STATE RACES
ISSUES: NYC's Housing, Albany's Rules
ABOUT EYE ON ALBANY
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 session.

RENT REGULATION

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."

LUXURY DECONTROL

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 housing stock."

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 percent."

LIMITED SUPPLY

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 Brooklyn 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 prices."

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 Lopez.

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 by Democrats.

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 New York.

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 Kabuki Theater."

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 affordable housing."

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 demonstrated 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.



Eye On Albany 2002 is a guide to the races for the 91 seats of the New York State Legislature that represent residents of New York City.

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