Assemblymember Deborah Glick, Councilmember Keith Powers, Assemblymember Harvey Epstein, Cooper Square Committee director of organizing and policy Brandon Kielbasa, State Senator Liz Krueger and Legal Aid housing attorney Ellen Davidson at the forum last week. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
Assemblymember Harvey Epstein’s office sponsored a forum on Thursday at the NYU Dental School on East 24th Street regarding the rent laws that passed in June to answer questions that tenants have about rent regulation and affordable housing protections.
State Senators Brad Hoylman and Liz Krueger, as well as Assemblymember Deborah Glick, Councilmembers Keith Powers, Carlina Rivera and Ben Kallos, were also in attendance, and Legal Aid housing attorney Ellen Davidson was available to answer questions about the complex aspects of the new laws.
“The MCI section [of the rent laws] is just like MCIs: very complicated,” Davidson said of one of the parts of the law most difficult to understand. “[The Division of Housing and Community Renewal] will have to set a schedule of reasonable costs of what can be recovered but they have to do it quickly because they can’t do any work until it’s approved.”
One of the victories that state legislators claimed in the passage of the rent laws was an annual cap on MCIs, or major capital improvements, at 2%. The previous cap was 6%. The new law also caps the amount that a landlord can pass on to tenants after a vacant apartment is renovated at $89, while also eliminating the previous 20% vacancy bonus that landlords could add after tenants moved out.
The Blackstone Group, owner of Stuyvesant Town-Peter Cooper Village along with Kips Bay Court and other properties in the city, will stop apartment renovations in Stuy Town as the firm considers the impact that the new rent regulations will have on their business.
Crain’s New York Business first noted the change earlier this month, citing a spokeswoman for Blackstone who said the company is “in the process of evaluating capital investments at Stuy Town.”
A source also noted that renovations on vacant apartments at the complex, which has more than 11,000 units, would halt, possibly in addition to larger construction projects on the property. It’s unclear if management is currently in the process of any major capital improvement (MCI) work. The source confirmed that legally-required repairs to fix leaks or hot water service will continue.
STPCV Tenants Association President Susan Steinberg said that she isn’t sure what precisely this change will mean for current tenants.
Tenants asked for, but did not receive a rent freeze, at the final vote of the Rent Guidelines Board on Tuesday night. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
The Rent Guidelines Board voted to increase rents on rent-stabilized apartments by 1.5 percent on one-year leases and 2.5 percent on two-year leases at the final vote in Cooper Union’s Great Hall on Tuesday night. Chair David Reiss put forth the proposal that ultimately passed, citing a slight increase in real estate taxes and possible impacts from the rent regulations that just passed in Albany.
Reiss noted that while the 2019 price index for operating costs and taxes went up for all owners, the ratio of expenses to revenue is “healthy” enough for owners to maintain buildings, making a larger increase unwarranted.
Tenant representative Sheila Garcia expressed the usual disappointment at the lack of a rent freeze, noting that she and fellow tenant member Leah Goodridge felt that the research from the RGB supports a rent freeze.
“I think there would be a chance (for a rent freeze) if people weren’t afraid to do what the data actually states,” she said. “The landlords cry wolf and people fell for it again. They saw the winds around the rent laws as a wind that tenants would be okay and that’s not true. They’re still going to have MCIs and there are still going to be other increases that landlords use as loopholes.”
In advance of the Tenants Association meeting covered by the recent article “Bikes still a primary concern for ST/PCV residents” (Town & Village, June 6), I consulted NYC’s Open Data concerning collisions and injuries; this data is available to anyone. I used what I found to inform my remarks at the meeting, and I was disappointed that the article didn’t mention those remarks.
The data available on that website comes from NYPD and reaches back in time as far as July 1, 2012.
I conducted two searches covering all of zip codes 10003, 10009, and 10010 from that date through the latest date for which there is data available, April 30, 2019. I found 48 instances involving one or more bikes and no other vehicles, in which instances at least one pedestrian was at least injured. (There were no fatalities, only two instances on First Avenue, and no instances on 20th Street.)
Then I completely removed bikes from the formula, leaving in other types of vehicles, and ran the same search. I found over 1,400 instances in which at least one pedestrian was at least injured. (I encourage anyone interested to check and critique the quality of my analysis. And as anyone using the site will see, there are ambiguities in the data.)
Ever since the new rent regulations — all 74 pages of them — were signed into law by Governor Andrew Cuomo on Friday, real estate attorneys have been scrambling to determine what this means for the city’s property owners.
There has been at least one published report in the Commercial Observer suggesting there could be an industry-backed lawsuit, and Blaine Schwadel of Rosenberg & Estis, a law firm representing owners and lenders, said he’s pretty sure there will be some kind of legal action taken.
This reporter was unable to determine what group, if any, was behind the rumor of a planned suit, but Schwadel said there’s at least been talk.
“I have heard that various real estate groups, RSA (Rent Stabilization Association), REBNY (Real Estate Board of New York) and CHIP (Community Housing Improvement Program) are having discussions about how to challenge it,” said Schwadel.
But, he warned, “There have been very few successful challenges to rent regulations in the past.”
Tenants in Albany on Friday (Photos courtesy of Housing Justice for All)
By Sabina Mollot
On Friday, the governor signed the most tenant-friendly package of rent regulations the state has ever seen, including the repeal of vacancy and high-income deregulation, the end of vacancy bonuses and much stricter limitations on major capital improvement (MCI) and individual apartment improvement (IAI) rent increases.
As for what this means for tenants, most notably there will be adjustments to stabilized tenants’ rent, said Assembly Member Harvey Epstein. MCIs, which previously could be no higher than six percent of a tenant’s rent, will now be no higher than two percent. They will also be eliminated after 30 years instead of being paid in perpetuity. If tenants have signed a lease with a preferential rent, that amount, when the lease is renewed, will now only be allowed to climb as high as the rent increase voted on by the Rent Guidelines Board. Previously it could have gone as high as the maximum legal rent (often a difference of hundreds of dollars).
Additionally, while this doesn’t impact current tenants, tenants moving into an apartment won’t have nearly as much to pay in IAIs, which will now be limited to $15,000 each, and only three units will be eligible over a 15-year period. The increase would also last 30 years instead of remaining permanent. Tenant blacklists will also disappear and there will also be more protections available for tenants fighting an eviction. Additionally, any conversions to co-ops or condos must be non-eviction plans. Tenants who want to file overcharge complaints will now have longer to do so, six years instead of four.
The fact that the power has shifted drastically in Albany has been missed by no one, in particular landlords, who for many years could rely on the Republican-controlled State Senate to kill any bill deemed too tenant-friendly. While it’s tempting to dismiss the ongoing preening of Albany Democrats as the usual hot air, it isn’t. Good evidence of this is that the property owners of New York City are fighting tooth and nail to defend the status quo.
To keep major capital improvement (MCI) and individual apartment improvement (IAI) rent increases, which are permanently tacked onto a tenant’s rent, they’ve sought cooperation from contractors to argue that owners will stop improving their buildings, which will hurt middle class people who need the jobs. It’s a pathetic argument, however, because if a landlord allows his or her property to deteriorate, just because they can no longer get reimbursed for the project (and earn a profit on top of that) then he or she is nothing but a slumlord. And not deserving of anyone’s pity. Certainly not any more than the renters who are made to pay in perpetuity to improve properties they don’t own.
The system that allows MCIs and IAIs has been abused for many years. A story in this week’s issue of Town & Village demonstrates just how easy it is for someone in charge of renovations to wildly inflate costs of IAIs for the purpose of deregulating units. All they have to do is be willing to fill out credible looking paperwork, send it to a housing agency too under-resourced to verify the information and employ people who don’t mind getting paid more than a renovation should actually cost. This must end.
By Council Member Keith Powers, Assembly Member Harvey Epstein and State Senator Brad Hoylman
As tenants in Stuyvesant Town and Peter Cooper Village know all too well, there’s nothing minor about a Major Capital Improvement (MCI). That’s why we’re pushing for the elimination of MCIs in Albany this June.
Almost weekly, we hear from tenants about new MCIs being added to their rent, costs that never disappear, and the unfairness of a system that transforms sometimes dubious improvements into permanent revenue streams for landlords. These costs push rents higher and only exacerbate annual rent increases.
In theory, MCIs are designed to incentivize landlords to continually keep up and improve properties with rent stabilized tenants. For example, a landlord might pay to replace a boiler or install new windows with the ability to pass a portion of the costs onto the tenants. MCIs allow owners of residential buildings to apply to New York State Homes and Community Renewal (HCR) for permanent rent increases after completing improvements or installations — not repairs — to rent regulated buildings. Part of the problem is that HCR almost always automatically approves these requests, leaving tenants bearing the burden. In fact, we have been helping the Stuyvesant Town and Peter Cooper Village Tenants Association contest 39 MCIs dating back over a decade.
This week, some residents of Stuyvesant Town received notices that the Division of Housing and Community Renewal had approved the owner’s request for hot water heater major capital improvement rent increase.
One resident shared the MCI notice on the Tenants Association’s Facebook page, which stated the increase to tenants’ rent would be $1.86 per room per month. However, MCI charges can vary slightly from building to building and this one is for the whole complex.
The ST-PCV Tenants Association had opposed this MCI, but the DHCR rejected its arguments that it would cause a financial hardship to tenants and that it was unfair because the property’s six commercial garages would also be benefitting from the upgrade. In its notice to tenants, the DHCR wrote that the garages are getting their own separate hot water systems, so they aren’t benefitting from the hot water heater (exchanger) system.
Assembly Member Harvey Epstein during a recent tenant lobbying day in Albany (Photo by Sidney Goldberg)
By Sabina Mollot
With the rent regulations set to expire on June 15, the New York State Assembly has set public hearings on May 2 and 9 to discuss a package of proposals aimed at strengthening the current laws.
Among the legislation includes a bill that would end major capital improvement (MCI) rent increases and also require the state housing agency to create a program ensuring property owners maintain a certain level of repair. MCIs are charges tacked on to a tenant’s rent to pay for improvements to the property.
“The major capital improvement rent increase program is a flawed system which has been overly complex for property owners to navigate,” said the bill’s sponsor, Assembly Member Brian Barnwell, “and has been a great disservice in our efforts to preserve the affordable housing stock.”
Another bill would end individual apartment improvements (IAI). Under the current law, landlords are allowed to raise rent after making IAIs, which can range from cosmetic repairs to redoing various rooms.
L train construction and other train related issues will be discussed on Saturday. (Photo by Sabina Mollot)
By Sabina Mollot
As was announced earlier this month, the Stuyvesant Town-Peter Cooper Village Tenants Association will be holding a meeting a number of issues on Saturday, September 29 at 2 p.m.
Tenants Association President Susan Steinberg says those who attend can expect to learn more about the following topics:
One will be the L train, specifically residents’ concerns surrounding construction, and, once the shutdown begins, transportation.
“The MTA and the DOT are being awfully vague about what their plans are,” Steinberg said. “As you reported about the L train, they talk about mitigation steps but they don’t say what they are. And I love how they said they’re not really going to be 24/7, but if they need to be, they will.”
ST-PCV Tenants Association President Susan Steinberg, pictured at the podium, discusses MCIs at a Tenants Association meeting held in November, alongside local elected officials. (Photo by Sabina Mollot)
By Sabina Mollot
Fed up with the consistent approvals of major capital improvement (MCI) rent increases by the state’s housing agency, Stuyvesant Town-Peter Cooper Village Tenants Association President Susan Steinberg called on local elected officials last November to get the agency to stop what seemed to be a rubber stamping process. Or at least, Steinberg said, while hosting a meeting for neighbors, to explain the reasons for the approvals of every MCI ever applied for by the landlord, when the Tenants Association has challenged each and every one of them. She noted at the time that the agency, by its own regulations, was supposed to provide explanations for its decisions.
The two state elected officials sitting on the stage of the auditorium of MS 104, State Senator Brad Hoylman and then-Assemblyman Brian Kavanagh, said they’d follow up.
Five months later, Hoylman, as well as new City Council Member Keith Powers, have penned a lengthy, legalese-filled letter to RuthAnne Visnauskas, the commissioner of the state housing agency, Homes and Community Renewal (HCR) that reiterates the TA’s arguments against the permanent rent increases.
Maria has lived in her apartment for more than 40 years. However, a few years ago, a new landlord purchased the building. The landlord started a lot of work in the building and filed for Major Capital Improvements (MCIs). The rent has gone up over 30 percent in the last 5 years. Maria is getting ready to retire and now really worries whether she will be able to afford to live in her rent stabilized apartment for the rest of her life. There are thousands of Marias living in our city today unsure what their future holds.
It all starts with a stable home. Opportunities for better employment, our children’s success in school, and the ability to lead healthier lives. But when being able to stay in our homes in New York City is a day-to-day struggle, so is everything else. Affordable housing is the cornerstone of a thriving society, but for far too long it has been under threat in our city.
ST-PCV Tenants Association President Susan Steinberg (Photo by Sabina Mollot)
By Maria Rocha-Buschel
At a Manhattan hearing of the Rent Guidelines Board, where both landlords and tenants were invited each year to give testimony on their respective suffering, Stuyvesant Town-Peter Cooper Village Tenants Association President Susan Steinberg took umbrage at one owner representative’s argument that MCIs are not sufficient rent increases.
She spoke up after Rent Stabilization Association president Jack Freund, whose organization represents landlords throughout the city, said at the hearing that Major Capital Improvements (MCIs) and preferential rent increases don’t offer enough income to sustain landlords.
“You cannot substitute MCI increases for maintenance and operating rent increases,” he said. “MCIs have nothing to do with this issue and the suggestion that preferential rents somehow should play into this, that you can eliminate the need for rent increases because owners can increase rent (with MCIs and preferential rent increases), is a ludicrous notion. Both of those suggestions, that MCIs and preferential rent increases, can somehow substitute for a necessary, across-the-board rent increase, are just laughable.”
Later, Steinberg, who said she’d originally planned to read pre-written testimony, changed her mind in order to respond to Freund.
“Perhaps he forgot that MCIs get onto a tenant’s rent in perpetuity,” she said during her testimony. “It goes way beyond recouping the landlord’s costs and if you’re a tenant living in a building and have received several MCIs that get added permanently on top of the RGB increases, that adds up really fast. Maybe it’s laughable for the landlord but it sure isn’t for tenants.”
Repairs on Stuyvesant Town building facades began last Monday and will continue through October 2017. Management announced the work in a newsletter sent to residents earlier this month, noting that the work is being done to comply with Local Law 11, a citywide program through the Department of Buildings that requires owners to inspect and maintain building facades.
StuyTown Property Services community affairs manager Marynia Kruk said that the amount and scope of the work are building-specific based on what repairs are necessary, but most of the work may result in noise and will require scaffolds that will be dropped from the roof of the building.