By Maria Rocha-Buschel
The Stuyvesant Town-Peter Cooper Village Tenants Association held a forum on Saturday, October 19 for residents to have their specific housing-related questions addressed by experts, local elected officials and representatives from the Division of Housing and Community Renewal.
Attorney Tim Collins, who represents the ST-PCV Tenants Association, said that tenants should be moderately concerned about the lawsuit landlords have filed to challenge the rent laws that passed over the summer.
As the New York Times reported in July, the lawsuit filed by landlords intended to completely dismantle the rent regulation system, claiming that the new laws would cripple the industry and that they violate the 14th Amendment’s due process clause, as well as the takings clause of the Fifth Amendment, which says that private property can’t be taken for public use without proper compensation.
“I am actually less concerned about the legal challenge than I am about the public relations challenge,” Collins said of the lawsuit. “I want you to understand the stakes are a very high and go way to the top, not only for New York City or the State of New York but potentially to the US Supreme Court. The real estate industry’s lawsuit says, [State Senator] Brad [Hoylman], [Councilmember] Keith [Powers], [Assemblymember] Harvey [Epstein]: You don’t matter. You don’t matter because baked within the Constitution is a trump card, which is actually two words: due process.”
Collins explained that due process was used as an argument against maximum work hour laws and minimum wage laws, when a case in 1905 made it to the Supreme Court, in which the court declared maximum hour work laws unconstitutional under the due process clause, arguing that it was an interference of free contract to limit worker hours. Collins noted that this practice ended in the late 1930s after another Supreme Court decision, with the judge who wrote the majority decision Charles Evans Hughes saying that the courts have no business trumping or up-ending the decisions of state legislators. But landlords are arguing in the lawsuit that their rights are being infringed upon by the new rent laws, Collins said.
“This case that the landlords are bringing against the legislature and the Rent Guidelines Board is, well, you’re taking our property because you’re making it less profitable than it used to be. You’re interfering with our rights to choose our own tenants and the whole system is outrageous,” he said. “I’m sure that [when Senator Hoylman was in Albany] he was thinking about the rent burdens, which now reach record levels, something like 36% of the income for each family. There were sound, deep, valid reasons for the changes, because what was happening under the old law, with preferential rent rules that allowed skyrocketing increases on renewal, with MCIs, which you’ve experience in Stuy Town, we’re battling over things that seem to be overpriced questionable charges and so on.”
Collins said that one of his main concerns is that the real estate industry has the money to make this a long and drawn out fight, and encouraged tenants to push back against information that has been manipulated to distort the new regulations.
“We have a big fight on our hands,” he said. “The real estate industry has deep pockets; they’re on the radio they’ve been on TV, they’re in the print, they’re doing the op-eds, and we need to push back to make things clear, but we also need to let the media know that tenant protection in New York is essential and that a lot of the stuff that they’re hearing is either misrepresent outright misrepresentation or a statement made in isolation without considering all of the other factors that are so important.”
Councilmember Keith Powers addressed preferential rents, explaining how tenants paying preferential rent benefit from the new rent laws. Some tenants in Stuyvesant Town and Peter Cooper Village have signed leases with what are known as “preferential rents,” meaning that the tenant and landlord have agreed on a rent lower than what the landlord could legally charge.
“One of the really impactful things for many of the residents in Stuyvesant Town, especially some of the newer tenants here, is a fix to that,” he said. “They now said that the rent you’re paying is your legal rent and all your rent increases moving forward are judged based on the rent you’re paying. No longer do you have to be at the will of your next lease renewal, if you’re thinking about where to live, if you were making decisions about your life, wondering what your next one or two-year lease renewal is going to look like. Now because of the preferential rent reform, what you are paying is now your legal rent, and you can start making some decisions moving forward.”
Powers said that some of the changes to the rent laws have positive effects for Roberts tenants because under the previous regulations, those apartments were going to be phased out of their regulation status and would no longer have rent protections. There was an arrangement before the rent laws changed which said that after a five-year period, the rents on those units would get scaled up with no more than 5% increases and could ultimately be deregulated. Powers specified that this has changed because apartments can no longer be deregulated under any circumstances, although he is still discussing the legislation with Epstein and Hoylman to determine its effects on various populations throughout the neighborhood.
Assemblymember Harvey Epstein explained that Major Capital Improvement (MCI) reform was a major component to the new rent laws, with the 6% cap being decreased to 2%. He noted that another important change is that under the new standards, DHCR will be reviewing the reasonable cost schedule to make sure that landlords are strictly limited to building-wide improvements.
“Yes, if there needs to be a new roof [there can be an MCI], but if they’re doing a kitchen, bathroom or other things, that will not be an MCI,” he said.
He also noted that any future MCIs, unlike under the old laws, will no longer be permanent, although the time restriction on any upcoming MCIs is still up to 30 years.
“Thirty years is a long time, I respect that, but I think that ensuring that these are not permanent increase was a big victory that we fought hard for this year,” he argued. “Do we want to see that retroactively? Sure. That was not achievable this year, but to be able to get future MCIs to be temporary is important.”