June is always a busy month for housing. The Rent Guidelines Board’s annual deliberations culminate with a final vote on how much rents can increase on the city’s almost one million rent regulated apartments. At the same time, the mayor and City Council negotiate the city budget (although their legislative energy fades as summer vacations beckon). If that weren’t enough, the State Assembly and Senate end their legislative sessions â€“ and bills that were on hold for months, even years, suddenly win attention along with new initiatives.
And this year, as city students got their year-end grades, housing advocates produced an unflattering “report card” for Mayor Michael Bloomberg. The report by such groups as Tenants & Neighbors, Metropolitan Council on Housing and Tenants PAC said, the “student (Bloomberg) has shown disregard for low income, working and middle income renters trying to afford to live in New York City. When challenged about his behavior student acts as if he is not required to be accountable to anyone.”
The Rent Guidelines Board voted 5 to 4 to increase rents 3 percent on one-year leases and 5.75 percent on two-year leases. The hikes were not as steep as last year’s increases of 4.25 percent and 7.25 percent, and tenants appeared to win some sympathy from the five public members. (The board’s nine members include two who represent tenants, two who represent landlords and five who represent the public, although the mayor appoints all nine.) But the evening meeting, not nearly as raucous as last year’s, was most remarkable, not for the rent hike, but for an about-face by its chairperson, Marvin Markus, and his call for an overhaul of the board’s approach to setting rent increases.
Acknowledging the city’s affordable housing crisis in unusually blunt language, Markus said city and state legislators should do more about it. “We are cognizant that our decisions do have a significant impact on affordability so we must explore ways to maintain reasonable rents for poor tenants and at the same time switch the undue burden of subsidizing rents from the individual owner to the public purse,” Markus said. “I call on public officials to make significant changes so that next year at this time we can enact guidelines that truly impact the rent stabilization system in a way that allows it to be a system that maintains both the housing stock and tenant affordability.”
“The system at this point calls for a precision well beyond the powers envisioned by the lawmakers who created a very serviceable system for 1969 â€“ [but] not for today,” Markus said. Instead, he said a system that would apply an income test to residents of rent stabilized apartments would “target assistance where it is needed â€“ to both the poorest tenants and owners in New York City.”
The statements were particularly remarkable because last year Markus blocked efforts by tenant representatives on the board to pass a resolution making a similar appeal. At that time, the chair said the board’s role was not to affect public policy.
In comments during and after the hearing, other board members also criticized the one-size-fits-all approach to setting the rents. But they had mixed reactions to Markus’ comments.
Ronald Langueduc, a tenant member, said people could look at Markus’ remarks in two ways, “Either that it’s a cynical approach and simply the board not accepting responsibility for its actions, or that it’s a sincere effort to do something,” Langueduc said. “I think (the public members) did have a considerable discussion. I think there was a lot of behind-the-scenes discussions between the public members, the mayor’s office and corporate counsel.”
Larry Wood, an organizer at Goddard Riverside Community Center, was less charitable. “They’re hypocrites,” Wood said of Markus. He criticized the chair for saying last year that the board could not “do public policy” and this year saying it can.
Whatever the case, neither landlord nor tenant members were happy with the size of the increase. “It’s woefully inadequate,” said landlord representatives Steven Schleider.
Many tenant advocates blamed Bloomberg for the board’s shortcomings because he appoints the members. “We wanted to draw attention to the fact that the Rent Guidelines Board is meant to preserve affordable housing,” said Jenny Laurie of Met Council on Housing. “And it’s a failure of the mayor to protect affordable housing in this city.”
But the mayor will only go as far as larger forces push him, said one advocate who wished to remain anonymous lest his comments lead to repercussions for his organization. “If the Working Families Party and ACORN and the unions were here, we would not be seeing these kinds of results,” the advocate said. “There would be very small increases. They just do not want to make it a priority.”
ACORN, the national lobbying group for people of low income, has worked on housing issues in the city. ACORN's executive director, Bertha Lewis, denied the group was avoiding the board's hearings and said the group was focusing on more effective ways to address the affordable housing problems in the city, particularly repealing the Urstadt Law, which gave control of rent regulation to the state government, rather than city officials. "That's not true - we've mobilized troops for years," Lewis said. "That's why we are pushing for repeal of the Urstadt Law - so the city will have control of its housing laws. We need to go to the source of the problem.".
A spokesman for the Working Families Party said the party had not put a high priority on the rent board’s deliberations because it had not been called on to do so. “It’s important and â€¦ we’re willing to step up to the extent that our partners call on us to,” said Ben Healey, a spokesman for the party. But he added, “As far as we’re concerned, the city doesn’t have enough power to actually to create affordable housing. It requires intervention in the market and the rent board is just not enough.”
ALBANY â€WIPE OUT’
Meanwhile in Albany, the legislature’s actions on housing bills fell short of advocates’ expectations. “It was a wipe out,” said Michael McKee of Tenants PAC
The legislature failed to take action on two bills that would have kept rents on apartments built as part of the Mitchell-Lama program from rising to market levels. One would have let the city require that any apartment leaving Mitchell-Lama be covered by the rent stabilization laws. Another bill would use the rent charged when the apartment was still under the Mitchell Lama program as the basis for its future rent.
Some critics blamed the mayor for the failure of the measures. “He made no effort on Mitchell-Lama even though he had two bills,” McKee said. “He refuses to deal with the loss of rent-regulated housing.
A proposal to expand the Disability Rent Increase Exemption program, which aims to keep people with disabilities from losing their apartments due to rent increases, also failed. McKee said support from the mayor could have made a difference here as well.
Bloomberg’s alleged inaction on the proposals, some advocates say, reflects an apparent contradiction in his position on housing. On the one hand, he has embarked on a major program to build new affordable housing across the city. According to the Department of Housing Preservation and Development, the city has started construction on more than 57,000 affordable homes under his plan. But, at the same time, the mayor has been less interested in preserving reasonably priced homes and in working to ensure that existing apartment stay within the reach of low and middle-income New Yorkers.
“He’s paid attention to building more affordable housing â€“ he’s riding on that as though it’s the solution to New York City’s affordable housing problem,” Laurie said. “But it is not. We’re losing more affordable housing than he can build.”
THE BILLS THAT PASSED
In their typical end-of-session frenzy, the legislature did pass two significant bills.
One reforms the 421-a tax exemption program, a real-estate tax exemption designed to encourage developers to build apartments. Originally 421a applied to virtually all housing, but now, in light of the booming real-estate market, the city government, some state officials and housing advocates have sought to target it for construction of affordable housing and in certain neighborhoods. So, in some areas, dubbed “exclusion zones, developers would get the tax exemption only if they built some moderately priced apartments. The City Council's 421a reform bill expanded these exclusion zones and the State Legislature's bills expand the exclusion zones even further.
But along with that expansion, the 421a bill passed by the legislature in its final hours gave a tax exemption for luxury condominiums that would be a part of the controversial Atlantic Yards development in Brooklyn. That alone could amount to nearly a $100 million giveaway. “There are too many secret deals in it,” said State Senator Liz Krueger of Manhattan. “The bill passed in the dark of night with really very few people going over what was really in it.”
In addition, city lobbyists were not happy that it expanded the exclusion zone for developing affordable housing. Administration officials have said this could hinder development intended for middle class New Yorkers in some areas such as Queens West in Long Island City. Both the housing department and Speaker Christine Quinn have said they hope that Governor Eliot Spitzer will veto the bill unless it is change.
Another bill would allow the New York City Housing Authority to collect higher shelter allowance rates for residents who are on public assistance. Under the measure the authority would now receive the same amount of money private landlords receive. There are about 45,000 recipients of public assistance living the authority’s housing projects so the change could give the financially troubled agency an additional $70 million a year.
But that is still well short of the housing authority’s deficit, estimated at over $200 million.
The bill on the shelter allowance is “a major achievement,” Krueger said. “But NYCHA is really in a fiscal crisis. The city and state have failed them. And I don’t understand why Bloomberg didn’t help them out given the city’s huge budget surplus this year.”
Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations. Â