By former Assemblyman Steven Sanders
Let me state at the outset that I like Joseph Strasberg a lot. I have known him for something like 40 years. He used to live in Stuyvesant Town when I did. He is smart and he is savvy, and an all-around good guy. So who is Joseph Strasberg?
Joe is the long-time president of the Rent Stabilization Association (RSA). Their slogan is “we house New York.” They represent hundreds of rent regulated building owners throughout New York City. Much of Stuyvesant Town and Peter Cooper Village remain under the Rent Stabilization law. As such, thousands of tenants in our community are subject to the Rent Guidelines Board (RGB) annual determination regarding rent renewal amounts for leases expiring in any given year.
For the past two years those increases have been small, just about two percent for a two-year lease and zero percent for a one-year lease renewal. In essence for tenants who have opted for one-year lease renewals their rent has been frozen for the past two years. Good news for tenants, but is this unfair to owners? Well Strasberg and the RSA say “for sure!” In fact, as was reported in the T&V, they went to court to petition a judge to overturn the RGB’s freezing of rents. They argued it was arbitrary and capricious and challenged the independence of the board from the political influence of the mayor. Strasberg averred in his court filings that the current mayor had “corrupted” the process. Strasberg and the RSA lost.
This is a classic case of what’s good for the goose is good for the gander.
The Rent Guidelines Board is comprised of an equal number of owner and tenant representatives plus “independent” members appointed by the mayor. Before Democrat Mayor de Blasio, City Hall was controlled by Republican mayors for 20 years from 1994 through 2013. During many of those years, lease renewal increases for tenants were steep. Tenants complained that mayor’s Giuliani and Bloomberg were too cozy with real estate companies and developers and the views of the mayor’s appointees reflected the needs and wants of big real estate. Joe Strasberg and his colleagues never objected to the makeup of the RGB then, nor the fact that the appointees to the mayor tended to reflect the mayor’s views on rent increases.
However, now the shoe is on the other foot and it is pinching owners.
And with 2017, an election year for the mayor, it is likely that tenants will see the third straight rent freeze for those who opt for one-year lease renewals.
In truth over the years, both tenants and owners have had legitimate gripes with the way that rent levels were set. The RGB is to a large extent a political entity. The deciding votes are almost always cast by the mayor’s appointees. And like any other mayoral dominated agency those persons put on the board by the mayor are sensitive to the mayor’s viewpoints. This time around the mayor happens to be unabashedly pro-tenant and sympathetic to the economic plight of many residents. But owners have a point too. Their operating costs are taking a larger chunk from their profits and owning a building in New York City is not a non-profit enterprise.
For years good government groups and tenant associations have suggested that owners who feel that they are in need of more revenue to properly operate their building validate their claim by opening up their ledger books to show what their profit or loss margins are to justify a greater rent increase. Owners have never agreed to do that. Consequently they will have to suffer the results of this year’s Rent Guidelines Board decision in a couple of months.
There is a better and more precise way to set rent policies in New York City which would be fairer to all concerned. But until my friend Joe Strasburg convinces his owner clients to disclose their actual income, building owners as well as tenants are stuck with a decidedly imperfect system.