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New York’s Tenant Laws Are In Peril

Steven Wishnia Jan 27

For those seeking to stitch the gashes in New York’s rent-regulation laws and stop the hemorrhage of affordable housing, the odds are long, but the job needs to be done by June.

The state’s rent-stabilization laws, the keystone of a system that protects tenants in about 1 million apartments in New York City and around 50,000 in Westchester, Nassau and Rockland counties, expire June 15. They are almost certain to be renewed, but loopholes enacted in the last 20 years have enabled landlords to take more than 300,000 apartments out of the system, often fraudulently.

Tenant groups want to close those loopholes, but the Republican majority in the state Senate, the millions of dollars the real-estate lobby has given Governor Andrew Cuomo, and the January 22 indictment of Assembly Speaker Sheldon Silver — the most powerful Democrat in the state legislature, and a leaky bulwark against weakening the rent laws — all make that a difficult prospect.

For both of the tenant-group coalitions working on the issue — the Alliance for Tenant Power and the Real Rent Reform Campaign — the top priority is repeal of the 1997 amendment that lets landlords decontrol vacant apartments if the rent can be raised to $2,500 a month or more.

That amendment has effectively created a two-tier housing system in the city, in which new arrivals face astronomical rents and no rights or security. If it’s not repealed, tenant advocates say, the supply of rent-stabilized apartments will eventually erode to a handful occupied by elderly and poor residents. Merely raising the threshold for deregulation — in 2011, the last time the laws were renewed, it was increased from $2,000 to $2,500 — would be as inadequate as putting a Band-Aid on a ruptured aorta, they say.

Other measures they advocate include repealing the 1997 amendment that lets landlords charge an automatic 20 percent increase on vacant apartments, making rent increases for major capital improvements temporary surcharges instead of permanent and strengthening the very minimal oversight of rent increases landlords claim for apartment renovations.

Both coalitions, however, have decided that they won’t push this year for another key goal of the tenant movement — repealing the 1971 state law that denies New York City the power to strengthen its rent laws without permission from Albany. With the Republican majority in the Senate, they believe, it’s simply not politically possible. Albany Republicans take millions in contributions from real estate, and do not want to close the spigot. Neither do many Democrats.

A loophole in state campaign-finance laws gives the real-estate lobby particular power. Owners of multiple limited-liability corporations are allowed to give $50,000 from each one, although the maximum for regular corporations is $5,000 — and landlords often set up separate LLCs for each property they own. Billionaire luxury-apartment landlord Leonard Litwin has utilized this loophole to donate more than $2 million to Republican Senate candidates over the last five years and more than $1 million to Cuomo. He also allegedly channeled under-the-table money to Sheldon Silver: His property-management company hired a law firm accused of giving Silver kickbacks.

Although it would be essentially impossible to win a straight yes-or-no vote in the Senate to strengthen rent regulations — or even bring such a bill to the floor — there are other possibilities. One would be for Cuomo to put the measure into the state budget, where it could only be defeated by blocking the entire package. On the other hand, the governor did not mention rent regulation at all in his State of the State speech on January 21, and taking on teachers’ unions seems to be a higher priority for him.

The Democratic-majority Assembly could also refuse to renew two important real-estate tax breaks, the 421-a and J-51 programs, unless the Senate accepted strengthening rent stabilization. This would require more resolve than they’ve shown in the past.

Sheldon Silver has been the main obstacle in Albany to rent regulations being obliterated during his two decades as speaker — in 1997, then-Senate Republican leader Joseph Bruno sought to repeal rent controls outright, and Governor George Pataki wanted them to die more slowly — but he has let a lot go through. In 1997, he basically sold out, accepting vacancy deregulation and other changes. In 2003, he got outsmarted, as Bruno slipped weakening amendments in at the last minute. In 2011, he won a few token improvements.

In 2013, when the J-51 program was expiring, Silver failed to use that as leverage for stronger rent laws. He apparently was also the one who sneaked in an amendment giving special 421-a tax exemptions — intended as incentives for affordable-housing construction — for five Manhattan luxury buildings, including one with a $90 million penthouse.

As The Indypendent went to press, Silver’s announcement on January 25 that he would temporarily step back as Speaker while charges are pending leaves a leadership vacuum in the Assembly. The five members taking over his functions might take a strong stand on rent regulations — or might be more scared of alienating the real-estate lobby or vexing Cuomo. They might also lack the clout, unity or negotiating skills to sustain a fight on the issue.

For information on organizing, contact Yonah Lieberman at Met Council, 212-979-6238 or yonah@metcouncilonhousing.org.

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