NYC's Housing, Albany's Rules
By Rebecca Webber
The housing shortage, bemoaned by candidates and the public alike
before September 11th, has fallen off the city's -- and the candidates' --
list of priorities. Advocates of affordable housing would
like to restore this issue to a place of
prominence before November's elections determine New
York State's legislators for the next two years. A
number of housing issues that will have long-term
effects for New York City -- from rent regulation to
capital investment to availability of land for
building -- will be decided in the forthcoming legislative
With vacancy rates at about 3.2 percent -- well below
the five percent threshold established for rent
regulation after World War II - rent laws will probably be
extended beyond their current expiration date of June
15, 2003. The state legislature may well make changes
to the current laws, and regulated tenants and
landlords in New York City will be held to them.
The state's 1971 Urstadt Law
made it illegal for the mayor and the City Council to
make laws regarding regulated rents that are any more
stringent than the state's decrees. While tenant
advocates call for "home rule" and the repeal of the
Urstadt Law, the state legislature appears unlikely to
give up its power.
A great ideological divide exists on the topic of rent
regulation. Supporters claim that it keeps housing
affordable for the tenants who live in the city's
million-plus regulated apartments. Detractors
complain that it skews the market and screws both
owners and unregulated tenants.
In general, the Democrat-heavy New York State Assembly supports rent
regulation while the Republican-led Senate opposes it. And in
general, tenants support rent regulation while
landlords oppose it. The battle between the opposing
sides is always bitter and it is anybody's guess what
rent laws will look like next year.
"In some form or another [rent laws] will be
extended," says Frank Ricci, director of governmental
affairs for the Rent Stabilization Association, the city's largest landlord
group, which hopes the new laws will weaken some
tenant protections, like those that cap rent increases
for 1 and 2 year leases at 2 and 4 percent
respectively this year.
"You can't cap an owner's income and not his
expenses," Ricci says. "When you do that something
suffers. Two and four percent increases may cover
owners' expenses that year but it doesn't allow owners
to make large improvements that might cost $60,000 up
front. It's like the death of a thousand cuts."
"Everyone doesn't agree that there will be a renewal,"
says Kenny Schaeffer, the vice chair for the
Metropolitan Council on Housin, a citywide
tenants' union. "People should not assume that
everything is going to be OK. In 1997 the laws were
drastically weakened and the housing crisis has
worsened. We're looking to renew the laws, and plug
up the holes that were created by Governor Pataki in
1997 and expand protections in a number of ways."
One such "hole" through which formerly rent-regulated
apartments have slipped into the free market is called
"luxury decontrol." Enacted in 1993, it allows owners
to deregulate apartments in which tenants earn over
$175,000 per year.
"We'd like to see the luxury decontrol aspect
continue," says Ricci, of the landlord group. "Why
should people making over $175,000 a year get
subsidized? People who are making six figures
shouldn't get that luxury at the expense of the
But tenant advocates see "luxury decontrol" as just
another insidious method to remove apartments from
rent regulation. After all, if income was really the
relevant variable, why isn't everyone earning less
than $175,000 protected by rent laws?
"It's divide and conquer," says Schaeffer, "by cutting off the upper middle
class. In an ideal system it wouldn't matter if the
wealthiest tenants were regulated. If rent was based
on income, it wouldn't be a problem, but it's not. A
third of New Yorkers are paying more than 40 percent
[of their income in rent,] a quarter pay more than 50
Compared to other Americans, New Yorkers do pay more
for housing. The median New Yorker pays $665 a month,
while the median American pays $581, according to data
from the 1999 American Housing Survey. Again
tight supply probably accounts for the difference.
"There are two issues that deal with affordable
housing," says New York State Assemblyman Vito Lopez, a
Democrat and chair of the Assembly housing committee.
"Everybody thinks of rent regulation, but if you don't
build additional units of housing, it's only going to
compound the issues related to rent regulation. If
magically we could get 100,000 additional units of
housing in New York City, landlords would not be
pushing for luxury decontrol. They would be trying to
entice tenants to their units rather than tenants
bidding up prices and willing to pay ridiculous
The state legislature can encourage housing
construction in a variety of ways. It could raise the
capital budget for housing from the current 200
million dollars, as the Assembly housing committee
hopes. "We need a financial commitment of 400 to 500
million dollars a year for four or five years in order
for us to address the issue of the affordable housing
crisis in New York City and New York State," says
The legislature might also address the scarcity of
land in New York City by ruling on the issue of
brownfields, mildly contaminated areas that could be
made available for the development of new housing.
High construction costs in the city also limit the
housing supply although legislators are not sure how
to mitigate that problem. "We have to evaluate all of
the fees," says Lopez. "The costs add eight to ten
thousand dollars per unit and drives the rent up."
DECISION-MAKING IN ALBANY
State officials did pass a handful of housing-related
laws this past session. They enabled debt financing
for the New York City Housing Authority, for
example, and cracked down on predatory lenders, those who offer mortgages with onerous and
untenable provisions to unsuspecting homeowners.
Still many ideas on how to expand and preserve New
York City's housing remain undecided.
"I have a longer list of what we didn't do than what
we did do," says New York State Senator Liz Krueger,
a Manhattan Democrat, and the city's ranking member of the Senate
Housing Committee. "What you won't find are new
programs, new money to expand on successful models
that support more housing, or that rehabilitate
dilapidated housing in the city." New York State was
once a national leader in the development of
successful models of middle income and lower income
housing, such as the Mitchell-Lama program. "New York
State government hasn't played an active role in
expanding housing in 30 years," she says.
State officials' legendary difficulty in reaching a
consensus has stymied many would-be housing laws and
created the "three-men-in-a-room" method of lawmaking
in Albany. The leaders of the Assembly and the Senate
meet with the governor to negotiate a bill. Then the
Assembly and Senate leaders each bring the bill to a
vote, and it is dutifully passed by members of their
party who comprise a majority. Finally, the governor
signs the bill into law.
Given this political reality, the most important
outcome of November's election will be which party
controls the Assembly and the Senate. In all
likelihood, due to the traditional strength of
incumbents as well as the districts drawn this year
that favor retaining the current balance of power, the
Senate will remain Republican-led, the Assembly headed
This, along with the difference of interest between
upstate and downstate representatives, presents a
significant challenge for those interested in finding
solutions to New York City's housing problems.
Upstate majorities can easily overrule the wishes of
the city's representatives.
"In upstate New York, no one ever talks about housing
issues because they don't have them the way we do,"
says Krueger. "When you talk about inadequate
supply in relationship to demand, lack of land to
create new housing, dilapidated housing stock, huge
numbers of people living in substandard housing --
those are concepts that are completely foreign to
almost every legislator who is not from the city of
In the upcoming election, Krueger is being challenged
by Republican Andrew S. Eristoff to represent
Manhattan's East Side and Midtown in the State Senate.
Like most of the city's would-be elected
representatives, no matter their party affiliation,
Eristoff expressed his pro-tenant proclivities when
the City's Rent Guidelines Board voted for rent
increases for rent-stabilized tenants.
"How can the Rent Guidelines Board justify these
increases when its own study shows that the landlords'
operating costs actually declined last year?,"
Eristoff said at the time. "This shows that the entire
Rent Guidelines process is little more than subjective
The best way for the city to promote bills in the
state legislature is to coordinate 'home rule
messages' from the mayor
and the City Council. When both are in agreement, their request may get a
serious hearing, but not when the lobbying is at
cross-purposes, or if, for example, the mayor remains
silent on an issue the City Council is pushing.
HOPES FOR HOUSING
When the legislature considers the expiration of rent
regulation laws next year, representatives from New
York City, which contains the vast majority of the
state's regulated housing, will again have a hard time
influencing their upstate colleagues.
The biggest challenge lies in the Senate, where leader
Joseph Bruno has made very clear his opposition to
rent regulation. In 1996, he vowed to dismantle it
entirely. The Assembly has typically been friendly to
New York City tenants, although those outraged by
certain provisions in the 1997 rent regulation laws
still hold a grudge.
"The Assembly didn't show enough backbone in 1997,"
says tenant advocate Schaeffer, referring to the last
time rent laws came up for renewal. "They basically
gave away the store. We need to find ways to make
sure that that doesn't happen again next year. They
have to know that their political futures depend on
their abilities to protect tenants next year."
Tenants will try to mobilize their numbers into a
vocal voting bloc, while landlord representatives will
make their views known through campaign contributions.
THE RACE THAT MATTERS MOST
New York City's best chance to make housing a strong
priority at the state level will come in the
gubernatorial campaign this Fall. Governors have
traditionally been able to push through major housing
laws that reflect their own goals.
The current forerunners for New York State Governor
include incumbent Republican George Pataki who will
face off against a Democratic challenger to be decided
in the primary on September 10th - probably either
Andrew Cuomo or H. Carl McCall.
Pataki has long said that affordable housing is among
his priorities. Among his housing accomplishments
as governor, he invested nearly $6 billion of state
and federal resources toward the development of new
housing opportunities and helped provide over 75,000
affordable homes for low and moderate income families.
"Let's do more to make sure that the high cost of
housing doesn't force working people in our state to
leave the neighborhoods where they grew up," he said
in his 2002 State of the State Address.
"By creating a program modeled after the existing
Build Now initiative, we will work with local
communities, labor unions and community developers to
identify and pre-permit sites for the construction of
Cuomo has a strong background in housing. In 1986 he
founded a non-profit called Housing Enterprise for the
Less Privileged (HELP). In 1991, he led New York
City's Commission on the Homeless and in 1993,
President Clinton brought him to the U.S. Department
of Housing and Urban Development, where he served as
Assistant Secretary from 1993 to 1997 and as Secretary
from 1997 to 2001.
As State Comptroller, H. Carl McCall
a commitment to affordable housing, for example,
devoting $100 million.
from the New York State Common Retirement Fund to
creating affordable housing. So far, in his
gubernatorial campaign, he has focused on other
housing issues, for example, a plan to lower property
taxes, but some housing advocates in the city have
already decided that he is their man.
Other gubernatorial candidates include Republican Louis
Wein, Democrat Jack Cheevers,
Libertarian Scott Jeffrey, and the Green
Party's Stanley Aronowitz, who calls for
100,000 new units of affordable housing for New York State.