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.
ST-PCV Tenants Association Chair Susan Steinberg and other tenants at a vigil on Sunday outside the midtown Manhattan office of Governor Cuomo. (Photo by Anne Greenberg)
By Sabina Mollot
It wasn’t quite the climactic end to another four years tenants were hoping for when at midnight on June 15, the laws regulating rents in New York expired without being renewed or strengthened.
The following morning, the talks continued in Albany, though there was no sign that that they’d be concluded any time soon.
Part of the reason was that Governor Andrew Cuomo has been hoping to include the passage of an education tax credit in the negotiations, while Senate Republicans also last week passed a set of rent regulation legislation that’s wildly different from the package the Assembly passed in May. The much hyped 421-a tax abatement for developers who include some affordable housing in their projects has also been a factor, but hasn’t been given as much attention as it was expected to get, according to State Senator Brad Hoylman.
Hoylman described the tax program, which also expired on Monday, as being “radioactive” to many of his colleagues because of its being “at the heart of the investigations” into corruption in Albany by U.S. attorney Preet Bharara.
“It’s understandable that it wouldn’t be a front burner issue,” said Hoylman, adding he wouldn’t be mourning the program’s loss if it isn’t ultimately renewed and that he thinks it ought to be negotiated separately.
Garodnick: How rent laws in current state have been used to raise rents in ST/PCV
The following is an open letter to Governor Andrew Cuomo from Council Member Dan Garodnick.
Dear Governor Cuomo:
Many New Yorker City residents are looking to you to help us strengthen the rent laws in the coming weeks. While there are many ways in which these laws need revision, I wanted to point out two areas of the law that have been particularly destructive within Stuyvesant Town and Peter Cooper Village (ST/PCV) – a community of 25,000 renters, all rent-stabilized, which make up a portion of my Council District.
The areas of particular concern have been: vacancy decontrol, preferential rents, and Major Capital Improvements (MCIs).
Vacancy Decontrol: Vacancy decontrol creates some of the most perverse incentives that lay within our rent laws, and it has already done a great deal of damage in ST/PCV. When the law allows a landlord to jack up rents upon vacancy, there is a very strong push for them to achieve a vacancy – almost at any cost. In the case of ST/PCV, the property was sold in 2006 to an owner whose entire business plan only penciled out if they pushed rent-stabilized tenants out of their homes, quickly. The result was that tenants were pursued ruthlessly on a variety of bases to get them to leave.
Senate bill S1167 and Assembly bill A1585 would end vacancy decontrol, and would re-regulate many of the units that were deregulated over the last 15 years. I hope you will support it.
Preferential rents: Because of the “Roberts v. Tishman Speyer” case, many tenants in ST/PCV have legal rent-stabilized rents that are thousands of dollars more than the market rate rents for their apartments. These tenants are paying market rates, but well below what the law allows. The result is that on lease renewal, the landlord is hitting tenants with increases of $250, $500 or even up to $700 per month. Many tenants find themselves suddenly, and without any ability to plan, unable to afford these increases.
There are smart proposals that would give much more certainty to tenants in this position, such as S1775/A5473, which would only allow Rent Guidelines Board (RGB) increases on preferential rents, and keep them from rising to the legal rent until the end of the current occupant’s tenancy.
MCI Reform: I also hope you will support efforts to reform MCIs. MCIs were created so that landlords would have an incentive to improve the property, and to have the ability to recoup their investment. The law today allows them to add the cost of the MCI onto tenants’ rents, and leave it there forever – and long after the investment has been paid for in full by the tenants. S1493/A5373 would make these MCI’s temporary, ensuring that owners are compensated for investing in their properties, but in a way that fair to tenants.
These are only three ways in which our rent laws are broken. I have, however, seen how vacancy decontrol, preferential rents without protections, and MCI loopholes have burdened my own district, and I am certain that your efforts to reform those laws would make a difference. Thank you for your attention to this matter.
A tenant holds up a note in a photo posted on the ST-PCV Tenants Association’s Twitter feed this week.
By Sabina Mollot
With the rent law negotiations in Albany just a couple of weeks away, The ST-PCV Tenants Association is asking neighbors to make their feelings on the matter known through social media.
The “Tell Your Story” campaign encourages Stuyvesant Town and Peter Cooper Village tenants to share their personal experiences dealing with rent increases, including major capital improvements (MCIs). Prior to the June 15 decision on whether the rent regulation laws will be strengthened or renewed as is or just allowed to expire (the latter of which is not expected), tenants’ tweets with the hashtag #tellyourstory will be compiled and sent to Governor Cuomo.
“We want our legislators to understand that real people are affected by rent regulation,” said Susan Steinberg, chair of the TA. “It’s not just units, it’s about people’s lives.”
She added, “It’s only 140 characters. How hard can it be?”
In addition, the campaign is aimed at drawing awareness to MCIs and their impact on tenants. “Many new tenants don’t understand MCIs and their implications,” Steinberg said. “Tenants need to know that MCIs can amount to thousands of dollars a year in charges. And the best way to do that is by communicating personal experiences.”
A photo posted on the Tenants Association’s Twitter feed
To keep things interesting, tenants aren’t being asked to type their stories onto a keyboard but instead write on paper and take a photo of the note. So far it’s been the TA doing the posting of neighbors’ notes but Tenants Association President John Marsh is hoping neighbors will soon chime in on their own feeds. It’s the first social media campaign for the Tenants Association and since many Stuy Town lifers don’t tweet, TA volunteers are now finding themselves in the position of first having to educate newer neighbors about what the rent laws mean and the changes tenants are hoping for. Those changes include vacancy decontrol, MCI reform and an end to preferential rents.
“Everyone in this community is impacted by these Albany decisions and MCIs,” Marsh said. “This campaign provides an outlet for tenants to make their voice known.”
Of the notes to be put on Twitter so far, one shared by the TA (@ST_PCV_Tenants) read, “I’ve lived here 65 years I don’t wanna go.” Another read, “Uncontrolled landlords are pricing even middle incomes out of Manhattan.” Another read, “I’ve been living here six months. Rent laws should be extended for everyone.”
The Tenants Association also previously asked tenants at a meeting last month to write postcards or letters to Albany legislators, in particular to Cuomo, Assembly Speaker Carl Heastie and local Assembly Member Brian Kavanagh. The Association is also organizing a bus trip to Albany on June 9. Anyone interested in going should RSVP by June 4 online at stpcvta.org or by calling (917) 338-7860.
Over 400 people listen as local state elected officials brief them on the uphill battle over the rent laws coming in June. (Photo by Sabina Mollot)
By Sabina Mollot
On Saturday, over 400 residents of Stuyvesant Town and Peter Cooper Village gathered for a meeting held by the Tenants Association that focused on the upcoming expiration of rent laws and the uphill battle tenants would have in trying to get them strengthened.
Speakers briefed the audience on the current power dynamic in Albany, while also telling those in attendance that without tenants writing to Albany lawmakers, especially the governor, the effort is a lot less likely to succeed.
“If I go to Albany and say (to Governor Cuomo) two and half million people are going to be very upset with you, if that’s not clear in the streets and not in the mail in his email inbox, it’s very hard to believe,” said Assembly Member Brian Kavanagh.
Kavanagh was one of the speakers of the event, which was held at Simon Baruch Middle School, along with State Senator Brad Hoylman and TenantsPAC treasurer Mike McKee.
McKee told the crowd if the laws are renewed in their current state, “It would be a terrible defeat for tenants.” Referring to a recent Daily News article that quoted Cuomo as saying the laws and the controversial 421-a tax abatement for developers could possibly just be renewed and not changed, due to the federal investigations being conducted in Albany, McKee added, “I’m sorry, but that is crap.” McKee has said that 421-a is expected to be used as leverage during the rent law negotiations.
Both Hoylman and Kavanagh spoke about Albany’s power system and how with the Senate in the hands of Republicans whose campaigns are financed largely by real estate, the only hope for tenants is in swaying the Assembly, led by Carl Heastie, and the governor.
Meanwhile, Kavanagh has said he wants to close the “LLC loophole” that makes New York one of the few states where each LLC created counts as a separate campaign contributor, but, he admitted, “I’m not sure we’re going to do that this year.”
However, he added that recent media attention on the issue may prove helpful anyway.
“There may an opportunity to shame people into backing off,” he said.
Assembly Member Brian Kavanagh, ST-PCV Tenants Association Chair Susan Steinberg and State Senator Brad Hoylman (Photo by Sabina Mollot)
McKee said that while in the past, major decisions in Albany have been made behind closed doors by the “three men in a room” (the governor, the Assembly speaker and Senate Majority Leader Dean Skelos) this year there might be four — if Jeff Klein is allowed to participate. Klein is the head of the State Senate’s Independent Democratic Conference, a breakaway group that caucuses with Republicans. McKee, who’s often blasted Klein as being a tool of the real estate industry, commented that his participation would only be to tenants’ disadvantage.
As for Skelos, McKee added, “Dean Skelos will not do anything voluntarily to help tenants or to hurt landlords. The Assembly has to do what’s called taking hostages. There are dozens of things everybody wants at the last minute. Some of it is minor stuff, nothing to do with housing even.”
One advantage of tenants, he added, is that with Heastie being new as speaker, “he has to prove himself. He has to be accountable not only to us but the members that elected him speaker.” Heastie has said he considers strengthening the rent laws a priority. That said, McKee warned, there’s still always the possibility a tough talking pol will “wimp out” at the eleventh hour. “There is always a wimp factor in Albany,” he sighed.
As for what tenants could do, he urged people to write to the aforementioned three men (letters rather than postcards), and get three neighbors to do the same as well as turn out, if possible for any upcoming rallies. One rally, organized by the Real Rent Reform campaign and the union 1199SEIU, which is aimed at strengthening the rent laws, is scheduled for Thursday, May 14 at 5 p.m. at Foley Square (corner of Centre and Worth Streets). The group will then march over the Brooklyn Bridge.
“We need a very big turnout,” said McKee.
Another rally is on Wednesday, May 6 in front of Cuomo’s Manhattan office at 633 Third Avenue (between 40th and 41st Streets) from 10 a.m.-noon.
He then claimed to have a plan aimed at shaming Cuomo into helping tenants. McKee declined to discuss this further. “That’s all I’m prepared to say,” he said later.
When taking his turn at the podium, Tenants Association President John Marsh echoed the sentiment of the other speakers, calling on neighbors to get involved. “If everyone takes a small step, we can have a very loud voice,” said Marsh.
He also mentioned a door-knocking campaign that he and Council Member Dan Garodnick led through ST/PCV the following day, with Garodnick’s two young sons in tow. Garodnick later said the building walk-throughs resulted in many tenants being appreciative of the reminder of the looming rent negotiations in June.
Kavanagh, when addressing the audience, said that while he realizes many new residents at ST/PCV probably feel the rent laws have no teeth when they look at the numbers on their rent bills, being rent regulated still offers New Yorkers protections they wouldn’t have otherwise.
“It prevents landlords from arbitrarily evicting tenants and that doesn’t exist for most tenants in the city,” he said.
Because of the outcome of the “Roberts v. Tishman Speyer” lawsuit, all units in ST/PCV will be regulated until the property’s J-51 tax abatement expires in 2020.
Kavanagh reiterated the goals for strengthening the rent laws, which include repealing vacancy deregulation and other policies that give incentive to owners to vacate units such as vacancy bonuses and reforming the way individual apartment improvement (IAI) rent increases are issued. Reform of major capital increases (MCIs) is another goal.
Kavanagh also got a round of applause after saying he wanted to close the preferential rent loophole. Due to preferential rents, which are given to most new residents in renovated apartments in ST/PCV, rent increases can be far higher than those issued by the Rent Guidelines Board, if the tenants’ legal rents are higher than what they’ve been paying (the preferential rent).
“In our community it’s a particular problem due to the way ‘Roberts’ played out,” said Kavanagh. “(Tenants) are facing enormous increases.”
Manhattan Borough President Gale Brewer, who’d been sitting in the audience at the meeting, along with Garodnick, at one point, popped up to comment about preferential rents, which she said was happening all around the city.
“We go case by case and try to fight it but there is no great answer,” she admitted.
The meeting then concluded with a Q&A period, with most of the questions from the audience—which were limited to the topic of rent—being on the theme of MCIs. Tenants mainly asked why they were being forced to pay them. Hoylman and Kavanagh suggested that tenants’ use their frustration and personal experiences as inspiration to write to the governor.
When a woman asked where the mayor was in this fight, saying, “He seems to have had a low profile lately,” Kavanagh responded to say he thought the mayor would be more visible soon. “This is the time we roll out this fight and I think you’ll see the mayor rolling out this fight,” he said. Hoylman added that a lot is done “behind the scenes,” going on to note that this is part of Albany’s dysfunction.
When a man asked if strengthening of the rent laws would help a conversion effort, Kavanagh said he thought it would in that it would help thwart predatory bidders.
Another tenant then asked if it could work to tenants’ advantage if Skelos, who’s being investigated by U.S. Attorney Preet Bharara, were to be indicted. The answer, however, was that it wasn’t likely to have any impact during rent negotiations.
“If he’s indicted and forced to step down, it’s unlikely that he’d go to trial before June and you don’t have to leave office until you’re convicted,” said Hoylman. “It would have a greater impact next year than this year.”
Town & Village later contacted the office of the governor to ask his position on strengthening the rent laws. In response, a spokesperson emailed prepared statements made by Cuomo at the Association for a Better New York breakfast on rent laws and 421-a.
Included in the written statement was a comment that “At a maximum maybe we can make some fine modifications in both of them.”
“The 421-a, first I believe has to be extended and I believe that’s essential,” the statement read. On changes to it, which he said he believed were needed, he said, “If it was a different time in Albany, frankly, and Albany was a little bit more of a stable situation I would normally take those negotiations to Albany and try to work it out among the parties. Albany has a lot going on right now let’s say, so I’m hoping and I’m asking the parties to work out the disagreements among themselves or their desires for modifications. If they can great, in any event 421-a has to be extended.”
He went on to say, “Rent has to be extended. It is a New York City issue. If we don’t extend rent you would have chaos in the real estate market, these are rent regulations, rent stabilization etc. You would have chaos in the real estate market unlike anything we have seen because it regulates the private industry not another government. It lapses one day you will see real estate entities and landlords start rising rents and evicting tenants. I mean it would be immediate mass mayhem.
“So at a minimum we have to extend those protections but in truth, because everyone has been watching the situation, to have these final negotiations on these delicate points is going to be problematic this year. So, at a minimum rents extended 421-a, is extended. At a maximum maybe we can make some fine modifications in both of them. The democratic assembly is going to be more aggressive on extending rent than the senate Republicans. 421-a, both houses want.”
A spokesperson, Frank Sobrino, when asked if the governor could clarify what was meant by “fine modifications,” said this was a general statement in response to suggested changes. He also denied that the statements were an attempt to remain neutral.
“He said that ‘at a minimum,’ both rent regulations and 421-a must be extended,” said Sobrino. “That’s not neutral.”