Memo to Albany: Renew and reform rent regulations

BY Aline Reynolds

Affordable housing and other protections available to low-income tenants Downtown and citywide might disappear, if the state rent regulation law expires in June.

State Assemblymembers representing four of the five boroughs held a hearing at 250 Broadway last Thursday, where several city housing advocacy groups and tenants testified about the importance of renewing the Emergency Tenant Protection Act, which applies to all buildings built in New York City before 1974. They are also lobbying for passage of the omnibus bill, which would make the E.T.P.A. effective in all city buildings.

Brooklyn Assembly Member and Housing Committee Chair Vito Lopez, who led the hearing, said there is a “major battle” going on between landlords seeking to deregulate the rents in their buildings, and tenants who are being driven out of their homes due to escalating rents.

Strengthening rent regulation laws is a must, according to Manhattan Legal Services, an organization based in Lower Manhattan that offers legal services for low-income Manhattan tenants. Available rent-stabilized housing is becoming more and more scarce, causing low-income residents to live in households of three or more and save on basic necessities such as food to be able to afford escalating rents.

Under the current law, owners of rent-stabilized apartments must submit documentation each year to the New York State Homes and Community Renewal agency. Tenants are entitled to lease renewals with succession rights to family members, and they can report complaints about landlord harassment, rent overcharges and poor living conditions to the agency.

If a tenant’s rent exceeds $2,000 per month, and the household income exceeds $175,000 for two consecutive years, the landlord can be granted high-rent/high-income decontrol, per state approval. The state vacancy decontrol law, meanwhile, enables landlords to permanently take vacant apartments out of rent regulation. They can also deny new, free-market tenants lease renewals their predecessors had received when that same apartment was rent-stabilized.  

Both forms of rent decontrol often cause low-income tenants to vacate their apartments, because they can’t afford to pay the higher rents. But landlords can quickly find other tenants willing to pay market rates to occupy the units, leading to a loss of affordable housing and low vacancy rates.

The state law allows cities of one million people or more that have vacancy rates of five percent or less to declare a housing emergency, allowing municipalities such as NYC to implement the E.T.P.A. According to the 2008 NYC Housing and Vacancy survey, the vacancy rate for regulated apartments in Lower Manhattan up to 14th street was one percent, plus or minus 1.2 percent. The vacancy rate for unregulated apartments was 4.7 percent, plus or minus 2.7 percent.

Community Board 1 drafted a resolution at an affordable housing task force meeting Monday evening that calls for Governor Andrew Cuomo to renew and strengthen the state’s rent stabilization laws. It also asks to enforce stabilized housing through law, rather than give owners tax reductions that “limit the life of stabilized units.”

Some vacant rental units at Independence Plaza North in Tribeca, for example, might become market-rate, since the owner’s tax benefits have expired, and the building no longer has Mitchell-Lama status, according to Karren Stamm, a Downtown attorney who represents I.P.N. tenants in court. The tenants, however, are legally disputing this claim.

The Mitchell-Lama program was founded in the 1950s to generate low and moderate-income housing in exchange for low-interest mortgage loans. Mitchell-Lama rentals built after 1973 can automatically become market-rate under the current law.

The C.B.1 resolution also encourages the stabilization of newly created rental residences, including lofts.

Stamm noted that tenants in some Lower Manhattan loft buildings could incur deregulated rents were the rent deregulation and loft laws to both expire.

“If there’s no law, people whose lofts have not been legalized will not be okay,” she said. Dwellings that have not yet been legalized for residential use are run by loft boards, which typically stabilize the rents. However, many of the buildings need to be re-filed in order to qualify for loft law protections. The law, which was renewed last summer, needs to be renewed every three years in order for loft tenants to avoid fluctuating rents and other forms of security.

The current law also provides tax incentives to building owners to convert several thousand Downtown office units into residential space.

Citywide housing advocates are fighting for the passage of the new bill, which would repeal the state vacancy decontrol law. The bill would also replace permanent rent hikes to cover the cost of renovations with temporary surcharges, and do away with the Urstadt law, which prevents cities from passing more stringent rent regulation laws than those of the state.

Owners are not required to get approval from H.C.R. to raise the rents of vacant apartments. And, though owners must submit applications for “major” capital improvements, their claims aren’t generally verified.

Owners who take apartments out of rent regulation are not penalized for failing to file the rent decontrol paperwork. Michael Skrebutenas, president of the Office of Housing Preservation at the NY State Homes and Community Renewal, refers to it as an “honor system.”

The Assembly Members and witnesses at the hearing noted that this lack of oversight permits landlords to improperly deregulate apartments. It also gives them a motive to force tenants out of their homes.

It has become easier and easier “to reach the magic number of $2,000” in monthly rent payments, according to Steven Banks, attorney-in-chief of the Legal Aid Society who testified at the hearing.

“Once a landlord empties an apartment, he can take advantage of lax oversight and opportunities in the law to significantly raise rents,” he said.

Assemblymember Linda Rosenthal of Upper Manhattan, decried the honor system. “Isn’t there a better way to ensure that the government can oversee whether that process has been carried out properly?” she asked.

Maggie Russell-Ciardi, executive director of Tenants and Neighbors, the largest tenants union in NY State, said that landlords make unnecessary renovations, inflate renovation costs or get state approval for capital improvements they never make.

With protection by the vacancy decontrol law, landlords also take advantage of the system by “[doing] everything they can think of to get tenants to vacate their apartments — from turning off the heat and hot water, to taking tenants to court on frivolous charges, to other forms of tenant harassment,” according to Russell-Ciardi. Once landlords raise the rents and deregulate the apartments, she said tenants are left without legal or other recourse to hold the owners accountable for their unlawful actions.

Tenants in unregulated apartments often stay quiet about escalating rents, she said, for fear of landlord retaliation. “They can no longer speak up about problems in their building, or try to organize without fear of the landlord raising their rent or refusing to renew their lease,” she said.

Were the E.P.T.A. to expire, elderly and disabled New Yorkers could also face eviction and homelessness, since they are only exempt from rent increases in rent-regulated apartments, according to Banks.

Some have been evicted even with E.P.T.A. protections. In Stuyvesant Town/Peter Cooper Village on the East Side, for example, Tishman Speyer, who bought the property from MetLife in 2006, displaced many poor and elderly rent-stabilized tenants by exploiting legal loopholes in the current laws.

“The landlord used the current, weakened rent laws to bring eviction proceedings based on slender reeds of ‘evidence,’” according to Steven Newmark, a member of the board of directors of the Stuyvesant Town/Peter Cooper Village Tenants Association.

In a written statement, Assembly Speaker Sheldon Silver reinstated his commitment to ensuring the Assembly’s passage of the law, which, he said, will help protect working families from being “priced out of their homes and communities.”

Alleviating the pressure on families struggling with housing costs, he said, is a top priority for him. “Without rent regulation to prevent rapidly rising housing costs, only the wealthy will be able to afford to live in New York City.”

Assemblymember Brian Kavanagh, a member of the Housing Committee, said that sustaining and strengthening the rent regulation laws is a crucial part of maintaining a society that values the working- and middle-classes.

“We’ve seen the destruction large landlords and real estate speculators cause when they are allowed to treat the basic necessity of housing as a commodity to be bought and sold at whatever price they can extract from tenants in one of America’s tightest markets,” he said.

Lopez pointed out that, while he and his fellow Assemblymembers in favor of the law can fast-track it through the Assembly, securing the bill’s passage through the Republican-dominated Senate might prove difficult.

Stamm said that we might be seeing more housing decisions made by the State Court of Appeals about tenant-landlord cases, such as the Stuy-Town / Peter Cooper Village decision, that could beneficially affect broad numbers of people. “The courts have stepped in where legislative has not,” she said, “to revive the spirit of rent stabilization.”