Gotham Gazette http://www.gothamgazette.com/component/tags/tag/1503 Tue, 24 Oct 2017 02:02:39 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) Language in Rushed Rent Regulations May Hold Tenant-Friendly Surprise http://www.gothamgazette.com/?id=5808:language-in-rushed-rent-regulations-may-hold-tenant-friendly-surprise-cuomo-albany http://www.gothamgazette.com/?id=5808:language-in-rushed-rent-regulations-may-hold-tenant-friendly-surprise-cuomo-albany Cuomo Heastie rent

Cuomo and Heastie in cahoots? (photo: Governor's Office via flickr) 


Tenant advocates disappointed by the rent laws deal reached by Gov. Andrew Cuomo and the Legislature at the end of session suddenly have a spark of hope, weeks after the backroom negotiations came to an end. Some are interpreting the wording of the new law to actually make it more difficult for landlords to deregulate apartments when rent reaches the established threshold, much to the chagrin of those property owners.

Tenant advocates say the new language of the bill - which regulates about a million affordable apartments in New York City - mandates that landlords have rented an apartment under the $2,700 per month threshold before they can remove it from the rent control rolls. This is as opposed to being able to deregulate the unit once an allowable hike hits $2,700 per month even if the unit is between tenants. Advocates believe this will significantly extend the time under which apartments are rent controlled even if it does not stop their eventual expiration.

Judith Goldiner, an attorney at the Legal Aid Society, said that since 1997, the language in the statute has been, "for any housing accommodation which is or becomes vacant on or after the effective date of the [1997 law] and before the effective date of the [2011 law] with a legal regulated rent of $2,000 or more a month."

The threshold was raised to $2,500 when the rent laws were renewed in 2011.

Goldiner said the language in the 2015 act can be captured as: "any housing accommodation that becomes vacant on or after the effective date of the rent act of 2015 where such legal regulated rent was $2,700 or more." They key being that the monthly rent was already $2,700 before an apartment is vacated, meaning that the rent threshold cannot be reached between tenants due to allowable vacancy and renovation bumps.

The Rent Stabilization Association (RSA), a landlord group, is aware of the language and believes it to be a drafting mistake that the Legislature could address along with a host of other drafting errors in the "Big Ugly" that was rushed to a vote on June 25 after session went into week-long overtime. But, it is unclear if the Legislature has any interest in returning to deal with the language. Sources in the Assembly say the language in question was inserted intentionally and they would not consider altering it.

Cuomo administration officials indicate they did not think the language was an issue. Tenant advocates wonder if Cuomo would dare alter the bill even if it was unintentional given that his allegiance to Democratic ideals has been under so much scrutiny of late. The governor recently felt backlash from the left after Senate Republicans touted a memorandum of understanding signed by his aide that appeared to agree to roll back a part of his signature gun-regulation SAFE Act. Not to mention attacks on Cuomo over elements seen as lacking (mayoral control of schools) or missing (minimum wage hike) from the final deal.

"Our interpretation is a tenant has to be in place under that threshold before they could move to deregulate," said Goldiner of the Legal-Aid Society. Goldiner said this specific measure was something she and her colleagues advocated for at great lengths. "I don't think this was unintended," Goldiner told Gotham Gazette. "We were in many, many meetings with the Assembly telling them how this would stem the tide of deregulation. And in a bill where tenants got very little, I think this is fairly appropriate."

Advocates still say that while the apartments would remain regulated, $2,700 per month is still a high rent and this tweak is not a game changer of any kind. Landlord groups are dismissing the language as a drafting mistake.

"I think the fact of the matter is when you read the section of the law on legal regulated rent it has not changed at all," said Frank Ricci of the RSA. "The bill in its entirety did so much on so many things that there are drafting inconsistencies throughout the bill. It is not pristine and clean as it has been in past years."

Lawyers for both sides are currently being consulted on the language and interested parties admit the debate could end up being settled in court.

The dispute over the language adds a twist to an especially heated year for the real estate industry and tenant advocates, including many New York City-based legislators.

Many lawmakers who represent parts of the city and advocates regard the changes made to the rent laws this year as minor tweaks that will only make it slightly more difficult for landlords to take apartments off the regulated rolls. The Legislature renewed the rent laws for four years and the law increases the threshold for vacancy deregulation and high-income deregulation from $2,500 to $2,700. Those thresholds will then be updated on January 1 of each year according to decisions by the city and suburban Rent Guidelines Boards. The amount landlords can increase monthly rent based on the improvements they make to apartments has also been reduced slightly and fines for tenant harassment have been increased.

Sen. Adriano Espaillat, a Manhattan Democrat, called the changes "one inch forward," and added: "We saw some tougher penalties but there were no major victories, we are still going to lose thousands of affordable apartments over the next four years."

Michael McKee of Tenants PAC agrees. He points to a study by Tom Waters of the Community Service Society that predicts the city alone stands to lose 87,500 rent regulated apartments given the $2,700 per month threshold.

Frank Ricci, of the Rent Stabilization Association, said that the new laws will make it much harder for landlords to afford maintenance and repairs. "These changes are going to make it much more difficult to maintain buildings. The Major Capital Improvements changes are going to disincentivize owners from making major improvements or doing major work like fixing the boiler."

Advocates point to reports from Waters and analysis from blogger John Krauss that show the city has consistently seen thousands of apartments leave the affordable housing rolls despite increases in the deregulation threshold made in 2011. http://blog.johnkrauss.com/where-is-decontrol/

"We've said for 22 years that raising the threshold is meaningless," said McKee. "It simply makes financial sense for landlords to spend the money [on repairs] to deregulate their apartments. The new laws do nothing to disincentivize them."

However, Espaillat and McKee say that tenants were particularly organized this year and effective in putting pressure on Cuomo and the Legislature. Advocates barraged the governor at his offices and continued their protests after the deal was passed - at one point targeting Cuomo's home in Westchester.

There may be no lull in the action as calls to strengthen the laws continue and the 2016 election year is just around the corner. On Wednesday, Brooklyn Borough President Eric Adams, a former state senator, will brief the media "about a new push to achieve some of the urgently needed protections not provided by the recently approved rent laws negotiated by Governor Andrew Cuomo and State Senate Republicans." Adams is also going to convene a meeting of state and local electeds and tenant advocates "to discuss plans moving forward."

Legislators and tenant advocates say they think the recent campaign could continue and be used as a tool to help Democrats win control of the state Senate at which point they could revisit the rent laws even before they expire. "We we were on point on organizing, on messaging, on building a coalition," Espaillat told Gotham Gazette. "If we win the majority next year we could very well address affordability." Democrats, who traditionally do better in presidential years, hope in part to ride a Hillary Clinton wave.

Ricci told Gotham Gazette that such action would create an unstable environment for landlords. "If you want a well-preserved housing stock in the city, you need consistency and predictability," said Ricci. "There is a lot of thought and planning that goes into improvements. If there is talk every year about tinkering it would create an unstable environment. In fact it would be shortsighted on the part of the Legislature to even talk about changes because it will stop people from making these large investments." 

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Language in Rushed Rent Regulations May Hold Tenant-Friendly Surprise Tue, 14 Jul 2015 21:50:09 +0000
Strategy Meetings Signal Coming Flurry of Rent Law Lobbying http://www.gothamgazette.com/?id=5707:strategy-meetings-signal-coming-flurry-of-rent-law-lobbying http://www.gothamgazette.com/?id=5707:strategy-meetings-signal-coming-flurry-of-rent-law-lobbying housing rally

A housing-related rally at City Hall (photo: @AffordabilityNY)


On Friday, tenant advocates, union representatives, and elected officials gathered in two separate meetings to discuss the renewal and strengthening of state rent laws. There is a sense of urgency among city-based legislators and tenant advocates as the laws regulating many thousands of apartments are set to expire in six weeks and legislative debate on the topic is non-existent.

One meeting took place at the United Federation of Teachers (UFT) headquarters in New York City and featured Mayor Bill de Blasio, union heads, and key electeds like Assembly Housing Committee Chair Keith Wright of Harlem. According to numerous sources the meeting was convened by 1199 SEIU, the powerful healthcare workers union, to convince organized labor to join the fight to strengthen the rent laws.

Meanwhile, another group of advocates and legislators met in Yonkers in the office of Assembly Member Shelley Mayer to discuss how to get equity between the city and suburban rent laws and how to mobilize tenants on short notice.

Many legislators and advocates worry that the meetings took place too late in the game. There's just six weeks left in legislative session and the rent laws have been the subject of few negotiations and almost no organized lobbying.

Stakeholders see this year as do or die for strengthening rent laws so that landlords can't remove apartments from rent regulation after making renovations and increasing rent. Advocates say 54,000 apartments have been taken off the roles in the past 10 years - a figure they cite as a net total. Landlords insist the current rules help them maintain apartments and keeps the housing stock from falling into complete disrepair - they do not want to see it become tougher for them to move apartments to market rate.

Meanwhile Senate Republicans are distracted by the corruption investigation into and impending charges against Majority Leader Dean Skelos, and eager to frustrate their nemesis de Blasio, who is seeking renewal of mayoral control of schools and the rent laws before both sunset in June. Tenant advocates are investing all of their hope in new Assembly Speaker Carl Heastie, Democrat of the Bronx, and are demanding he play hardball in negotiations over the renewal of the 421-A tax break that benefits developers and expires at the same time as the rent laws.

Gov. Andrew Cuomo has already downplayed the possibility of useful negotiation in the Legislature. Back from his visit to Cuba, an energized, punchy Cuomo delivered an assessment of the current rent law negotiations to a breakfast of the Association for a Better New York on April 24.

"If it was a different time in Albany, frankly, and Albany was a little bit more of a stable situation I would normally take those negotiations to Albany and try to work it out among the parties," Cuomo said of the housing-related issues. "Albany is somewhat - there's a lot going on right now. So I'm hoping and I'm asking the parties to work out the disagreements among themselves." He then suggested that the situation in Albany might be so dire that a straight extension of both programs, without any tinkering, might be necessary.

That was the last thing tenant advocates wanted to hear. "I thought it was outrageous," said Michael McKee, treasurer of Tenant's PAC. "He was proposing exactly what the real estate industry wants."

McKee was further vexed that no legislators challenged the assertion that Albany is too dysfunctional to negotiate over two essential pieces of legislation."Why was there no blowback?" asked McKee. The influence of the real estate industry in Albany is well-documented, of course.

Advocates plan on turning up the pressure in the coming weeks. Cuomo's Manhattan office will be the center of protest on Wednesday, May 6 at 11 a.m. and New York State Tenants and Neighbors will host a rally in Foley Square at 5 p.m. on May 14. A number of legislators also have tentative plans to make public pushes for strengthening the rent laws.

What do advocates want? They say the city has those 54,000 rent-controlled units over the past 20 years thanks to vacancy decontrol. Current state law allows landlords to increase rents based on improvements they make to a building or individual apartments. Some tenants find their rents increasing without any obvious fixes being made. Landlords can also increase rent by 20 percent once a rent-stabilized tenant leaves. Tenants claim this leads to abuse from landlords who want to increase rent. The Rent Stabilization Association (RSA), which represents landlords, insists that landlords make improvements that are necessary and that without them the housing stock deteriorates.

Landlords face increasing operating costs like water and sewer fees. Frank Ricci of the RSA said he praised the current laws, especially considering the challenges landlords face. "I think all those laws work very well," said Ricci. "They inject needed capital into the housing stock.

But that does not mean Ricci is happy with a lack of legislative discussion over the rent laws "There hasn't been a rational healthy debate on the issue for years. It is owners versus tenants. The Assembly gets very wrapped up in representing tenants. They aren't worried about what keeps the housing stock going."

There are differing proposals for how to improve rent control for tenants and it is unlikely any individual bill proposed in the Legislature will become the solution as a bill package will almost certainly be hashed out in secret by Cuomo and the leaders of each house. But a few of the ideas include limiting landlords' ability to increase rent after repairs so that once the repairs are paid off rent would return to a baseline. There is also talk of ending vacancy decontrol and stopping landlords from being able to increase rent by 20 percent once an apartment becomes vacant.

Renewal of the rent laws almost certainly won't happen this year without renewal of 421-A, a tax break for developers that has been under the spotlight lately in part thanks to the indictment of former Assembly Speaker Sheldon Silver, who allegedly used his leverage over the breaks to push developers to hire a law firm which in turn gave him kickbacks. There are also questions about whether 421-A is still necessary as an incentive to spur development in a booming city.

But, the tax break is designed to incentivize developers to include affordable housing in luxury high rises. Tenant advocates say the costs of the break far outweigh the benefit, though: the city lost $1 billion in tax revenue to the exemption in 2014 according to a study by the Municipal Art Society of New York. Advocates estimate that fewer than 16,000 families benefited from the creation of affordable housing under 421-A last year. Some legislators have proposed replacing the program with a housing voucher system so that families would directly benefit.

It is dubious to think that Senate Republicans will let 421-A go when the real estate board, also known as REBNY, and developers are their single largest campaign donors and Senate Republicans don't have a very large wish list for the end of year. Governor Cuomo is also a very large beneficiary of the real estate industry, as are many other Democrats.

Further, some in the real estate industry insist that de Blasio needs 421-A to implement his ambitious city affordable housing plan because he is relying on real estate powers to implement it. His plan calls for the creation over the next decade of 80,000 affordable units, the preservation of 120,000 affordable units, and the development of 160,000 market-rate units.The mayor's office did not issue any details of Friday's meeting and did not respond to request for comment in time for publication.

Activists and legislators say the mayor should simply get behind a new plan that relies on a program replacing 421-A, but with the rent laws expiring in June and Senate Republicans running down the clock it appears unlikely that 421-A is going anywhere.

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Strategy Meetings Signal Coming Flurry of Rent Law Lobbying Sat, 02 May 2015 13:41:31 +0000