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The New Governor's Mystery Agenda

The new governor is a mystery when it comes to housing. No one is sure what he will do about the housing issues in New York City.

In his inaugural address, Governor Eliot Spitzer was brief in his remarks on housing.

“In New York, we face the twin challenges of high home prices downstate and deteriorating housing stock upstate,” Spitzer said. He then pledged to do an inventory of public land that could be used for new housing development, look for partnerships to build employer-assisted housing and reward communities that reform their zoning laws to encourage affordable housing construction.

What few decisions Spitzer has made in recent weeks seem to have swung both ways: He upset some housing advocates when he let a big landlord off the hook with a slap on the wrist in one of his last acts as Attorney General. But many advocates were encouraged by one of his first acts as governor: He nixed the implementation of new rules, which many saw as pro-landlord, proposed during the tenure of Spitzer’s predecessor George Pataki by the state’s Division of Housing and Community Renewal.

“Pataki tried to undermine the rent laws even further than he already has,” explained Brad Lander of the Pratt Institute for Community Development. “Some of us on [Spitzer’s housing] transition committee urged the Spitzer administration to find a way to undo those things….

“You couldn’t have had a better first day. That was of enormous significance to tenants in New York City.”

Among other things, the new rules would have allowed landlords to charge two months rent as security deposit and made the removal of lead paint a cost that landlords could pass along to tenants in rent increases.

Nevertheless, Spitzer’s housing agenda is still murky. And housing advocates are hardly the only people perplexed at his goals.

“He only put out one press release about housing as far as I know” during his campaign, said Frank Ricci of the Rent Stabilization Association, the group that lobbies on behalf of thousands of property owners in New York City. “I think it’s wait and see.”

Spitzer’s agenda will become clearer in coming weeks with some important decisions:

  • He will appoint a new housing commissioner and that person will set the tone at the state’s housing agency
  • He will craft a budget with the Legislature and it will reflect priorities.
  • He will be lobbied to save the New York City Housing Authority, which is sinking into a fiscal crisis.

What Is On His Mind?

Spitzer did talk about housing during his campaign, even if his ideas on housing were not detailed in press releases. But what did he really say? Housing advocates heard him express lukewarm support for an administrative tribunal, or repair board, to deal with repair issues. They also heard him express some interest in raising the $2,000 rent level at which a landlord can apply to deregulate an apartment upon becoming vacant.

But Ricci said the new governor chose his words carefully. On the repair board, he said, Spitzer said “if local governments pass something like that he would look at it. I think they’re very careful about the words they use and you have to respect that.”

And on rent regulation, Spitzer said he would not change them until they come up for renewal in 2011. “And he has to win an election” before that happens, Ricci pointed out.

In an email, a spokesperson for the governor said the new administration was too immersed in developing a budget to respond to questions about his views on housing issues.

A new commissioner

Housing advocates hold a pretty dim view of the state’s housing agency, the Division of Housing and Community Renewal. Perhaps unsurprisingly, landlords are not so displeased with the agency, which, among other things, enforces the rules that govern rent regulated apartments. In New York City , rent regulated apartments make up almost half of all rentals.

“At least it works now – you get a decision,” Ricci said. “And that’s important…. I don’t know what his philosophy is on (DHCR). I would hope that he would recognize that under [former Governor Mario] Cuomo we had an 80,000-case backlog and that didn’t help tenants or landlords.”

Once Spitzer names a commissioner, the agency’s approach will come more clearly into focus: Will it seek to curtail abuses of the rent laws? Or will it seek to enact new rules for rent regulated apartments that, advocates say, will create new opportunities for landlords to get people out of their homes?

The commissioner will have some influence on the whole future of rent regulated apartments, which are disappearing at a fast rate thanks to the vacancy decontrol provisions enacted in 1997. If Spitzer does indeed wait until 2011 to review the laws – the next time the laws come up for renewal – the debate could be moot, advocates have said: There simply will not be many rent regulated apartments left.

Currently, when the rent on a rent stabilized apartment reaches $2,000, the landlord can seek to deregulate the apartment if it becomes vacant or if the household income is higher than $175,000 for two consecutive years.

“My understanding is that he is not eager to broadly open the rent laws before 2011 but this notion of indexing the rents is something he would consider now,” Lander said. The governor’s administration “doesn’t consider that to be a reopening of the rent laws.”

A Budget

The first budget Spitzer drafts – which he will deliver to legislators on January 31 – will also be revealing. A report by Lander’s office, the Pratt Center for Community Development, urged the new governor to do something about the housing affordability crisis that is affecting communities across the state. In 1998, the report said, the fair market rent for a two-bedroom apartment in the state was $818, but by 2006 it had risen to $1,026 a month. Incomes did not keep pace.

Homelessness in New York City is at record levels while upstate landlords are abandoning properties, the report added.

Lander said he would not expect too much from Spitzer’s first budget.

“Everyone knows the first year’s budget has a lot of constraints,” he said. “The mayor’s housing plan did not emerge in his first budget. What I am hoping is we can see something that is a down payment.”

Lander hopes Spitzer will increase the funds available to finance affordable housing and “look hard” at the reserves that the state’s Housing Finance Administration and mortgage agency, Sonny Mae, have on hand. These funds could also be used to finance the construction of affordable housing, he said.

Some are also hoping the new governor helps the city address problems with its two-year-old rent subsidy program, Housing StabilityPlus. The city has been using the subsidy to help families in city shelters who have public assistance cases find permanent housing. Advocates have raised many questions about the program and a recent expose by the Daily News led State Senator Bill Perkins, a former City Councilmember, to propose legislation to cut state funding for the subsidy because of lead paint violations in some of the apartments.

Instead of cutting the subsidy, however, Spitzer could help the city by eliminating “step-downs” – drops in the subsidy payment of 20 percent per year until it expires in the fifth year. City officials have said it has urged state officials to make the change and some advocates are hoping City Hall makes the subsidy open to low-income working families who are not on public assistance.

Housing Authority Fiscal Meltdown

Spitzer’s first budget could also come to the rescue of the city’s public housing authority, the largest in the nation. Spitzer could restore state funding for the authority, which his predecessor cut in 1998.

The New York City Housing Authority is home to over 400,000 New Yorkers but has seen its budget slashed by the federal government. Last year, the city came to the authority’s rescue, contributing $120 million to cover its deficit. But this year things are even worse: the federal contribution is set to fall by another 30 percent. The authority’s deficit will be close to $150 million again.

In October, the New York City Housing Authority came up with a plan to cover the deficit, but it has outraged advocates: the agency proposed using 8,400 Section 8 vouchers to pay rents in 21 of its developments that were built with city and state money. Using vouchers to do that would effectively reduce the pool of vouchers available to low-income families that have been waiting over a decade for the federal rent subsidy.

City Council Member Rosie Mendez sharply questioned the agency’s general manager about the plan at a recent public hearing, which was overflowing with angry tenants and advocates. But she emphasized that the answer to the housing authority’s problem lie outside of the room.

“We’ve been lobbying as legislators” for the state to restore its operating subsidy, she said during a break. “We’re hopeful that finally the state will step up.”

Joe Lamport is the assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.  

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