The de Blasio administration announced last Wednesday that the city will now be able to freeze rents at the preferential level for tenants eligible for the Senior Citizen Rent Increase Exemption (SCRIE) and Disabled Rent Increase Exemption (DRIE).
“For far too long, thousands of low-income older adults and people with disabilities with preferential were unable to benefit from NYC’s Rent Freeze Programs,” said State Senator Liz Kruger, who is also the prime sponsor of preferential rent legislation. “I am extremely happy that New York State’s new rent laws finally eliminated the preferential rent loophole, making it possible for tenants with preferential rents to benefit from SCRIE and DRIE.”
The legal rent of a rent-stabilized apartment is based on the unique history of the unit and is the maximum legal rent for each apartment. Preferential rent is rent that a landlord charged to a rent-regulated tenant that is lower than the legal rent.
SCRIE and DRIE, known collectively as the NYC Rent Freeze Program, is administered by the Department of Finance and helps eligible seniors and New Yorkers with disabilities stay in affordable housing by freezing their rent. The programs are available to eligible tenants living in rent-regulated apartments. To qualify for SCRIE, residents must be at least 62 years old, the head of household on the lease, have a combined household income of $50,000 or less and spend more than one-third of their monthly household income on rent. DRIE is available to tenants who are at least 18 years old, are named on the lease, have a combined household income of $50,000 or less and must be awarded one of the following: Federal Supplemental Security Income (SSI); Federal Social Security Disability Insurance (SSDI); U.S. Department of Veterans Affairs disability pension or disability compensation; disability-related Medicaid if the applicant has received either SSI or SSDI in the past; or the United States Postal Service (USPS) disability pension or disability compensation.
Delsenia Glover, Ellen Davidson and State Senator Brad Hoylman answered questions about the rent laws. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
More than 200 tenants attended a housing forum hosted by State Senator Liz Krueger’s office on September 10 to learn more about the impacts of the rent laws that were passed in June, addressing the repeal of vacancy decontrol, preferential rents and new rules for major capital improvements.
The forum, held at CUNY’s Graduate Center on Fifth Avenue, was also attended by State Senator Brad Hoylman, State Senator Brian Kavanagh, the former Assemblymember for District 74 and currently the Chairman of Committee on Housing, Construction and Community Development for the Senate, housing advocate Delsenia Glover of Tenants and Neighbors, NYS Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas and Legal Aid attorney Ellen Davidson.
The local elected officials, experts and advocates at the forum discussed some of the major takeaways from the new rent laws that were passed, specifically regarding how they would affect rent-regulated tenants, and answered questions about housing-related issues.
Visnauskas said that the strengthened rent laws are helping to preserve affordable housing throughout the state by removing loopholes that landlords could exploit to increase rents and push apartments out of rent stabilization.
Stuyvesant Town is among the top ten neighborhoods with the most people who are eligible for a rent freeze intended for the disabled or seniors that haven’t enrolled in the programs, according to the Department of Finance.
The stats were part of a report that was released by the DOF on The Disability Rent Increase Exemption (DRIE). The report also said that as many as 155,366 households in the city may qualify for Senior Citizen Rent Increase Exemption (SCRIE) or DRIE and out of that number, 61,319 actually receive the benefit while 94,047 additional residents are not enrolled but could be eligible. The utilization rate for SCRIE is 43 percent while it’s 27 percent for DRIE. Possible reasons for not getting enrolled, the department believes, include language barriers, insufficient public communication and negative sentiment about government assistance.
Along with Stuyvesant Town, which was counted alongside Turtle Bay, other neighborhoods believed to be the most under-enrolled for SCRIE/DRIE include the Upper East Side and Upper West Side, Coney Island, Kingsbridge Heights/Moshulu, Riverdale/Kingsbridge, Throggs Neck/Co-op City, Kew Gardens/Woodhaven, Flushing/Whitestone and Highbridge/S. Concourse.
Re: “800 ST/PCV residents who qualify for SCRIE/DRIE haven’t enrolled,” T&V, Sept. 29
Despite being many months away from being eligible, I write to commend all of the people involved in publicizing the DRIE and SCRIE rent exemption programs.
But first I want to mention something that’s troublesome. The New York Observer editorialized on behalf of an option that seniors in rent stabilized multi-bedroom apartments be able to downsize to rent stabilized studios, as my grandmother did decades ago, to save chunks of rent. Having one’s rent cut in half is better than having one’s rent frozen. But that is not an option either in PCV-ST or anywhere anymore.
Last Thursday, Finance Commissioner Jacques Jiha and Council Member Dan Garodnick announced that citywide, eligible seniors and disabled tenants aren’t taking advantage of an available rent freeze, especially in Stuyvesant Town and along the East Side of Manhattan. (Photos by Sabina Mollot)
By Sabina Mollot
Last Thursday, the city rolled out what’s it’s calling East Side Rent Freeze Month, a series of events in October aimed at getting eligible New Yorkers signed up for programs that would exempt them from rent hikes, including MCIs (major capital improvements).
The reason for the push was that in Stuyvesant Town/Peter Cooper Village alone, 800 eligible tenants have yet to sign up for the programs. According to Jacques Jiha, the city’s finance commissioner, the number of eligible people citywide is 80,000, and many of them are East Siders.
“The East Side of Manhattan has the highest number of eligible participants,” said Jiha, as he stood outside Stuyvesant Town’s Community Center with local elected officials and tenants for a press conference. “During the month we’ll sign up as many eligible seniors and people with disabilities as possible.”
Members of the Stuyvesant Town-Peter Cooper Village Tenants Association participate in a pre-vote rally. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
Tenant advocates didn’t get the rent rollback they were hoping for but the Rent Guidelines Board did offer some relief with a freeze for one-year leases in their vote at Cooper Union’s Great Hall this past Monday night. Tenants signing two year leases will be getting a two-percent increase as a result of the vote.
The proposal, which Board Chair Kathleen Roberts presented after motions from both the tenant and landlord representatives failed, passed with a vote of 7-0, with the two owner representatives abstaining. The two percent increase and the freeze is the same proposal that passed at last year’s vote.
Prior to offering a proposal, owner representative Scott Walsh acknowledged the significance of the housing crisis in New York but suggested that there were other solutions, like rent credits for tenants paying more than half of their income in rent and the expansion of rent subsidy programs.
Walsh got the approval of the crowd, rare for an owner representative on the board, at the suggestion of increasing the income threshold on SCRIE and DRIE to $72,000 for two-person households and $63,000 for one-person households, but he was drowned out again by the yelling of protesters when he ultimately offered a proposal to increase one-year leases by three percent and two-year leases by five percent.
“This attempts to balance the needs of landlords and tenants,” he said. “Rent stabilization is not an official affordable housing program. Owners still need to account for costs.”
Some of the attendees at Monday’s workshop go over literature on the rent freeze program. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
Despite increased eligibility for the rent freeze program for seniors and the disabled, many tenants in Stuyvesant Town/Peter Cooper Village who could qualify for the break are not signing up for it.
“Only 25 percent of Stuy Town and Peter Cooper residents who are eligible are enrolled,” said State Senator Brad Hoylman. “It’s owed to these residents that we help them register.”
In order to spread the word about the program, which seniors and disabled people with up to $50,000 in household income could qualify for if one third of their incomes go to rent, Hoylman and Assemblyman Brian Kavanagh held a workshop on Monday in Stuyvesant Town.
The workshop on Senior Citizen Rent Increase Exemption (SCRIE) and Disability Rent Increase Exemption (DRIE) took place at the complex’s Community Center.
Council Member Helen Rosenthal at an anti-Airbnb rally earlier this year
By Sabina Mollot
Last week, thousands of tenants enrolled in SCRIE/DRIE rent increase subsidy programs learned that their benefits may end up getting reduced or eliminated altogether. The notification came by way of letters from the Department of Finance to around 5,700 people.
The programs subsidize rent increases that are faced by seniors and disabled people, respectively, who are making under $50,000 and whose rent takes up a third of their incomes.
The benefits however could expire when they attempt to renew them, according to Upper West Side City Council Member Helen Rosenthal who said last week she was approached by numerous concerned tenants who didn’t know what the letters they’d received meant.
Those letters have since been blasted by Rosenthal as being full of “technical jargon” with little detail, and she and a few other Council members have called on the Department of Finance to rescind them and not send any more until January, 2016. A moratorium, she explained, would give tenants time to plan for any changes.
Additionally, “We’re trying to understand what it means as well,” said Rosenthal of herself and her Council colleagues.
When she asked the Department of Finance why they were sent, she said she was told that previously there hadn’t been a mechanism to track whether or not recipients’ incomes were in fact one third of their rent, and now there is.
With many people enrolled in both programs living on fixed incomes, Rosenthal called the potential hikes, which she said on average would be $86, significant.
Re: “Feeling helpless over neighbor’s noise,” T&V letter, Feb. 26
Mr. Weiner writes, “I didn’t call up security because I heard from other people they don’t do much or were told not to.” Since he has lived here for over 20 years, he should have known to seek help from our wonderful Public Safety department. These hard-working men and women are doing their best to keep everyone happy, not an easy task. We should support them and respect their efforts by trusting that they will do everything that can to keep this place safe and peaceful. They are responsible for enforcing management’s rules for maintaining a high quality of life here in our community, including management’s noise policy.
If your neighbors are not as considerate as they should be, don’t hesitate to call upon Public Safety to come to the rescue. They are here to protect us, not only from thieves, muggers and thugs, but also from each other. They have and they will. Call them.
Assemblyman Brian Kavanagh held a press conference about the DRIE income limit increase on July 24, just moments before the City Council gave its blessing to the increase. Kavanagh is pictured with Manhattan Borough President Gale Brewer, Public Advocate Letitia James, Ellen Davidson of Legal Aid and Council Member Helel Rosenthal
A workshop on recent expansion of eligibility for the programs SCRIE and DRIE (income caps for both programs have been raised significantly in both cases to $50,000) will be held at the Stuyvesant Town Community Center on Tuesday, August 12.
State Senators Brad Hoylman and Liz Kruger, Assembly Member Brian Kavanagh and Council Members Rosie Mendez and Dan Garodnick will be co-hosting the event, which is aimed at helping senior and disabled constituents apply for SCRIE and DRIE. One-on-one sessions at which eligible candidates can get personal assistance with their applications, or get their questions answered, will be held 1:30-4:30 p.m. at the community center, located at 449 East 14th Street (on the First Avenue Loop, near 16th Street).
If you are 62 and think you may be newly eligible for SCRIE (Senior Citizen Rent Increase Exemption) or are 18 or older and eligible for DRIE (Disability Rent Increase Exemption), you can learn how to apply at this event.
The SCRIE and DRIE programs provide exemptions from future rent increases and some MCIs (major capital improvements). They are now within reach of many more ST/PCV residents, due to legislation authored by Kavanagh ecently enacted at city and state levels.
If you plan to attend, call the Community Center at (212) 598-5297, so staffers will know how many to expect.
For those who can’t make it, there will be two additional informational events/registration drives.
One will be at Tompkins Square Library, 331 East 10th Street between Avenues A and B, on Monday, August 11 from 1-3 p.m.
Another will be held at Stein Senior Center, 204 East 23rd Street between 2nd and 3rd Avenues, on Tuesday, August 21 from 1-3:30 p.m.
By Maria Rocha-Buschel
The New York State Assembly passed legislation Thursday, June 19, that will allow more tenants to qualify for the Disability Rent Increase Exemption (DRIE) program. The bill, which was introduced by Assemblymember Brian Kavanagh and State Senator Diane Savino, increases the annual limit for DRIE tenants from $29,000 to $50,000.The Senate approved the legislation on Friday.
It has not yet been signed by the governor or passed by the City Council, but a spokesperson for Kavanagh said there’s no opposition expected.
DRIE is similar to Senior Citizen Rent Increase Exemption (SCRIE) program, which following a legislative effort by Kavanagh, got the same increase on its income limit earlier this year.
Kavanagh said that the increases didn’t necessarily need to be introduced separately but were because of the budget constraints of submitting both at the same time. There was an extra push to have the legislation passed before the legislature adjourned for the summer at the end of last week and the effort was a success for Kavanagh and the disability rights advocates who were calling for the increase.
The DRIE program freezes rents for residents with disabilities who are living in rent-regulated housing with low incomes and who pay one third or more of their income in rent. Landlords are compensated for difference through property tax abatements.
“DRIE helps keeps economically vulnerable New Yorkers in their homes, despite ever-rising rents,” Kavanagh said. “Increasing the income limit for DRIE, just as we did with SCRIE earlier this year, will ensure the program keeps up with New York’s economic realities. Everyone deserves an opportunity to live affordably and independently in communities they help to sustain, and we all benefit from recognizing this.”
Tenants Association attorney Tim Collins at a meeting on Saturday (Photo by Sabina Mollot)
By Sabina Mollot
On the heels of the MCI settlement between CWCapital and the ST-PCV Tenants Association, around 250 tenants attended a meeting on Saturday to learn more about what the deal meant for them.
As usual almost all in attendance at the TA meeting, held at the Simon Baruch Middle School, were seniors. A bunch came armed with questions regarding the MCIs as well as quality of life and general affordability issues. However, those with unique circumstances were herded into another room at the school where there were tables to set up to help people understand the figures on their leases and with other problems.
Meanwhile, Tim Collins, the attorney for the ST-PCV Tenants Association addressed the crowd. First, he responded to some “grumbling” the deal has gotten since for most non-“Roberts” tenants, there’s only five percent removed from their monthly payments. Collins argued that as with any settlement, “you have to make deals. You have to trade something.” “Roberts” tenants wound up getting the higher reductions or full eliminations of the monthly payments because, said Collins, “they’re already paying very high rents.”
As a result of the deal, all tenants have had the retroactive portion of their MCIs (major capital improvements) eliminated. As for the monthly or permanent portion, “Roberts” tenants paying the full legal rent get a 5 percent credit. “Roberts’ tenants paying either the maximum modified legal rent or the maximum “Roberts” preferential rent get a 50 percent credit (as determined by the class action settlement). “Roberts” tenants paying less than the modified legal rent or “Roberts” preferential rent get a credit of 100 percent.
SCRIE/DRIE tenants are also exempt from having to pay the MCIs at all.
Non-“Roberts” tenants paying the full legal rent get a 5 percent credit. Non-“Roberts” tenants paying less than the full legal rent get a credit of 100 percent. The credits are retroactive to January of this year and appear as two separate credits on tenants’ rent bill from May (one for May, one for the other four months).
While discussing the settlement, Collins tried to discourage residents from filing individual PARs (petitions for administrative review) since that could unravel the settlement for all tenants, a clause CW insisted on. Those hoping to score a better deal, warned Collins, would have less standing as individuals with the Division of Housing and Community Renewal (DHCR) than a coalition like the TA has. He also pointed out that the TA had been at work for months in the hope of getting the best possible deal.
“I think we accomplished that,” said Collins.
He also shared with tenants that the settlement almost didn’t happen, with the talks breaking down twice. He declined to explain why, but admitted he wasn’t happy about having to agree that tenants would have to give up the option to file PARs.
But in trying to see it from the owner’s side, Collins said, “They wanted there to be finality. They wanted to have peace. They don’t want to fight 500 or 1,000 PARs that disrupt the deal.”
The deal does however make exceptions for tenants who want to file a PAR in unusual circumstances, such as the room count of their apartments being incorrect, since MCI costs vary based on the number of rooms in a unit.
Collins also reminded tenants that even before the negotiations, the TA had managed to convince the DHCR to knock 23 percent off the amount then-owner Tishman Speyer asked for in 2009. The challenge that followed came about after tenants received notices of the approved MCIs last fall and Collins saw that none of his arguments made in 2012 against the improvements, such as shoddy workmanship, had been considered.
The attorney also echoed the sentiment often made by local politicians that MCIs are not just a problem for tenants in Stuy Town, but a result of a law that favors landlords by allowing them to charge in perpetuity for building improvements.
“The main problem is in Albany,” he said.
Collins’ advice: Sign a one-year lease, not two.
Collins concluded his talk by urging tenants who have lease renewals coming up before October to take a one-year lease rather than a two-year one.
The reason, said Collins, who served as the executive director/counsel for the Rent Guidelines Board from 1987-1994, is that the RGB is expected to vote for a lower increase this year than what was handed down in previous years. Even a rent freeze is possible based on the preliminary vote last week. However, the increase voted on won’t go into effect until October.
Collins added that in recent years, the board’s increases amount to “nothing less than a scandal.”
The reason, he said, is that arguments made in support of owners involved projected operating cost increases that were much higher than what they actually turned out to be. At the same time, household incomes were dropping. Collins admitted that when he worked for the board, he took a somewhat hands-off approach, telling its members, “It’s not your job to make every apartment affordable or every building profitable for owners.” But over time, he started to feel like landlords were being given too much and advised the board to implement a rent freeze.
“This year I’m asking for a rollback,” he added.
Following his comments, TA President John Marsh chimed in to say Collins was speaking for himself and not on behalf of the TA, since what kind of lease to sign is always a gamble.
Council Member Dan Garodnick also spoke about the RGB, to recommend that tenants to participate in this year’s vote process by speaking at public hearings about their MCIs. With a new chair and new mayor, Garodnick pointed out that tenants have a better shot at swaying the board this year than they’ve had in the last 20 years. “I would encourage you to make your voices heard,” he said. “It’s quite an opportunity for tenants in this city.”
(Editor’s note: In a recent editorial, T&V also recommended that tenants tell the RGB about their MCIs, in the hope that hearing about unexpected increases tenants are made to pay mid-lease will have an impact on the board’s decision on the annual increase.)
The next public hearing in Manhattan takes place on June 16 at the Emigrant Savings Bank at 49-51 Chambers Street from 2-6 p.m.
ST-PCV Tenants Association President John Marsh speaking at a Tenants Association meeting on Saturday, with Assemblyman Brian Kavanagh, Comptroller Scott Stringer, State Senator Brad Hoylman and Council Member Dan Garodnick (Photo by Sabina Mollot)
Support for tenant-led purchase of ST/PCV
Another issue discussed at the meeting was the future sale of ST/PCV, with Garodnick saying a tenant-led deal has the support of the city’s housing commissioner.
Later, he told Town & Village that along with HPD (Department of Housing Preservation and Development) Commissioner Vicki Been, he’d also spoken with the deputy mayor for economic development, Alicia Glen.
“My sense from them was that they wanted to find a way to be supportive of tenants in our initiative if they can,” he said.
On the other hand, CWCapital has remained unwilling to talk business.
“Not just with us but with anybody,” Garodnick said at the meeting. “We all suspect that a sale is somewhere on the horizon, but we’re not sure when.”
(Three days after the meeting, the plan to foreclose on the Stuy Town’s mezzanine was made public.)
Tenants at the meeting at Simon Baruch Middle School (Photo by Sabina Mollot)
Why tenants are pretty much doomed thanks to Albany and City Hall
As always, there was also much depressing talk about the politics governing rent laws at the event. Local elected officials took turns at the podium explaining why tenant-friendly bills never get anywhere.
State Senator Brad Hoylman reiterated a point he’s made before, saying that until there’s campaign finance reform, the State Senate, which is controlled by Republicans, will remain a place that’s more friendly to landlords than tenants. He noted that many of the Republicans get millions in campaign contributions from real estate interests and also often live in upstate districts where there are few renters. The Olean, NY-based Cathy Young, who chairs the Senate Standing Committee on Housing, Construction and Community Development, has blocked campaign finance reform from even being discussed on the Senate floor, Hoylman said. This, he explained, is why Senate members have been reduced to arguing about yogurt.
“Her district is closer to Detroit than Manhattan,” said Hoylman of Young, who’s also legislatively tried to undo “Roberts v. Tishman Speyer.” “We need to continue to fight for campaign finance reform,” Hoylman added. “It is fundamental to changing the power dynamic in Albany.”
Assemblyman Brian Kavanagh then spoke about how the state housing agency’s new Tenants Protection Unit was in danger of being de-funded by the State Senate.
Also at the meeting was Comptroller Scott Stringer who said that the mayor’s housing plan aimed at building or preserving 200,000 units of affordable housing won’t be enough to make up for the amount of affordable units that are getting lost each year. In the last 12 years,
Stringer said, “rent have skyrocketed by 75 percent,” while in the past 16 years, 400,000 apartments that rented for $1,000 or less disappeared. “Two hundred thousand (units), it’s just not enough to deal with the crisis,” Stringer said.
At a Stuyvesant Town-Peter Cooper Village Tenants Association meeting held on MCIs in November, State Senator Brad Hoylman (right) spoke to tenants about SCRIE. Pictured with Hoylman are Tenants Association attorney Tim Collins, Council Member Dan Garodnick and Assembly Member Brian Kavanagh. (Photo by Sabina Mollot)
By Sabina Mollot
Though residents of Stuyvesant Town and Peter Cooper Village were hit in recent months with a total of five MCIs (major capital improvement rent increases), individuals on SCRIE or DRIE are exempt from having to pay them. However, the Tenants Association noted this week, the exemption is not automatic and those tenants have to file for Tax Abatement Credit Applications (TACs) for each of the MCIs they’ve received.
The MCIs went into effect this month, but as of December 27, 2013, the TA said it learned that 59 percent of SCRIE/DRIE tenants in Peter Cooper Village and 77 percent of Stuy Town residents in the programs had not filed for the abatements. Additionally, some of those tenants only filed one application. There are currently between 250 and 300 tenants using SCRIE (senior citizen rent increase exemption) and DRIE (disability rent increase exemption). The programs keep rent-stabilized or rent-controlled residents earning under a certain amount paying the rents they paid when they first signed their leases. This is actually one rent increase behind what they would have paid when signing the lease if not in the program, according to a rep for State Senator Brad Holman. For SCRIE, participants have to be 62 or older and have a household income of no more than $29,000 in the previous calendar year. Additionally, one third of that income must be spent on rent. For DRIE, that amount is $29,484 for a household income in the previous calendar year, $20,412 for single member household in the previous calendar year. One third of the participant’s income must go to rent and the person must be a recipient of government disability benefits.
In an official statement, the TA said it is currently working with CWCapital and CompassRock to make sure SCRIE and DRIE tenants will be covered by the TACS.
But, the Association warned, until tenants file properly, they will have to pay the MCIs. Hoylman, who spoke about the tax abatements at a recent Tenants Association meeting, has also been working with the TA, other local elected officials and the New York City Department of Finance to help tenants file.
“These MCI charges are an unfair burden on the ST-PCV community,” said Hoylman. “My office is reaching out to CWCapital encouraging them to preemptively file applications for adjustment on behalf of all SCRIE and DRIE recipients, who are some of the community’s most vulnerable residents.” At the meeting in November, Hoylman also noted that tenants, if not yet participating in SCRIE or DRIE, would have 90 days to apply within an MCI being issued in order for that MCI to be covered.
This week, Susan Steinberg, chair of the TA, noted that there’s been a lot of confusion among tenants, SCRIE/DRIE and others, when it comes to the MCIs, which the TA has been trying to fight.
“MCIs are definitely a confusing issue, even to those of us who have lived with them for decades,” said Steinberg. She said the TA has gotten about 50 calls and emails on the subject since the January rent bills went out.
Last month, the TA started meeting with CWCapital and the state housing agency in the hopes of reaching some sort of settlement. This is after objecting to an earlier proposal by CW to tenants to reduce the amount of tenants’ retroactive payments in exchange for not joining the TA in its pledge to challenge to the MCIs altogether. Those talks took a break for the holidays, but the effort is still ongoing.
It was in recent months that tenants got MCIs for work done by Tishman Speyer in 2009 on security upgrades, water valves and tanks, doors and resurfacing. There are two MCIs for Peter Cooper and three for Stuyvesant Town.
Meanwhile, the TA has been trying to help tenants who are DRIE/SCRIE understand their responsibilities for exemption.
“We recognize the needs of our SCRIE/DRIE population, many of whom do not have Internet access,” said John Marsh, president of the Tenants Association. “Many have called the TA about receiving MCI charges, thinking they were exempt. We are doing everything we can to assist tenants; many clearly are not aware of the filing requirements.”
According to the TA, filing can be done online as well as by mail.
Tenants can also request forms be mailed to them by calling 311 or they can pick one up at Assembly Member Brian Kavanagh’s district office, weekdays from 10 a.m.-6 p.m. at 237 First Avenue at 14th Street in Room 407. The SCRIE/DRIE program also has a walk-in office, open 8:30 a.m.-4:30 p.m. at 66 John Street, third floor.
Editor’s note: This story has been updated from its original version to add that according to Hoylman’s office, with SCRIE, a tenant’s rent is kept at what it was when signing a lease, which is what the previous rent would have been before the last legal rent increase was applied. Additionally, the word “not” was omitted in an original version when mentioning the percentage of SCRIE/DRIE tenants who’d not filed for the abatement.
TA tells tenants: Ignore CWCapital’s reduction offer,
CW says: We’re trying to avoid conflict
Tenants pack a meeting on MCIs, held at the Simon Baruch Middle School auditorium. (Photo by Sabina Mollot)
By Sabina Mollot
After residents were hit with five MCIs (major capital increases) in October for upgrade projects in Stuyvesant Town and Peter Cooper Village, management firm CompassRock made an offer to try and reduce the retroactive portions of those increases — an offer that the Tenants Association swiftly responded to, to suggest that neighbors ignore it.
The MCIs were discussed by the Tenants Association’s attorney Tim Collins at a meeting held on Saturday at the Simon Baruch Middle School auditorium.
This meeting, which was attended by around 500 people, took place a day after tenants received a letter from CompassRock, which mentioned that management hoped to work with tenants to lower the amount of retroactive charges in the MCIs “in order to mitigate the impact of this component for our longer term residents.” It also mentioned that some residents — those whose legal rent is higher than their preferential rent (what they actually pay) — shouldn’t see any increases at all.
However, the letter, which was unsigned, then went on to warn tenants that though they have a right to challenge the MCIs, if they did, they could forget management’s offer to try and reduce the retroactive portion, and that even if tenants did appeal, the MCIs would still likely be approved.
“It is our belief based upon legal advice received that at the end of any appeal process, we will obtain all or almost all of the amounts reflected in the orders,” the note read. CompassRock then went on to say management hoped to address the issue with tenants over the next few weeks so the proper amount of rent could be issued in the December bills.
“We hope that our residents take this letter as it was intended — not as a formal legal offer, but as a gesture of our good faith and a commitment from us to mitigate the effect of these orders,” said the note.
A few residents told Town & Village they thought the letter had a threatening tone, and later, Brian Moriarty, a spokesperson for management and special servicer CWCapital issued a statement, explaining that the offer was made to avoid any conflict with the tenants.
“We intend to make public final settlement terms by the beginning of next week,” said Moriarty. “In doing so, we are seeking to mitigate the effect of the MCIs and provide residents with clarity regarding their ongoing rents. As we stated in the letter, we have received legal advice to the effect that all, or almost all, of the MCIs that have now been lawfully approved by DHCR will ultimately be granted, but perhaps after some lengthy and contentious delay. This does not seem good for the community overall, or for individual residents, and therefore we will seek to waive a meaningful amount of the retroactive charges for residents. We are confident that this gesture of good faith will be positively received by our residents. Obviously, we respect that all residents will need to see the details in order to make their judgment. We assume that the vast majority of residents understand that it is not possible to compromise while simultaneously contesting the compromise. Unfortunately, the way the rent stabilization system works, it seems that appeals from a small minority of residents could disrupt a settlement of which a significant majority of the property is in favor. We feel that it is important people know and understand this.”
But at the meeting, Council Member Dan Garodnick commented on the letter to say that he thought the offer to reduce the retroactive amounts — but not the monthly increase that would be charged in perpetuity — was only made because the monthly increase is added to tenants’ base rents. This would bulk up the property’s rent roll, which would be attractive to a potential buyer, noted Garodnick, while the retroactive charges “do nothing for that.
“While we appreciate the gesture, we may have to challenge them in any event,” Garodnick added. “CW is well aware that we have the ability (through a challenge) to tie the system up for quite some time.”
Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)
Collins also spoke about the offer to say he was confident that the MCIs would be rescinded if appealed due to the fact that his arguments on behalf of the TA on why they shouldn’t be implemented, which were made last year, weren’t even acknowledged in the responses. Previously, he referred to this as a “reversible” error.
“You should ignore that letter,” he said at the meeting, then addressing any CW employees who might be in the audience to add, “That doesn’t mean we’re ignoring it.”
He added that complaints include the TA’s belief that since some of the work benefits ST/PCV’s commercial tenants, they too should share in the cost and that in some buildings, there were “class C” violations found, which would make the owner ineligible for an MCI. There was also the issue that some apartments were being used for student housing. Another argument, specifically against the resurfacing MCI was due to the quality of the work.
“We have 40 to 50 pictures showing what a mess it was,” Collins said. “The workmanship was horrendous. So we were really surprised when these things (MCI notices) started pouring out.”
Decisions on whether to grant MCIs are made by the state housing agency, the Division of Housing and Community Renewal (DHCR) of New York State Homes and Community Renewal (HCR). The applications for the MCIs were made in 2009 by then-owner Tishman Speyer for security upgrades, including a now destroyed command center and video intercoms in Stuyvesant Town as well as (for Peter Cooper residents) work on water valves and tanks and (for Stuyvesant Town residents) resurfacing work which was bundled with charges for doors and water tanks and valves. Costs of the different MCIs vary per tenant, but all include retroactive portions to account for the time from when the work was done to when the decision to authorize the MCI was granted.
Only half jokingly, when Collins took the podium, he slammed down a pile of paperwork that was about six inches thick. Collins then told the audience that if he wasn’t confident about getting results from the HCR, he wouldn’t have shown up at the meeting. “I would not have canceled my proctologist appointment,” he said.
The attorney also asked residents to sign a pledge, which would allow the TA to represent them in a joint petition for administrative review (PAR). Collins has asked that tenants not file their own PARs, unless they have “unique circumstances,” since the TA believes a joint argument will have more strength. The TA is also preparing another document called a request for reconsideration.
On CW’s current offer to tenants, Collins said it could later cause increases for tenants whose preferential rents are lower than the legal rents, which are the maximum amounts an owner can charge.
“You have to understand how preferential rents work,” he said. “Preferential rents can be changed upon a renewal. They might say, ‘Right now you see no change, but next time we’re going to raise it.’”
He added, “I think we’re prepared to ask for more. A lot of the work was shoddy. A lot of the work was redundant.”
SCRIE, DRIE and MCI legislation
Along with Collins, other speakers at the event, which was emceed by TA Chair Susan Steinberg, included local elected officials such as Garodnick, Assembly Member Brian Kavanagh, Congress Member Carolyn Maloney, Borough President Scott Stringer and State Senator Brad Hoylman.
While at the microphone, Hoylman mentioned that there is currently some relief from MCIs for tenants who are eligible for SCRIE (Senior Citizens Rent Increase Exemption) and DRIE (Disability Rent Increase Exemption). Through those programs, tenants would be locked into the rent they paid when they first signed their lease except under extreme circumstances. To make sure an MCI would be covered, tenants would have to apply to the program within 90 days of it being issued. “But,” noted Hoylman, “it must be completed for each MCI separately.”
Kavanagh, who then discussed the state of the housing law that determines MCI policy, got some chuckles out of the audience when he mentioned that, “The MCI system is part of a larger system that was intended to protect tenants.”
However, legislation authored by Kavanagh, which seeks to end MCI payments once the cost of the improvement would be recouped by owners, has been collecting dust in Albany. He noted that the housing laws are up for expiration again in 2015 and he hoped to get the bill passed then, which would also add more oversight to the application process. At this time, the HCR has a limited ability to verify “what costs for improvements really are.”
Tenants argue against the MCIs
Following statements from local elected officials, tenants then lined up to ask questions about the MCIs, the overall theme of which seemed to be: What can be done to stop them and why is CWCapital entitled to money for work that was paid for by Tishman Speyer?
Stuyvesant Town resident Liza Sabater asks a question as other tenants line up to do the same. (Photo by Sabina Mollot)
“CW is nobody who actually spent money on the major capital extortion, I mean improvement,” griped one tenant.
In response to the latter question, Collins said that it was standard that a new owner step into the shoes of the old owner.
As for the former question, Kavanagh responded to say the answer was in restoring home rule from the state to the city, because in the state legislature, many of the politicians making decisions on city housing law live outside the city with few rent-regulated renters as constituents.
Another resident then suggested that the Tenants Association purchase shares of Walker & Dunlop, the parent company of CWCapital, so tenants could be at company board meetings. This got the attention of Garodnick, who responded, “How much are shares? I say we do it.”
When another resident asked if tenants could be socked with yet another MCI for the ongoing renovation of the storefronts on First Avenue, the answer was no, because it doesn’t benefit all tenants.
Another resident, introducing herself as Emily Juno, said she’d lived in the community for 18 months and was never notified about a pending MCI. She added that she had neighbors who’d told her the same. In response, Collins said she wouldn’t have to pay it in that case, but also cautioned her to check her lease and any riders to make sure there was no reference to an MCI.
A resident named Liza Sabater, who said she’s raising two children in Stuyvesant Town, said she had a “mundane” question, which was that she didn’t even know the amount to put on her rent check. The wording in the MCI documents made her wonder if her rent had been increased by over $1,000, but Collins said no one’s rent had gone up that high, because the monthly MCI payments are capped at six percent of whatever each tenant’s rent was in 2009.
A longtime resident, Tom Hickey, said he didn’t believe the resurfacing MCI was valid because he recalled similar work being done at the turn of the millennium. (Later, he said he filed his own objection in 2009 to the housing agency since the last resurfacing was actually done in 2003 or 2004 by Met Life.) Didn’t this, Hickey asked, mean the 2009 project occurred before the prior resurfacing had completed its useful life? Collins said he’d check to see if that information was included in his objections.
Another resident wanted to know why there was a retroactive portion if MCIs get paid on a monthly basis, anyway, to which Collins replied that, “It doesn’t make sense to me if it’s in perpetuity, but that’s the way the law works.”
Following the meeting, Steinberg said that the TA had collected around 750 signatures on its pledge for a joint challenge of the MCIs, but said the association was still looking for more and would be putting the pledge online on the TA website (stpcvta.org).