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.
Daniel R. Garodnick