Tenants lose bargaining power under new state budget

State Senator Brad Hoylman (Photo by Sabina Mollot)

By Sabina Mollot

On Sunday night, when the New York State budget was passed by the Senate, landlords won an extension of the 421 tax break for new developments while tenants lost some leverage in the ongoing effort to renew and strengthen the rent laws.

The combined budget bills had totaled nearly 2,000 pages, as noted by State Senator Brad Hoylman last week. He’d voted no as a protest to being expected to review a Bible-sized stack in a matter of hours.

However, with the voting now over in the Senate as well as the Assembly, Hoylman gave Town & Village a recap.

The 421a tax break for developers, which was included in the budget, will no longer sunset at the same time as the rent negotiations. The timeline had previously been seen by tenants as an opportunity to bargain for stronger rent laws.

“The fact that the 421a real estate tax exemption was negotiated behind closed doors is scandalous,” said Hoylman, “but what is also extremely scandalous is that it was not linked to renewal of the rent laws. Albany made a colossal mistake in de-coupling the renewal of 421a with rent laws. That was a major leverage point.”

Additionally, ethics reforms, including the closure of the LLC Loophole (which allows donors to give nearly limitless campaign cash to politicians through LLCs), were not included.

“There was no mention of ethics reform in any part of the budget,” said Hoylman, “which is extremely disappointing. Not an iota. They blocked the LLC Loophole (closure), they blocked measures to limit outside income. Once again the Senate majority refused to take action. The budget process itself was dysfunctional.”

In keeping with tradition when pointing out Albany’s inequity to New York City renters and the continuing closed-door negotiation process, Hoylman blamed his chamber’s Republican majority.

Along with Hoylman, other senators to vote no to the budget included Daniel Squadron, Martin Dilan and Gustavo Rivera.

“It wasn’t our budget,” said Hoylman. “There’s an old expression. If you’re not at the table, you’re probably on the menu.”

He had some lukewarm praise for extension of the millionaire’s tax. “But,” he added, “I think the tax structure could have been more progressive.”

Other major items to come out of the budget include a raised age for criminal responsibility and school tuition aid.

In district related news, $1 million that had been budgeted for a memorial for the victims of the Orlando nightclub massacre was pulled by the Senate.

“I’m concerned…. we’re going to see a lot more luxury rentals going up and a pittance of affordable housing in them,” said Hoylman.

Asked about the Assembly’s vote, Assembly Member Brian Kavanagh said although he rejected 421a entirely in an earlier proposal, he later signed onto the budget. According to Kavanagh, this was in order to “keep government running.” Like Hoylman, Kavanagh pointed a finger at the Republicans for the add-ons that ultimately got passed.

In a written statement, Kavanagh blasted 421a as a “huge giveaway to developers that produces way too little affordable housing.”

Mike McKee of TenantsPAC (Photo by Sabina Mollot)

He added, “Many of us in the Assembly opposed including this in the state budget and rejected 421a entirely in our initial resolution in March, but the governor and the Senate Republicans saw it differently and insisted the extension be part of the budget we ultimately enacted to keep government running. While there’s much to celebrate in this budget — including $2.5 billion for construction and preservation of affordable housing — the extension of 421a will make it harder to keep New York affordable for working people.”

Following the vote, not everyone shared the view that the budget was entirely the Republicans’ fault or Governor Cuomo’s.

TenantsPAC treasurer and spokesman Mike McKee slammed the Assembly, where Democrats have a majority, saying its members are just as responsible as the Senate for the aforementioned developer giveaway.

“If the Assembly Democrats will not stand up for tenants in 2017, why is there any reason to believe they will in 2019?” he said.

McKee predicted the rent laws would be further weakened in 2019 when they’re next up for renewal. Under the terms of the new budget, 421a won’t sunset until 2022.

“As usual, it was tenants who got screwed and it was our friends that screwed us,” he added, explaining that Assembly should have stood its ground on the expiration dates.

“They could have done that but instead they traded 421a for other things they wanted that have nothing to do with tenants,” said McKee.

In previous years, McKee, who’s not one to mince words, would frequently refer to the voting process of the Rent Guidelines Board as “the annual screw.”

Asked if he now thought that title should belong to the budget negotiation process in Albany, an admittedly depressed McKee chuckled.

“We keep it in reserve for wherever we need it,” he said, also pointing out that tenants aren’t necessarily guaranteed any breaks from the RGB, despite its having issued two consecutive rent freezes.

“We won’t always have a pro-tenant mayor,” said McKee.

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