A Closer Look at Building Operating Costs

Last June, CHPC released Inside the Rent, an online game to help educate users about the cost of new construction and the role of government intervention. The game has been a big success and CHPC is now replicating the concept to create a new game focused on preservation of existing housing. The new preservation game will dissect the costs that building owners must undergo to keep their buildings operational over the long-term.

Part of our initial research has been to delve into data made available by the Rent Guidelines Board (RGB), the agency tasked with setting rent adjustments for approximately one million rent-stabilized units. The RGB conducts a public process each year that considers staff research and testimonies from tenants, building owners, advocacy groups, and industry leaders. The RGB’s research focuses on the economic condition of the rent-stabilized housing stock including the operating and maintenance costs, the costs of financing, the housing supply, and cost of living indices. Their data and findings are all public.

CHPC took a close look at RGB’s data on operating and maintenance costs of buildings, which are reported by building owners. We wanted to see whether certain operating and maintenance costs have risen disproportionately relative to others. The chart below represents snapshots of 2006 and 2015, with line items on taxes, labor, fuel, water and sewer, light and power, maintenance, administration, insurance, and miscellaneous. The percentage bars show the share of total operating costs for each line item.

RBG graph for blog post

In both 2006 and 2015, taxes and maintenance make up over 40 percent of total costs but the items with the most variation appear to be fuel and water and sewer. Costs have generally increased for each category except for light and power, maintenance, insurance, and miscellaneous.

This data shows which expense categories have stayed more or less constant over the last decade, and which ones have increased or decreased. This can help us to look at the causes of financial or physical distress in older buildings and provides a great launching point for CHPC’s research for the forthcoming preservation game.

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