Editorial: For stronger rent regulations, call Cuomo

June 15 is the day New York’s rent laws expire, and although the now-Democrat controlled Assembly and State Senate have promised to stregnthen them, Albany is still Albany and this means anything can happen before then.

To ensure that all of the legislature’s bills aimed at protecting tenants are passed, the Met Council on Housing recommends calling the governor’s office at (518) 474-8390 and asking that they be kept intact. Additionally, the Stuyvesant Town-Peter Cooper Village Tenants Association is advising tenants to do the same and also call Assembly Speaker Carl Heastie and State Senate Majority Leader Andrea Stewart-Cousins. Heastie’s Albany office can be reached at (518) 455-3791 and the district office can be reached at (718) 654-6539. Stewart-Cousins can be reached at (518) 455-2585 (Albany) and (914) 423-4031 (district).

The real estate industry has always given generously to Albany’s elected officials, including Cuomo, but tenants can still have power in numbers. Not a political kind of person? You don’t have to be. Just think of a time your life was personally impacted in some way by vacancy decontrol, MCIs, IAIs, vacancy bonuses, preferential rents or just plain unadulterated greed. (See? It’s easy.) And then let those elected officials know this price gouging spree has gone on long enough.

Accusations of racism fly at rent regs hearing

Assembly members at a hearing on rent regulations (Photos by Sabina Mollot)

By Sabina Mollot

A hearing on Thursday about the rent regulations that are sunsetting this June in Albany at times got heated with a speaker representing the real estate industry being accused of racism by the crowd and even a couple of Assembly members.

After a few New York City tenant leaders and advocates spoke favorably about a package of tenant-friendly bills aimed at, among other things, ending vacancy decontrol and major capital improvement rent increases, Joseph Strasburg, the president of the Rent Stabilization Association, told the Assembly housing committee members not to “NYCHA-tize the private sector.”

The Rent Stabilization Association represents roughly 25,000 New York City landlords.

In response to his comment, a couple of audience members shouted out “Racist!”

Strasburg disagreed, but one black Assembly member, Latrice Walker, responded that as someone who had grown up in a NYCHA development, only to later lose that apartment and become homeless, she didn’t appreciate his comment.

This was echoed by another black Assembly member, Walter Mosley, who said, “I think the term used with regards to NYCHA, it’s not up to the person who doesn’t know what racism is to determine what racism is. To say it is disrespectful to the members here who are of color as well as those who live in NYCHA, who are a number of my constituents.”

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Politics & Tidbits: Playing chess in Albany

By Steven Sanders,

former Assembly member, 74th District

Steven Sanders

Steven Sanders

To begin to understand the machination of Albany politics especially with the state legislature, a basic understanding of chess is necessary. For they are based on the very same principles.

Chess is a game of strategy. Unlike other games, the moves made in chess are often times disguised and not always what they appear to be. First of all, in chess each player starts with 16 pieces. The pieces are of different values and are capable of making different moves across the 64 squared checkerboard. The goal in chess is to navigate across the board using your pieces in different ways to ultimately capture the opposing player’s “King.” Each player knows that in spite of starting out with 16 pieces they will lose some pieces along the way and even sacrifice some pieces in order to position themselves for victory.

To some extent that explains why Senator John Flanagan, the newly minted Senate (Republican) Majority Leader from Long Island, is so interested in New York City rent regulations. There are many more important local issues to Senator Flanagan’s constituents and fellow legislators from Nassau, Suffolk or upstate districts. But Flanagan is deftly holding on to the rent regulation issue near and dear to virtually every city legislator in the hopes of trading it or sacrificing it for something more important to his constituents and colleagues in the Senate. Each issue is like a chess piece. Each has a relative importance and each has a value if it is to be given up for something else.

No issue stands alone in Albany. Each issue is part of the bigger picture of what can be gained or lost in negotiations. This is probably also true of New York City mayoral control of the public schools which like New York City rent regulations must be renewed. It is very important to New York City politicians. But Flanagan and his mostly suburban and rural colleagues are holding on to both of those issues like a dog and its favorite bone.

Senator Flanagan cares much more about upstate property taxes and even some changes to the state’s restrictive gun laws (although that may now be a nonstarter following yet another gun tragedy, this time in a church in South Carolina). Flanagan also cares about upstate economic revitalization issues and even tax cuts to underwrite private and parochial school costs for parents who send their children to those schools or individuals who donate funds to those schools.

So the leaders in the Democratic Assembly led by Speaker Carl Heastie and the Senate leaders will move those issues along the checkerboard of negotiations knowing that to achieve their ultimate goals they will sacrifice some of those less important issue to gain more important issues for each of them. As for the governor, He will try to broker a deal that satisfies his political priorities by cobbling together issues that are of importance to the Assembly and the Senate that satisfies his political needs. In this case the governor is using the rent

regulation issue as leverage to procure approval from the Assembly on issues that it is less interested in, but ones that the governor has a great interest.

This is the traditional horse trading that has always been part of the Albany legislative culture of getting things done. But this gamesmanship causes great anxiety to ordinary citizens who feel like pawns in the game, especially one million New York City tenants.

Rent regulations and protections against eviction or huge increases in rents is a matter of life and death for many apartment dwellers.

So my advice to the leadership of Albany is to get this done this week and allow the people of the State of New York to proceed with their lives without the uncertainty and intrigue of Albany machinations.

Really, Mr. Cuomo, Mr. Heastie and Mr. Flanagan… this is not a game!

 

Tenants blast ‘framework’ deal for rent regulations

June25 Cuomo Heastie Flanagan

Assembly Member Carl Heastie, Governor Andrew Cuomo and Senate Majority Leader John Flanagan (Photo via Governor Andrew Cuomo Flickr)

By Sabina Mollot

On Tuesday afternoon, the rent regulations, over a week after their expiration, were discussed in what was called “the framework of an agreement” that was immediately blasted by tenant advocates for not repealing vacancy decontrol or reforming preferential rents. The plan was announced by Governor Andrew Cuomo, Assembly Speaker Carl Heastie and Senate Majority Leader John Flanagan in an Albany press conference.

The plan, which, as of Town & Village’s press time, was still being discussed by both legislative houses in conference, calls for a four-year extension of the rent laws, reforming major capital improvements (MCIs) so that tenants’ payments are lower though they will still have to be paid in perpetuity. Other changes include increasing penalties on landlords who harass tenants and raising the threshold at which an apartment can be subject to vacancy deregulation. Additionally, according to a press release put out by Cuomo, the state housing agency’s Tenants Protection Unit will be put into statute and vacancy bonuses and will be limited for tenants paying preferential rent, although how much or in what way it would be limited wasn’t explained. Cuomo’s office did not respond to a request for clarification by Town & Village’s deadline.

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ST-PCV TA asking neighbors to tweet for stronger rent laws

A tenant holds up a note in a photo posted on the ST-PCV Tenants Association’s Twitter feed this week.

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

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.

 

 

Pols tell tenants their stories are needed in rent law fight

 

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)

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)

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.”

Lieutenant governor hopeful takes tour of Stuy Town

Kathy Hochul gets an earful from tenants and local elected officials during a walk through the complex. (Pictured) Council Member Dan Garonick introduces her to Public Safety Chief Bill McClellan. (Photo by Sabina Mollot)

Kathy Hochul gets an earful from tenants and local elected officials during a walk through the complex. (Pictured) Council Member Dan Garonick introduces her to Public Safety Chief Bill McClellan. (Photo by Sabina Mollot)

By Sabina Mollot

The Stuyvesant Town-Peter Cooper Village Tenants Association, which has recently enlisted the aid of the de Blasio administration in an effort to maintain some affordability in the complex, is also now hoping it will have an ally in Kathy Hochul, Governor Cuomo’s choice for the next lieutenant governor.

On Thursday afternoon, Hochul joined Tenants Association Chair Susan Steinberg along with a handful of TA volunteers on a stroll through Stuy Town, and got filled in on tenants’ more pressing concerns. She’d come at the request of Council Member Dan Garodnick, who was also there with Assembly Member Brian Kavanagh. Prior to the walk through the grounds, Hochul, a former Congresswoman asked the small group, “What’s on your mind?”

“You got a whole afternoon?” was Steinberg’s answer.

Tenants then began chiming in about the dormification of the community with students packing into apartments in order to make the rent affordable, major capital improvements (MCI) for what often seems like unnecessary work — and tenants’ frustration at having to pay for those improvements in perpetuity — and the fear of both longterm and newer tenants of getting priced out. Other topics brought up included more longterm tenants’ fear of harassment, increased transience and questions about what will happen to the rents when the J-51 tax abatement expires in the year 2020. Steinberg also briefed Hochul on the TA’s partnership with developer Brookfield aimed at a condo conversion as well as CW’s lack of interest in talking business with them. Al Doyle, the former president of the Tenants Association, brought up the ongoing issue of predatory equity throughout the city, with Stuy Town, of course, being the poster child for the practice.

Aug7 Kathy Playground10

Assembly Member Brian Kavanagh and Kathy Hochul (Photo by Sabina Mollot)

Kavanagh and Garodnick brought up that they wanted to see the rent laws get strengthened, but the State Senate hasn’t exactly been friendly to tenants. While refraining from making any promises, Hochul said she thought the community is “worth fighting for.” If she becomes lieutenant governor, she pointed out, she’d have the tie-breaking vote in the event of a deadlock in Albany. From 2011-2013, Hochul represented New York’s 26th District, which includes the areas of Buffalo and Niagara Falls.

During her time in Congress, she lived with colleague Carolyn Maloney in Washington.

“We used to say that we should have a reality show, ‘The Real Women in Congress,’” said Hochul. When asked how Maloney was as a roommate, Hochul admitted, “She’s a lot cleaner than I am.” As for the current state of the Congress, Hochul casually remarked that it’s “the most dysfunctional government on the planet.” However, she added quickly, “There are still a lot of good people out there.”

Hochul also touted her experience, claiming she’d helped make the Department of Motor Vehicles “a more positive experience” when she served as county clerk and when in Congress, fought with other Democrats “like pit bulls” to get more cash for restoration after Hurricane Sandy than Republicans wanted to allocate. During the walk through the grounds, Hochul said that from what she’s seen, “Everybody wants the same thing. A safe house, a job, their kids to get a good education. It’s universal. It’s not downstate or upstate. This is what the governor and I are focused on.”

Steinberg pointed out some positive aspects of the community like the playgrounds, a few of which recently got new water features, and the hayrides for kids that take place each Halloween. When passing by the Oval Café/Playground 9 area, Hochul remarked, “I’d like to live here.”

When the group walked past the Public Safety office, Garodnick, realizing officers might think tenants were about to rally, made a point to say hello and introduce Hochul to Public Safety Chief Bill McClellan. Soon afterwards, Hochul left the complex at First Avenue and the crowd dispersed.

Hochul (right) listens to tenants, including Tenants Association Chair Susan Steinberg and Council Member Dan Garodnick, discuss quality of life issues and dwindling affordability in Stuy Town. (Photo by Sabina Mollot)

Hochul (right) listens to tenants, including Tenants Association Chair Susan Steinberg and Council Member Dan Garodnick, discuss quality of life issues and dwindling affordability in Stuy Town. (Photo by Sabina Mollot)

Steinberg then said that she did feel Hochul was genuinely listening to tenants. “I think she got it,” Steinberg said. Kavanagh also said he thought she’d make “a strong partner in the executive branch,” and support tenants, while Garodnick also said he believed Hochul would be in tenants’ corner. “She is clearly a serious and thoughtful person who was willing to take the time to understand our unique challenges,” Garodnick said.

Doyle, meanwhile, just seemed happy that the would-be lieutenant governor got to hear firsthand from tenants how all the different types of rent increases were impacting the community.

“Homeowners outside the city, when we tell them how (an MCI) is a permanent increase, they don’t believe us,” he said.

Following the stroll, T&V asked what Hochul’s thoughts were on the Cuomo administration doing something to preserve dwindling stability and affordability in the community.

Responding in a written statement, she said, “Stuyvesant Town and Peter Cooper Village are critical to keeping New York affordable. I will work closely with the governor, along with the office of New York State Homes and Community Renewal, to ensure that the rights of thousands of rent-regulated tenants are maintained and preserved for generations to come.”

There was no response, though, when T&V asked Hochul’s campaign reps if she wanted to comment on investigation over corruption in the governor’s Moreland Commission. However, in an interview this week with Buffalo-based NBC news outlet WGRZ, she defended the commission, saying, “they had the independence to do what they needed to do.”

Garodnick says city needs to crack down on predatory equity

At City Hall, Councilman Garodnick cited Stuyvesant Town as a prime example of predatory equity, a practice that has continued throughout the city. (Photo by Sabina Mollot)

At City Hall, Councilman Garodnick cited Stuyvesant Town as a prime example of predatory equity, a practice that has continued throughout the city. (Photo by Sabina Mollot)

By Sabina Mollot

With Mayor de Blasio expected to unveil a housing plan soon that’s supposed to create or preserve 200,000 units of affordable housing, Council Member Dan Garodnick has released a report that’s determined a part of the plan to maintain the city’s stock of affordable housing needs to be a crackdown on predatory equity.

Garodnick discussed the issue in front of City Hall on Tuesday, saying that even after the market crashed, landlords have continued to accrue excessive debt in building purchases and then attempt to either pass the costs on to tenants in ways that are sometimes illegal or become slumlords.

“Tenants are being forced out because rents are jacked up on their apartments or because the apartments are becoming uninhabitable,” he said. Garodnick, while joined by other elected officials, housing advocates and a handful of tenants of distressed buildings, said it’s up to the city to step in with policy to break the cycle of buildings becoming distressed and tenants getting gouged or harassed. Naturally, Garodnick gave the example of the now infamous $5.4 billion Stuyvesant Town deal, in which owner Tishman Speyer lost all of its investors’ money following a failed attempt to turn the mostly rent-regulated complex market rate. Calling it the poster child for predatory equity, Garodnick recalled how “their entire business plan was to evict as many rent-stabilized tenants as quickly as they could.”

Meanwhile, since then, there have been similar deals that have been even worse in terms of those properties being allowed to deteriorate. Such blighted properties, noted Garodnick, are a burden on the city. He also referred to the refinancing last week of the 1,600-unit Three Borough Pool, which was $133 million in debt. After being refinanced, the property’s debt has swelled to $146 million, which Garodnick said makes no sense.

“They avoided foreclosure by refinancing with even more debt. How is that even possible?”

In his report, titled “Ghosts of the Housing Bubble; How Debt, Deterioration and Foreclosure Continue to Haunt New York After the Crash,” Garodnick suggested a few policy changes to deal with properties that are overleveraged. One is to have the city invest much more in Alternative Enforcement Program, which allows the city to repair violations and bill the owner. The city currently only spends $50,000 on the program, relying on federal grants to make up the rest of the $7.6 million budget.

Another plan is to give good-acting landlords the first chance to buy foreclosed mortgages after the city buys them. He also said he would look into the possibility of “creative solutions” where long-suffering tenants being able to get a crack at buying. He noted how this was currently a goal in ST/PCV, though in that case, the proposal to buy was not organized with assistance from the city. Another of his recommended changes is to create new standards for receivers or debt servicers to make sure they are protecting the health and safety of residents. Currently, receivers can’t be sued in Housing Court without approval of the Supreme Court judge who appointed them. Finally, Garodnick also recommended creating new state guidelines around the existing federal Community Reinvestment Act, which pushes banks to lend in low-income areas. The idea there is to focus on the quality of loans, not just the quantity.

Along with those proposals, Garodnick also discussed new legislation that would make the Department of Housing Preservation and Development (HPD) create a watch list of owners who engage in predatory equity. The bill was authored by Council Member Ritchie Torres, who represents a district in the Bronx where the practice has become increasingly common.

Harvey Epstein of the Urban Justice Center recalled the predatory equity in Stuyvesant Town. (Photo by Sabina Mollot)

Harvey Epstein of the Urban Justice Center recalled the predatory equity in Stuyvesant Town. (Photo by Sabina Mollot)

While at City Hall, Torres said that at this time, “There are no consequences” for owners who engage in “intentionally harassing, defrauding and displacing tenants from their homes.” He, along with State Senator Brad Hoylman, said he supported Garodnick’s proposals, and Hoylman said he would address them at the state level. A couple of tenants then shared tales of living in buildings that were so poorly maintained, the only ones who seemed to be in control were the rats and drug dealers.

The issue of Stuyvesant Town was also revisited by Harvey Epstein, director of the Urban Justice Center’s Community Development Project. Epstein recalled when Garodnick, then a new member of the City Council, contacted him in 2006 about Tishman Speyer. At that time, stabilized tenants had started receiving, en masse, primary residence challenges from the owner. “Over 3,000 tenants were subject to potential eviction in Stuyvesant Town,” said Epstein. “That’s what predatory equity is. When you take tenants who’ve lived in a building 20, 30, 40 years and you find ways to get them out.”

Tenant-friendly bills idle in Albany

Pending legislation aims to reform the Rent Guidelines Board. Photo by Maria Rocha-Buschel

Pending legislation aims to reform the Rent Guidelines Board.
Photo by Maria Rocha-Buschel

By Sabina Mollot
For years, tenant-friendly politicians (Assembly Democrats) have been pushing in Albany for legislation aimed at keeping housing affordable and protecting renters’ rights while the real estate-friendly pols (Senate Republicans) have successfully pushed back.
While local legislators Assembly Member Brian Kavanagh and State Senator Brad Hoylman have admitted they don’t know if this year will be any different once the legislative session starts up again after the summer, they are of course going to continue to try to get the bills, which have passed the Assembly, get through the Senate in one piece this time.Tenant-related laws were last strengthened somewhat in 2011 after years of being weakened due to landlord pressure. They included changing the rent increase owners can charge for renovating apartments from 1/40th to 1/60th of the rent and killing a bill that would have legislatively undone the effects of the “Roberts v. Tishman Speyer” lawsuit. Additionally, high-income decontrol levels, which previously deregulated apartments where tenants paid $2,000 in rent and earned $175,000 a year in household income were raised to $2,500 and $200,000, respectively.
However, there was no effect on major capital improvement (MCI) fees or vacancy bonuses, nor was there a change to vacancy decontrol. Home rule was also not returned from the state to the city.
Currently, these are the major tenant-related bills that have so far passed the Assembly, but have been rejected by state senators:

1. Reform of the Rent Guidelines Board—This bill would give the City Council more oversight in the selection of the nine people who sit on the board. Currently, they are chosen by Mayor Bloomberg, and tenant advocates have criticized the board’s five “public members” as being owner-biased.
The bill would mean those who want to serve as public, tenant or owner members would have to explain why they want the unpaid job, which involves getting heckled at every public appearance, and what experience they have that qualifies them to decide the fates of over a million rent-stabilized New Yorkers.

2. Limiting of MCI fee payment period—Major capital improvements are fees landlords can charge to recoup their costs for necessary improvements they make on their properties, on top of tenants’ regular rent. However, even after the projects are paid off, the fees still remain on tenants’ rent bills. This means MCIs can end up being big business for owners, and in 2009, after meeting with the state housing agency, ST-PCV Tenants Association leaders learned that 20 percent of the MCI requests in the city came from ST/PCV alone.
If this bill is passed, the charge for an MCI would be paid off in a period of seven years and then taken off a tenant’s rent bill.
“So it doesn’t become permanent,” said Kavanagh, “which gives landlords incentive to do things that are not necessarily in the best interest of the building or tenants.”

3. Repeal of vacancy decontrol—While at this time, residents in Stuyvesant Town/Peter Cooper Village are rent-stabilized because of the outcome of “Roberts v. Tishman Speyer,” Kavanagh pointed out that vacancy decontrol will be allowed once again to turn vacated apartments in ST/PCV to market rate once the property’s J-51 tax benefits expire in 2020. Repealing vacancy decontrol would obviously remove incentive for landlords to churn out apartments in the hopes of getting a new tenant to pay market rate.

4. Lowering of vacancy bonuses—Currently, every time a rent-stabilized apartment is vacated, an owner can raise the next tenant’s rent by 20 percent. This bill would lower that amount to seven percent. This, bill, too, is aimed at reducing a landlord’s incentive to encourage apartment turnover.

5. Elimination of “preferential rents”—Currently, in many cases in the city, owners charge what’s referred to as “preferential” rents to tenants, while also explaining that legally, the charge could be higher. This has led to confusion among tenants, in particularly those who are new to rent-regulated housing.
Kavanagh, however, said he considers the policy a bait-and-switch scheme. Because, he said, when the lease is next up for renewal, a tenant’s rent can be increased drastically up to the legal rent. If the bill is passed, once a tenant’s rent is set, there couldn’t be any hike at the next renewal other than what has been issued by the Rent Guidelines Board.
“In many parts of the city, they use preferential rents to get you into apartments,” said Kavanagh.

Additionally, although not exactly housing related, one bill that Hoylman said he believes will ultimately help tenants is campaign finance reform. Through this act, he believes, more Senate members will support tenants rather than the real estate industry.
He added that he thought the act does have some legs, in part due to a commission started by Governor Cuomo this summer that will investigate legislators and possibly uncover misconduct, including over issues that are campaign finance related. It’s unlikely, however that anything will happen this year, since the commission won’t be reporting on its findings until December.