Squadron Urges Extension and Strengthening of Rent Regulations, End of Vacancy Decontrol

The Emergency Tenant Protection Act, the state statute under which residential rent regulation in New York City is authorized, expires on June 15. Governor Cuomo’s Executive Budget amendments released earlier this month do not provide for its renewal. This is a matter of concern for many Brooklyn Heights residents who rent instead of own, including tenants in the Alfred T. White Riverside Apartments on Columbia Place between Joralemon and State streets. In response, State Senator Daniel Squadron has written a letter to the Governor urging his support for extension of ETPA, as well as measures to strengthen tenant protection, including the elimination of vacancy decontrol. His letter was signed by 23 other state senators, and by 63 members of the State Assembly, including Assembly Member Joan Millman. The full text of the letter follows the jump.

Dear Governor Cuomo:

On June 15, 2011, the Emergency Tenant Protection Act (ETPA) expires. If the State does not act, millions of working and middle class New Yorkers will be at immediate risk of losing their homes. Even if the ETPA is renewed in its current form, the loss of rent-regulated units through vacancy decontrol and the reduction in the number of affordable units in Mitchell-Lama and project-based Section 8 developments will continue unabated. The abuse of the Individual Apartment Improvement (IAI), Major Capital Improvement (MCI), “vacancy bonus” and preferential rent systems, which enable landlords to levy illegitimate rent increases, will persist. If current laws are not extended and strengthened, New York City and surrounding counties will become even more economically stratified and long-time tenants will be priced out of their own neighborhoods. The younger generations of people who have historically given New York City’s five boroughs their dynamism, creativity and continuous sense of reinvention will not be able to afford to move here. The City will become a place for the very wealthy and the very poor and no longer within the grasp of those of moderate means.

While we were disappointed that the 30-day Executive Budget amendments released on March 3 did not include language extending and strengthening the ETPA, we believe that with your leadership it is still possible to accomplish this objective through the budget process. The repeal of vacancy decontrol and other reforms offered in Assembly and Senate bills A. 2674-A / S. 2783-A are essential to safeguard our stock of affordable housing. These reforms will allow the residents of rent-stabilized apartments, whose median household income is $36,000 per year, to remain in the city, and will preserve the diversity of this city—where more than half of all rent stabilized tenants are members of communities of color. We ask that you act boldly on tenants’ behalf by requiring these reforms to be a part of any budget agreement. In a difficult economic time, this issue has no fiscal implications for the State. Under your leadership, the solutions that have eluded tenants in previous years are within reach.

The primary purpose of rent regulation in New York City and the three suburban counties of Nassau, Rockland and Westchester, has been to ensure fairness and affordability in an overheated market when vacancy rates are so low that landlords are no longer subject to competitive pressure to keep rents affordable or to renew the leases of tenants who assert their contractual or legal rights during their tenancy. Rent stabilization can exist only during a housing emergency, which is defined by law as a market where the vacancy rate has fallen below 5%. Today the vacancy rate is 3%. New York City first declared an emergency in 1974. This emergency has endured throughout the years, but the crisis, which had been chronic, has become acute. Because the vacancy rate is so low, tenants have nowhere to move and no affordable
apartments to rent, and landlords are in a position to engage in price gouging and other practices that are unacceptable even in a free market economy.

Repealing vacancy decontrol must be the first step toward protecting our shrinking stock of affordable housing. The system of vacancy decontrol has served as an incentive to some landlords to harass tenants out of their apartments, has become rife with fraud and has been plagued by a complete lack of enforcement. For the 15+ years that vacancy decontrol has been in effect, many landlords have simply treated vacant apartments as deregulated, without spending
the necessary funds to reach the $2000 decontrol threshold, thereby achieving de facto decontrol. New tenants are not offered rent-regulated leases and are not given histories of apartment rents. Since the State’s rent regulation system is entirely complaint-driven, there is no enforcement unless the tenant files a complaint (and within the four-year look back period). As your representatives recently testified at a hearing of the Assembly Housing Committee, landlords are basically on an “honor system” when they choose to deregulate apartments, and that system, quite frankly, has been a boon for those landlords that choose to violate the law.

No one knows how many apartments have been illegally deregulated by dishonest landlords, but the best estimates are that more than 300,000 apartments have been lost since 1994. The ability of landlords to include MCI costs as well as unverified IAIs in the permanent base rent has enabled vacancy decontrol to proceed unchecked. Most landlords simply do not report to New York State Homes and Community Renewal (HCR) when they remove apartments from the system. While some have suggested “indexing” the $2,000 decontrol threshold to the rate of inflation or other economic indicators, it is immaterial to the concern of illegal deregulation whether the number is $2,000 per month or higher. Dishonest landlords will continue to remove apartments from regulation through the back door, knowing the odds of getting caught are about the same as winning the lottery. If we believe in the basic premises of the rent-regulation system, there is simply no reason to permit apartments to be deregulated on a piecemeal basis.

For the foregoing reasons, repealing vacancy decontrol is the central element of any bill that would genuinely strengthen the law. However, as mentioned above, there are other objectives that are also essential. We must reduce the monthly increases permitted under the MCI and IAI systems, and ensure that they are subject to proper HCR oversight and approval and only endure as long as is necessary to cover the costs of bona fide improvements. We must reduce or
eliminate “vacancy bonuses” and ensure that any such bonuses are not available for the same apartment multiple times over a short period. We must ensure that any of the 70,000 units currently in the Mitchell-Lama and Project-Based Section 8 programs will be subject to rent regulation if they are removed from these programs. We must ensure that landlords who offer a “preferential rent” that they claim is below the legal limit cannot later raise the rent beyond the percentages permitted by the Rent Guidelines Board for the duration of a tenancy. And, finally, we must not offset the benefits of the above measures by meaningfully weakening the law in other areas; this includes refraining from creating new loopholes for landlords or overriding well-reasoned judicial decisions like Roberts, Cintron, Grimm and Thornton.

In prior years, the renewal of the Emergency Tenant Protection Act has been addressed on the precipice of or immediately after these protections had been allowed to lapse. This has resulted in chaos, panic and the adoption of amendments to our housing laws that have not served the public interest. Allowing a similar outcome to occur is unacceptable and an inappropriate method of legislating an initiative that affects 2.5 million New Yorkers. As we work together to restore our constituents’ trust in State government, the inclusion of long-sought tenant protections in an on-time budget would dramatically further this objective.

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  • Gerry

    I am glad that someone is doing something to protect rent regulations.

  • NYC Renter’s Alliance for Housing Choice

    Join the fight for Housing Choice– join the NYC Renter’s Alliance for Housing choice and help end destructive and expensive Rent Regulations.

    Dan Squadron is no friend of Brooklyn Heights residents — most of us are free-market tenants or co-op or homeowners.

    ALL OF US WILL HAVE TO SUBSIDIZE THE RENT STABILIZED TENANTS.

    Even now, there are apartments in BH where the legal rent is lower than the property taxes.

    Join the fight against Rent Regulations — send an email to
    nycrenters@gmail.com

  • Giselle

    I am a Brooklyn Heights resident and rent-stabilized tenant. Rent stabilization helps millions of low and moderate-income New Yorkers afford a place to live in this expensive City. Contrary to myths propagated by the real estate industry and opponents of rent regulation, the vast majority of rent-regulated tenants are middle-class and low-income. Half of all rent-regulated households have annual incomes below $38,000, and more than one in five have incomes below the poverty line.

    The rent laws are essential to keeping millions of middle class New Yorkers housed, including those in Brooklyn Heights. They not only need to be renewed, but also strengthened.

    http://www.realrentreform.blogspot.com/

  • Buggs Bunny

    The greed just goes on. Property taxes are less for regulated buildings. No one in Brooklyn Heights is loosing anything by renewing and strengthening rent laws, except predatory owners who only care for themselves – not the city, not the community. Speculators buy regulated buildings, and then try to displace tenants for a huge profit.

  • NYC Renter’s Alliance for Housing Choice

    Actually, my LL is being forced to raise my (unregulated) rent because his property taxes go up much faster than inflation or the regulated rents.

    Basically, the rich old people are hogging all the good spots and the younger people who actually work have to fight for the scraps of what’s left.

    Time to put everyone on the same footing — if you can’t afford to live here, move!

  • Teddy

    Maybe “NYC Landlord’s Alliance for Housing Greed” would be more appropriate.

  • Buggs Bunny

    NYC alliance, you have a bad landlord. He is greedy, and you are needy. So, why don’t you move into a regulated apt? You are on the wrong side of the battle. Senator Squadron is fighting for your rights for an affordable apt too.

  • Teddy

    NYC alliance, many of the “rich”, old people who live in the Heights and nearby neighborhoods are on fixed incomes. Sure, some take advantage, but even they have contributed in one way or another to this city for decades. Where should they move? To where you came from? You want people who have lived here for decades to move, disrupting their lives, so your rent will be 200 or 300 less (if even that). Did your landlord promise you a lower rent if he can get rid of the RS tenants?

    Like Buggs said, you’re on the wrong side of the battle.

  • eg

    Ms Renter’s Alliance — You are very misinformed and do not have the whole picture of the rental situation. I am 83 yrs and have been in a rent-stabilized apt for 32 years. Yes, I am fortunate, especially since my rent is 1/3 of my income, and am just getting by on the rest.

    Not all us old geezers are rich. We never made the high salaries that young people of today may earn. Then, with either divorce or widowhood, it’s too late to catch up. If I were to leave my apt. today, my LL would raise the rent to $5000/mo, or sell it for $700K +. You would never have a chance! AND you are NOT subsidizing me in any way. My LL gets tax help and has made a lot of money when he bought the building. He made a decent profit.

    I do feel your pain because my own family faces the same problems that you do. Just get active in politics and fight for more affordable housing.

    What I see as the problem is that “one size does’nt fit all”. There may be some LL that are losing out, so the laws should be more varied to deal with different situations.

  • NYC Renter’s Alliance for Housing Choice

    Well… You can get roommates, or move to a smaller apartment. My friends are living 4 to an apartment in Bushwick each at a rent that is HIGHER than R/S tenants around here, and I’m not sure why they should have to postpone the normal rituals of life (e.g. marriage, children), so that you can live in your apartment at a rent that doesn’t even cover the maintenance and taxes.

    Perhaps the city can improve the SCRIE and DRIE programs to target those who are ACTUALLY in need, instead of giving a blanket handout to those who happened to get here first.

  • Buggs Bunny

    All rent regulated tenants pay rent increases. But the amount of the rent increase is regulated, hence, rent regulated tenants.

    The “old geezers” who are rent controlled (pre 1974) have it the worse. Under the current system, their rent goes up 7.5% every year! Plus they often have to pay for fuel increases – which the landlords can add to the rent without supplying any documentation for.

    Rent stabilized tenants (post 1974) pay lease renewal increases every time their lease is up. Usually 4 – 8% for a 1 to 2-year lease. When you start compounding the increases, it is a lot.

    Without rent regulations, the Landlord can charge anything he wants when a lease is up. He could double the rent, or just refuse to renew the lease, and throw everyone out in the street, and co-op the place.

    When you have supply and demand problems like apartments, greed goes into high gear, and the community suffers. Housing is a necessary. Even in North Korea, the most backward nation on the planet, the government provides or regulates housing for it’s citizens.

  • Buggs Bunny

    NYC alliance. Get your friends to hire a lawyer, and vent your anger at the landlords. The only ones getting a hand-out are the landlords. No one is taking anything away from you.

    Your past politicians worked for the landlords by not enforcing, and softening the laws, and they pocketed millions from them.

    Check out the Met Council for Housing. Google them, and educate yourself. You are a wage slave for your landlord. Wake up.

  • Will

    Actually, Mr. NYC Renter’s Alliance is the one who IS informed here. While the claim that LL’s get a break on their property taxes if their are members of the protected tenant-aristocracy in their buildings, this ignores the fact that the money to provide those breaks has to come from somewhere – which is higher property taxes on buildings and ultimately on those tenants who are paying their fair share plus that of their neighbors. Taxes on rental housing is outrageously high in NYC compared to single family homes and other property because the people who enact the tax laws are the same ones who write the laws that prohibit landlords from passing the consequences of their tax policies onto everyone fairly.

    Most of the low-rent people in my building are not rich . . . but that is irrelevant. If they TRUELY need housing help while they get on their feet, fine – there are plenty of government programs for that and some of them will just have to such up their pride, admit they are already getting a handout anyway, and deal with the bureaucracy of getting government help for the roof over their head. But, for a large chunk of them that would simply mean finally getting a real, full-time job instead of the part-time one they have been allowed to keep for years because the subsidy I provide them has allowed them to live in an apartment much larger than mine for a fraction of the cost and to lead a life of leisure I could only dream of. Poor on paper . . . maybe – but by choice.

    And in response to question, do I want RS or RC tenants to move in exchange for my getting to live for 200 or 300 dollars less per month, the answer is simple . . . YES. Further, I know plenty of people who would love to live here and make their contribution to the city – both fiscally and otherwise – if they could just find a place to live. If the people who only stay here because we pay them to weren’t taking up all the apartments, those contributory people could live here, and the city would be much better off.

  • NYC Renter’s Alliance for Housing Choice

    I’ve read everything (and I mean everything on Tenant.net and met council).

    I’ve looked at actual compounding of rents since 1974, and it hasn’t kept up with actual inflation, much less the inflation in costs experienced by the landlords — last year oil tripled and taxes went up by 7%, but rents only went up by 2.5%.

    The idea of rent stabilization was to STABILIZE, not SUBSIDIZE rents. When you’ve got tenants paying $700 for an elevator 1br in the heights, while the free market is charging 1800 or more, that’s simply not fair — one side isn’t paying enough in taxes.

    Frankly, my LL is on my side in this — he’s stressed out enough as it is. He can’t raise my rent much more, and there aren’t many rich people who want a high-floor walkup. He’s getting hit with the property taxes that R/S tenants aren’t paying.

  • Teddy

    A lot of R/S tenants already live in apartments most people would call small. As for roomates, when you get older, you have less tolerance for the crap that many roomates bring with them. You seem to have a condition called “LRE” – Low Rent Envy. The cure might be to follow your own advice which is to move to an area with more affordable housing options.

  • Buggs Bunny

    NYC – was your building built before 1974? Does it have more than 6 apartments? If so, you should ask the HCR, formally DHCR for a rent history of your apt. You are probably being overcharged on your rent, as well as your friends in Bushwick. It also sounds like you have the Stockholm syndrone, where you start to side with your capturer.

    And for the others, maybe they should contact the City Department of Finance about their property taxes. I have never met a rich person who didn’t have enough money. And yes, if everyone paid market rate rent, you wouldn’t have any workers at Rite-Aid, or MacDonalds. Even if they ganged-up 20 to an apartment, they couldn’t afford the rent.

  • Will

    Bugs Bunny is holding up North Korea as a model for housing policy, thus confirming what I suspected all along . . . Bugs does not understand anything about economics, housing, property, efficiency, fairness, or probably even democracy or tolerance or human rights. It is not right for the government to take one person’s property and give it to someone else.

    Teddy – you read my mind. People who want low rents can find apartments with low rents in low-rent neighborhoods. So, all the RS and RC tenants who don’t want to pay the cost of living where they do should move there . . . just like you suggested.

  • Buggs Bunny

    Will – the North Korea reference just shows that the worst country on earth (human rights) at least understands the necessity for housing. The rest of the crap you posted is baseless.

    Are you familiar with the Atlantic Yards Delevopment? Want to talk about the right of government to take someone’s property away?

    With the help of former Governor Gerorge Elmer Pataki, and current illegal 3-term Mayor Mike Bloomberg, Bruce Ratner took property from the lawful owners in the Atlantic Yards area and took 300 million dollars in tax payer money and then gave it all away to a Russian citizen to run a private basketball team. I believe I read that George Pataki and Bruce Ratner were college roommates.

    Wise up, Will.

  • nabeguy

    NYC Renter, I’ve encountered some turds on this site but you are the Mt. Everest of the bunch. “You can get roommates, or move to a smaller apartment. Basically, the rich old people are hogging all the good spots and the younger people who actually work have to fight for the scraps of what’s left” You self entitled POS. As eg (at 83 years old) points out, those “rich old people” that you refer to are not rich. And all of them have paid their taxes according to their income, regardless of their rental conditions. I hate to invoke Godwin’s law but, in your case, it seems to fit.

  • Teddy

    Will, the option to move is a option for anyone who constantly complains about their high rents and tries to scapegoat R/S tenants for their rent woes. Thanks for twisting my words around to support your obvious jealousy of people like eg.

    nabeguy, +1

  • Giselle

    Thank you, nabeguy.

  • http://Building Jeffrey J Smith

    This exchange is…amazing

    First of all, the MAJOR REASON for the housing market as it is
    is that many many of the Heights building have been bought and sold many may times since the far more stable 1960′s

    So the builds have been “flipped” many times. The result is that the financed amount. the note, the Nut is now HUGE.

    OK now like any last guy in a ponzi the present landlord or
    the co-op board has a MOJOR problem.

    The HAVE to get the MAX rent our of each unit
    Why? because the Nut is now so huge.

    So of course the building become yuppie motels with high rents and frequent turnover.

    Remember jeff’s law # 3 IF YOU CHANGE THE (TYPE OF) PEOPLE YOU CHANGE THE CITY

    If you change the human material which is in an area you
    greatly change thenature of the most basic structure of the
    living area.

    If you try to replace say, the elderly or long term residents
    with people who can pay the greatest amount you violate
    the Heights most basic structure.

    THE HEIGHTS IS TWO THINGS: ITS A LITTLE ENGLAND AND…
    ITS A GHETTO FOR THE GIFTED.

    This is what the Heioghts has ALWAYS BEEN

    If you replace the highly culture bearing elements or the
    intellectuial stock you will distroy the Heights as one of the
    most distinguished community In the world.

    This, by the way is what happens at the end of ALL usery cycles
    an unpayable debt and a totally RUINED social structure and
    an basically unworkable society.