Specifically, 41% of respondents favored a supplemental increase for low rent apartments or a supplemental increase for long term tenants, and 26% favored a supplemental increase for small buildings (defined as 20 units or less). The other one-third of the owners favored general, non-targeted increases found in higher renewal and vacancy allowances- 28% of respondents favored higher lease renewal allowances and 5% favored higher vacancy allowances.

See RGB Policy Options Preferred by Owners of Buildings in Arrears


Notes

  1. In this report the definition of 'at least three quarters in arrears' is interpreted more specifically than in last year's report and thus tax arrears figures reported here for 1992 and earlier years are somewhat different than last year's report.
  2. The analysis involved multiple regression equations. Regression analysis measures the degree of association between a dependent and independent variables and is often used in economic forecasting.
  3. The elasticity of arrears per dollar of debt was found to be .002- that is for every additional $500 of debt assumed by a unit, its arrears can be expected to increase by $1. Thus the results reveal that a unit with no debt averages $322 in arrears, a unit with $10,000 of debt per unit can expect arrears of $344, and a unit with $50,000 of debt can expect arrears of $428.
  4. Lis penden status indicates that a building's deed is contested by a pending lawsuit.
  5. Arrears levels of buildings in Manhattan are, on average, $400 more per unit than buildings in the other boroughs. Buildings with lis penden status have, on average, arrears levels $150 more per unit than buildings without mortgage liens. Lastly if the arrears occurred in 1990 or 1991 then the amount owed would be, on average, $120 or $250 more respectively than if the arrearage occurred in 1988 or 1989.
  6. Due to the nature of the data, it is difficult to quantify this relationship of the ratio variable and mortgage debt. It is possible to look at individual years but not to make cross year comparisons. In every year but 1988 a statistically significant association was found between the ratio variable and mortgage debt. The most pronounced year was 1990, where a building with no mortgage debt could expect an arrears to rent ratio of .65 while a building with $20,000 debt per unit could expect a ratio of .99.
  7. While Manhattan buildings only comprise 37% of the larger 333 building sample, nearly 60% of the lis penden buildings are located in Manhattan.
  8. Twenty one buildings were not located or surveyed and one building had been demolished. This leaves the total number of buildings in the survey at 311. These 311 buildings contain a total of 6480 units, the number which was used to calculate all percentages.
  9. The evaluative categories employed in the RGB External Survey are the same that the HVS uses to assess exterior building conditions.
  10. 77% of the owners managed the building by themselves, and 17% had their own management company run the building.


Redemption Rate for Rent
Stabilized Buildings

Year of      % of Buildings
 Filing            Redeemed
=======      ==============
  1989           90.8%
  1990           73.1%
  1991           68.1%
  1992           29.4%

Note: The 1991 figure is based on a weighted average and the 1992
      figure includes a projection for December 1993.

Source: Department of Finance, Annual Reports on the NYC Real Property Tax.

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External Building Conditions,
Buildings in Arrears vs. Citywide Norms

                                                All Buildings      RGB
                                                     1991 HVS   Survey
Condition of External Walls
 A. Missing bricks, siding, or other wall material       1.9%     1.5%
 B. Sloping or bulging of outside walls                  0.5%     0.4%
 C. Major cracks in outside walls                        1.2%     1.4%
 D. Loose/hanging cornice, roofing, or other material    0.9%     6.4%
 E. None of these problems with the walls               95.8%    91.2%
 F. Unable to observe walls                              0.4%     0.1%

Condition of Windows
 A. Broken or missing windows                            2.6%     5.7%
 B. Boarded up windows                                   2.1%     1.7%
 C. Loose window frames                                  0.6%     9.6%
 D. None of these problems with windows                 95.3%    85.9%
 E. Unable to observe windows                            0.1%     0.0%

Condition of Entrances and Exits*
 A. Broken or missing front door                         ---      1.0%
 B. Broken or missing fire escapes                       ---      0.0%
 C. Entrances are not locked or secure                   ---      9.6%
 D. Broken or crumbling stoop                            ---      6.0%
 E. None of these problems with entrances or exits       ---     85.9%
 F. Unable to observe entrances or exits                 ---      3.6%

Note: Figures are percentage of units in buildings with observed conditions. A building may have more than one detrimental condition and thus categories may sum to more than 100%.

Source: 1991 Housing and Vacancy Survey and 1993 RGB External Survey

* No HVS information available for this category.

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Percentage of Buildings Reporting Costly
and Unusual Events in the Period 1988-93:

Breakdown of a major building system, such
as the boiler or roof, requiring repairs
or replacement costing $2500 or more          70%

Unrecovered rent of $2500 or more from a
single tenant                                 68%

Legal fees or other unusual administrative
cost in excess of $2500                       40%

Vandalism of common areas or apartments
resulting in damage of $2500 or more          34%

Fire damage to common areas or apartments
resulting in damage of $2500 or more          15%


Source: RGB Survey of Rent Stabilized Owners, 1994.

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