Why 60,000 New York Apartments Sit Empty in a Housing Crisis, with Kenny Burgos

Paula Pant (0:00)

Did you know that in New York City, you can buy an apartment building for about $50,000 per unit? And in fact, there are some apartments where units go for as cheap as $10,000. For example, there's a 24-unit building that's listed for sale right now for $1.3 million. That's $54,000 per unit on average. Today's guest represents the owners of those buildings, and his advice is, don't buy them. Why? That's today's episode. Welcome to the Afford Anything Podcast, the show that knows you can afford anything, not everything. The show covers five pillars, financial psychology, increasing your income, investing, real estate, which is the topic of today's episode, and entrepreneurship, which is also kind of the topic of today's episode. So the acronym is double-eye fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia here in New York City. And in this city, more than 60,000 apartments are sitting empty in the middle of a housing crisis. Why are there so many vacant apartments in New York? Why does this city have apartments that are selling for $50,000 per unit that nobody wants to buy and nobody ought to buy? And what does this mean for the rest of the country? Joining us today to talk about that is Kenny Burgos. He is a New Yorker through and through, grew up in the Bronx, raised by a single mom with three sisters. He went to Bronx Science and earned an economics degree from SUNY Albany.

He was a state assembly man from 2020 to 2024, representing the Southeastern Bronx. And he is now CEO of the New York Apartment Association, which means he tours vacant apartments here in the city every week. New York has a housing shortage of about half a million units, and yet many units are sitting empty. He's here to explain why, and what effect this has on tenants who are living in deteriorating buildings.

In this episode, you're going to learn why three bedrooms rent for less than one bedroom. You're going to learn why properties that are very cheap are a warning. And regardless of whether you are a tenant or you are a landlord or like me, you're both simultaneously, you're going to get a masterclass in the economics of real estate told through the lens of New York City.

Enjoy.

Hi, Kenny.

Kenny Burgos (2:23)

Hey, Paula.

Paula Pant (2:24)

Thank you for joining us.

Kenny Burgos (2:25)

I'm excited. Thanks for having me.

Paula Pant (2:27)

I'm going to start this in an unusual way by laying out the four types of people who are likely listening to this show right now.

Number one, landlords who are listening to this show. Mom and pop landlords, they're landlords on purpose. They intentionally purchased a rental property. That's number one. Number two, we have accidental landlords. They had a primary residence. They moved out. They had a 3% mortgage interest rate that they didn't want to give up. That's you?

Kenny Burgos (2:56)

Yeah. Nice.

Paula Pant (2:58)

Number three, we have aspiring landlords. They may or may not even own a primary residence yet, but they hope to one day own a rental property.

And then number four, we've got people who never want to have anything to do with rental property at all. They've thought about it, and it's not for them, but they've got friends, they've got family, they've got people in their orbit. It's kind of like me with running. I know that I'm never going to be a runner, but I've got plenty of friends who are runners.

Kenny Burgos (3:25)

And have deep respect for it, right?

Paula Pant (3:26)

Yeah, exactly. So I respect that that's great for them. It's not for me.

Kenny Burgos (3:30)

Same here.

Paula Pant (3:31)

Most people who are listening are not in New York, and the specifics of real estate in New York is very different from anywhere else in the country. So I'd like you to help lay all of that out.

My inclination is to start with the Rent Stabilization Act of 1969 Is that a good place to start?

Kenny Burgos (3:50)

I think so.

Paula Pant (3:51)

Perfect. Can you orient us on that?

Kenny Burgos (3:53)

Sure. So rent stabilization in New York City is effectively rent control. New York City did have rent control dating back to the 40s, like most of the country. So the term differs, but really in practice, it is extremely similar to any rent control system. Folks would recognize anywhere else in the nation. And it was an emergency measure implemented at that time in a response to a housing crisis. A housing crisis we still find ourselves in 50 plus years later. And so what the legislature did was basically say, for as long as New York City remains below a 5% vacancy rate, which we will study and certify every three years, rent stabilization will stay in place.