Democrat control of Senate is likely

TenantsPAC wary of Klein’s leadership

State Senator Jeff Klein

State Senator Jeff Klein

By Sabina Mollot
On Wednesday, June 25, a group of breakaway Democrats in the State Senate, called the Independent Democrats Conference, formed an alliance more mainline Democrats. As a result of this cooperation, which would begin after the November elections, IDC Senator Jeff Klein, if re-elected, would become a “co-leader” along with Senate Minority Leader Andrea-Stewart Cousins, and the IDC’s alliance with Senate Republicans would end. The IDC was formed in 2012.

The move, while cheered by Governor Cuomo and Mayor de Blasio, is being seen as potentially disastrous by the real estate industry since it’s expected to put Democrats back in control of the Senate. Additionally, Stewart-Cousins is a tenant-friendly Democrat. At the same time, it’s also being eyed with caution by TenantsPAC, which views Klein as a tool for landlords.

TenantsPAC has been actively campaigning to get Klein’s opponent in the primary, former City Council Member Oliver Koppell, elected instead.
The political action committee has even begun phone banking to get close to 700 registered democrats in The Bronx to support him.
“Tenants anywhere should care about this election,” TenantsPAC treasurer Mike McKee said.
TenantsPAC has also given $4,000 to the campaign, and hopes to give the candidate $2,500 more, which would bring the donation to the maximum allowed.

Of the new Senate Democratic coalition, McKee said, “It makes sense for the real Democrats to do this, but we’re raising a note of caution about a major issue which is coming up in the legislature next year.”
This statement was in reference to the law governing rent regulated housing that will be up for renewal, and Klein, noted McKee, has a history of shooting down pro-tenant legislation.

TenantsPAC actually supported Klein a decade ago, because, “his opponent was worse.” The opponent, Steven Kaufman, had said he would caucus with Republicans. And as for Klein, McKee said, “we didn’t know he would be this bad.”
Over the years since then, McKee has had three meetings with the senator, two in his district office and one in Albany, with constituents present, in an effort to get Klein to support a repeal of vacancy decontrol.
“He told us flat out he would vote on it if it comes up, but ‘I will do everything in my power to make sure it doesn’t get to the floor,’” said McKee. “And it never got to the floor. You have to give him some credit for being so honest and not stringing us along.”

A spokesperson for Klein didn’t respond to T&V’s request for comment.

State Senator Brad Hoylman, meanwhile, said the new cooperation should still make a big difference because, as McKee noted, Democrat legislation doesn’t currently tend to make it to the floor for consideration. This would be legislation on issues such as tenant protections, LGBT rights, the DREAM Act and de-criminalizing small amounts of marijuana.
“Everything has been stymied by Republican control of the Senate,” Hoylman said. “It’s at-will legislation, whatever they want. The leaders of the Senate have tremendous strength.”

For this reason, Hoylman said he wants to see more power given to committees.
“I’m hoping that this is the beginning of a new term in the Senate with new leadership that defies the dysfunctional label some have wanted to paint Democrats with,” he added.

This dysfunction was the reason for the formation of the IDC.Following its creation, out of 63 Senate members in New York, 24 are currently Democrat, five are IDC, 30 are Republican, although, noted Hoylman, “One of the Republicans is a Democrat.” That would be Simcha Felder of Brooklyn, who conferences with Republicans “even though he was elected as a Democrat.” Then there are two vacant seats formerly held by Republican Charles Fuschillo of Long Island, who resigned to work for a nonprofit, and Democrat Eric Adams, who’s now the Brooklyn borough president.
There are former Democrats John Sampson (who’s been charged with lying about a liquor store he’s a partner in) and Malcolm Smith (who’s been accused of being involved in a scheme to bribe Republicans) who were “kicked out and floating without a committee,” said Hoylman.

As for the shakeup in leadership, Hoylman called it “a good position for the Democrats to be in, but,” he warned, “it is not a done deal.”
There are after all primaries coming up and “tenants were bitterly disappointed the last time Democrats were in control,” said Hoylman.
This was in 2009, a year that was marred by a coup in which two Democrats, Pedro Espada Jr. and Hiram Monserrate, temporarily switched sides. (Both men have since been convicted of crimes, Monserrate of assaulting his girlfriend, and Espada of embezzling from a nonprofit he founded, and are no longer in office.)

As for this year, “Tenant advocates cannot sit on the sidelines,” said Hoylman. “They have to make sure their voices are heard. “This could hopefully do a lot for rent regulated apartments in my district, mainly Stuyvesant Town and Peter Cooper Village. This could make a big difference but it could also be a lost opportunity.”

Maloney: Fannie/Freddie bill won’t get passed as is

Congresswoman Carolyn Maloney at a May, 2010 press conference in front of Stuyvesant Town, discusses her Fannie/Freddie legislation. (Photo by Sabina Mollot)

Congresswoman Carolyn Maloney, at a May, 2010 press conference in front of Stuyvesant Town, discusses her Fannie Mae/Freddie Mac legislation. (Photo by Sabina Mollot)

By Sabina Mollot
Two weeks before the scheduled foreclosure sale of Stuyvesant Town’s debt, Congresswoman Carolyn Maloney reintroduced legislation that would prevent Fannie Mae and Freddie Mac from investing in future, similar housing deals that lead to the loss of affordable housing rather than the creation of it.
However, she freely admitted that the bill is not likely to get passed any time soon.
“It is very difficult to get a bill through Congress, but I am continuing to build support behind this important bill,” said Maloney, “and I am looking for opportunities to incorporate the reforms it proposes in other legislation.”
The bill was first introduced in 2010 after Fannie and Freddie got affordable housing goals credits for their participation in the Tishman Speyer purchase of Stuyvesant Town.
Maloney reintroduced the bill on Friday, May 30, following the formation of a coalition of over 40 local elected officials aimed at fighting predatory equity. The Coalition Against Predatory Equity (CAPE) was formed by Council Members Dan Garodnick, Jumaane Williams and Ritchie Torres and one of its goals is to ensure responsible lending by Fannie Mae and Freddie Mac.
Both agencies are mandated by the federal government to help increase affordable housing. However, Fannie and Freddie were parties to the Stuy Town deal in 2006, despite the owners’ business plan of ousting stabilized renters and replacing them with market rate paying ones.
Specifically, the agencies invested in a $22 billion commercial mortgage-backed securities transaction that contained the senior debt on the ST/PCV. Fannie Mae and Freddie Mac’s participation as senior debt holders of $3 billion was critical, as it represented nearly 60 percent of the total cost of the acquisition.
Maloney’s bill, if passed, would prevent Fannie, Freddie or any other government sponsored enterprise (GSE) from receiving affordable housing goals credits when a project’s debt is disproportionate to its income like the ST/PCV venture.
The bill would also require the GSEs to use the same standards for assessing their investments in the secondary securities market as they would for direct investments for the purposes of affordable housing goals credits.
“Part of Fannie and Freddie’s mission is to encourage affordable housing, but some of the deals in which they have invested have caused the opposite to occur,” said Maloney in an official statement. “Affordable housing credits shouldn’t be awarded for investments when the only conceivable scenario for profitability is for rents to rise. That is what’s happening at Stuyvesant Town/Peter Cooper Village, and that’s what my legislation is designed to prevent.”
A spokesperson for Fannie did not respond to a request for comment. A spokesperson for Freddie said he couldn’t comment on legislation affecting the agency.


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.