By Sabina Mollot
With just a week to go before the mayor’s Rent Guidelines Board votes on the year’s increases for roughly one million people, the city’s stabilized renters, both tenants and landlords went before the board to argue why they needed a break — in rent rollbacks or rent increases high enough to cover operating costs, respectively. The usual reasons for both were mentioned: desperate tenants citing stagnant wages while rent increases have steadily been granted until last year’s historic freeze, and owners blaming soaring real estate taxes and other factors like water/sewer fees and building maintenance.
But one thing both sides had in common was a mutual loathing for the increasingly common practice of short-term rentals.
Tenants brought up owners who flout the law to rent vacant units to tourists since it’s more lucrative than monthly rent and doubles as a form of harassment to longtime renters who’ve lost a sense of safety and community. Meanwhile, equally frustrated owners lamented how tenants live elsewhere, while paying under market rent and earning a windfall through Airbnb.
The arguments were made at the auditorium of the Cooper Union building on Monday afternoon. Tenants and landlords lined up to speak along with several elected officials at an RGB hearing.
One Manhattan tenant named Faith discussed how as her building was being renovated, with walls knocked down on one floor, the building next door was going through something similar, with apartments being vacated and then crammed with bunk beds. She called the construction, which went on for over a year, a form of harassment. “I think landlords not only don’t deserve an increase, we should get a rollback,” she said.
Another woman to speak, Joanna Wong, said her family owns two buildings in Lower Manhattan. One had 14 rent-stabilized units out of 27 while the other had 11 rent-stabilized units out of 26. “My parents and siblings work full time managing the buildings and we’re committed to providing quality living,” she said. Wong then added that a rise in “illegal transients” due to Airbnb has resulted in legal fees her family has to shell out to fight the problem.
Owner member Scott Walsh of the RGB then pressed her for more details on who was illegally renting out their apartments and Wong said it was both stabilized and free-market tenants.
“We have tried to formally educate tenants about Airbnb,” Wong said, “But Airbnb has a lot of media that misleads people that it’s legal.” In one case, she noted, the building’s attorney had to send “more formal letters. We’ve also had to go to court. We have tenants saying, ‘Who are these people coming to the apartments?’ and tenants who are complaining that we’re not letting them sub-let their apartments. But our main thing is ensuring security and safety.”
At one point, one of the board’s two tenant members, Harvey Epstein, asked her a question he asked a few other speakers, which is if she understood that rent increases added to the risk of increasing the homeless population. Wong then answered that she didn’t know. “I do acknowledge that it’s an issue,” she said. “I can only speak for my family and it’s really hard for landlords to evict tenants. You really have to have your t’s crossed and your i’s dotted.”
Bonnie Diaz, a property manager for a building on West 21st Street, said Airbnb is “the big issue we have.” In one instance, the owner hired a private detective after suspecting the activity and found that the tenant was actually “living around the corner in a high-rise, making $2,000 a week.” Yet another tenant doing this was actually in Florida, another in California, and “another was touring the world. We finally contacted him in Israel.”
Additionally, she added, it’s the owner who gets fined for this activity.
But Joanne Joemelti, an East Village resident, said landlords were just as much to blame for short-rentals.
“A lot of the landlords are mentioning illegal practices but they’re renting out spaces of roofs for cell phone towers and a lot of them are also using Airbnb for a profit,” she said.
Calling for a rollback, she also cited crumbling buildings and inflated rents that no one like herself, a book editor, can afford. “I can’t pick up the slack for real estate taxes anymore. I’m not renting my apartment on Airbnb. I’m trying to survive,” she said. She added that regulations cracking down on Airbnb “are coming. Don’t punish people who haven’t been (doing it).”
Another issue brought up at the podium was SCRIE (Senior Citizen Rent Increase Exemption). Bobbi Sackman, director of public policy for Live On NY, pointed out that only 43 percent of the people eligible for the program were using it. She called on the city to do more to promote the program and to expand it by capping seniors’ rents at one third of their incomes.
“Even though it’s expensive, it’s a reasonable request,” Sackman said.
In response, Walsh told her, “As an owner I couldn’t agree with you more about SCRIE. It’s a travesty it’s not used more.”
A few members of the board of the Stuyvesant Town-Peter Cooper Village Tenants Association also gave testimony to argue about the many legal ways stabilized rents have been climbing their way out of affordability.
Susan Steinberg, chair of the Tenants Association, argued that prior votes “favored the owner in all situations, including our great recession.” She added how even though ST/PCV is considered to be completely rent-stabilized, rents have reached market level “and beyond.” Preferential rents have also given many tenants sticker shock, she continued, when rents are suddenly “preferential no longer” upon lease renewal but what it the maximum allowed by law, with IAIs (individual apartment improvements) and vacancy bonuses also factoring into the cost. Even after the Roberts v. Tishman Speyer settlement, Steinberg said, “Tenants who are now re-regulated are paying astronomical rents, $3,500, $4,500, $5,000.”
Epstein commented that Stuyvesant Town was “a good meter” of how rents are being raised across the city.
Another ST-PCV TA board member, Anne Greenberg, called for a rollback. “In the past 10 years, my landlords have churned apartments out of affordability,” she said. “They put up fake walls and spent on entertainment events while busting unions and cutting back on maintenance. Don’t worry about the owners. Thanks to MCIs (major capital improvements) and IAIs they are doing fine.”
A few of the politicians who gave testimony, including Manhattan Borough President Gale Brewer, Congressman Jerrold Nadler, State Senator Brad Hoylman and Assemblyman Dick Gottfried, all called for a rollback in light of concern of their constituents that they won’t be able to stay in their apartments past their next lease renewal.
Gottfried added that rent increases were approved by the RGB “even during the economic downturn,” while “landlords’ income has gone up for the ninth straight year.”
Hoylman argued that one third of tenants are paying more than 50 percent of their incomes in rent, according to a recent survey conducted by the city. “They are finding it hard to save for their children’s college funds or retire or even put food on the table,” he said. “The situation hasn’t changed from last year so why would you come to a different conclusion?”
Brewer argued that “Increases have substantially outpaced owners’ costs.” She specifically asked for a rent rollback of 4 percent for tenants signing a one-year lease and 2 percent for those signing a two-year lease.
Other tenants came up to argue for rollbacks due to poorly maintained buildings and harassment while additional owners said they couldn’t afford to maintain their buildings. A couple of landlords said they also worked other jobs. However, when a few owners were asked if they’d ever filed for hardship by tenant reps, they said they had not, with one not aware that was even an option.
Jack Freund of the Rent Stabilization Association, an organization representing owners, was there to say it was hypocritical of the city’s water board to raise rates every year, because “the city wants certainty and stability” while giving tenants a rent freeze. “We need increases to continue to provide housing,” Freund said.
RGB event die-hard tenant activist Anita Rom, a senior from Riverdale, was also there, going up to the podium with the aid of a walker to ask, through song, for a rollback.
“Most of the landlords are rolling in dough, they make more money than we’ll ever know,” she sang. Addressing Board Chair Kathleen Roberts as “wonderful Kathy,” she added, “You know the rents are too damn high. We know that you will get us by.”
Her testimony prompted Roberts to quip “You don’t have a song?” when a member of a landlord group went up later to give testimony.
Another tenant to weigh in on the issue was Richard Barr, who, while, asking for a rollback, also said he sympathized with “the small landlords here who are struggling to make a profit.
“We need something other than the one-size-fits-all system, and hopefully you’ll consider trying to do something about that in the future,” Barr said.
While there was a steady stream of speakers, one tenant activist said she wondered if there would have been more if there hadn’t been confusion over where the hearing was taking place. She said the hearing had been initially scheduled to happen at the CUNY Graduate Center on 34th Street, so that’s where she went at first. When one woman asked the board chair why the event wasn’t there this year as it was last year, Roberts responded that due to the behavior of some people at the hearing, the RGB was asked not to return.
The RGB will issue its final vote on June 27 at 6:30 p.m. at the Cooper Union building, located at 7 East 7th Street.