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.
Senate Democrat Leader Andrea Stewart-Cousins, Governor Andrew Cuomo and former Independent Democratic Conference leader Jeff Klein (Photo courtesy of governor’s office)
Following what is being touted as Senate Democratic chamber reunification, Town & Village reached out to Michael McKee of TenantsPAC. He outlined the scenario as it is likely to play out in an op-ed while also sharing his thoughts on the reason for the governor’s sudden insistence on reunification.
“Everything comes down to two words. Cynthia Nixon,” said McKee. “Andrew’s scared to death and trying to hide it and he’s not fooling anyone.”
As for the Independent Democratic Conference’s sudden demise, read on, but, warned McKee, “We’ve been down this road before.”
By Michael McKee, treasurer, Tenants Political Action Committee
In a stunning development, Governor Andrew Cuomo has persuaded Jeff Klein and his fellow turncoat members of the Independent Democratic Conference not only to rejoin the mainstream Democratic conference but also to dissolve the IDC.
This is a huge political defeat for Jeff Klein, who up to now has insisted that while he was open to a reunification deal, the IDC would continue as a separate conference and he would be co-leader with Andrea Stewart-Cousins.
Now he has agreed to disband the IDC, and accept a lower position as Andrea’s deputy.
Why? Because Andrew Cuomo, Jeff Klein, and the other turncoat senators are scared of losing their jobs this year. This is a perfect illustration of how grassroots political pressure can produce results. While Klein and Cuomo are desperate to lessen the pressure on them, we need to keep the pressure on – and increase it.
State Senator Brad Hoylman voted no on numerous parts of the budget that were ultimately passed. (Photo by Sabina Mollot)
By Sabina Mollot
In the latest “Big Ugly,” the state budget released on Saturday morning yanked $4.5 million from tenant protections by completely de-funding the housing agency’s Tenant Protection Unit.
State Senator Brad Hoylman, who voted no against that measure and numerous others included in the budget, blamed his own chamber for the move. However, he said he’s been assured the TPU will continue to be able to operate through emergency funding set aside by the governor, which was also done last year. Still, said Hoylman, “What kind of message does that send to New Yorkers? The budget is a real statement of our values.”
Meanwhile, the Republican-controlled chamber saw fit to spend $3 million of taxpayer funds on an upstate golf tournament because, they said, it would create jobs and spur economic growth in the area.
In arguments that are now online on YouTube, Hoylman responded, “Four and half million dollars was cut from the budget. I’d like to see the Dick’s Sporting Goods money put into the Tenant Protection Unit.”
Update: Cynthia Nixon has announced that she is officially a candidate for governor.
By Sabina Mollot
Recently, actress Cynthia Nixon spoke with experts about a possible run for governor, according to numerous published reports. It’s also been reported that Governor Andrew Cuomo has since slammed the potential candidate as not being serious, figuring the move must have been orchestrated by his old adversary, Mayor Bill de Blasio, who Nixon has been a supporter of.
We reached out to TenantsPAC to see how the organization would feel about a Governor Nixon, and the response, from spokesperson and treasurer Mike McKee was not a surprise.
“I’m ABC,” said McKee, the acronym for which naturally stands for “anyone but Cuomo.”
“He’s been a complete failure on tenants’ rights and has failed to pass fundamental protections even though he gives lip service,” said McKee. “Actions speak louder than words.”
With sexual misconduct allegations having been made last week against Jeff Klein, the Bronx state senator who controls the Independent Democratic Conference, the proposal to reunite the Senate mainline Democrats with the IDC is likely to continue to stall.
Political watchdog Mike McKee, treasurer of TenantsPAC, said he suspects that “Jeff’s days may be numbered.” While not exactly unbiased — McKee rarely misses a chance to call Klein a landlord puppet — the veteran Albany activist put it this way: “I think this puts a monkey wrench into Governor Cuomo’s plan to reunify the Senate, which was very flawed to begin with.” But, he added that he doesn’t believe the plan was going anywhere anyway.
Under the proposed deal put forth last fall, the IDC, a breakaway group of eight Democrat senators who vote with Republicans, would share power with Democrats with each chamber’s chair becoming a co-leader. However, they would also still need Republican-aligned but non-IDC Senator Simcha Felder and two new Democrat senators in two vacant seats formerly occupied by Democrats to actually secure a majority.
Mike McKee of TenantsPAC called the proposal a bad idea (Photo by Sabina Mollot)
By Sabina Mollot
Last week, Democrat leaders in Albany laid out their hopes for a reunified Democrat body in the Senate, which is currently made up of Democrats, Republicans and the Independent Democratic Conference, eight breakaway Democrats who are aligned with Republicans. The IDC members were warned that if they didn’t start playing nice with their own party that the mainline Democrats would actively support their opponents in upcoming primaries. The warning came by way of a letter from the party that was sent to mainline Democrats as well as IDC members.
Because the State Senate is the legislative body chamber where tenant-friendly legislation goes only to flatline, Town & Village turned to TenantsPAC spokesperson and treasurer Mike McKee to ask what this attempt at a deal means for New York City’s renters.
According to him, it does have some impact despite no deal being hammered out yet.
“It’s fallen apart as it should,” said McKee. The deal would have allowed the mainline Democrats and the IDC to keep their chairs (Andrea Stewart-Cousins and Jeff Klein, respectively) as co-chairs to more effectively pass a progressive agenda. In response, the IDC said it would want to make sure progressive issues important to its own members were passed.
Every twenty years, the New York State Constitution mandates a statewide vote on whether to convene a convention to consider amending it. On November 7, New Yorkers will vote yes or no. This measure, on the back of the ballot, is more important than anything on the front.
Tenants Political Action Committee debated this question at length, and despite many arguments in favor, we voted unanimously to oppose con-con in 2017.
This was not a decision we took lightly. With a state government that is a model of dysfunction and gridlock, it is tempting to try an end run around the governor and state legislature to attempt necessary reforms they have refused to enact despite the stunning number of politicians who have been convicted of corruption and gone to prison.
It takes a lot for me to pen a letter on any topic since I have an opinion on almost every subject, but when things get personal, I feel the need to speak out. Of all the topics I now feel the need to speak out about, squirrels were not at the top of my list. When people write letters to the editor describing children attacking wildlife (Ms. Antini), or accuse tenants of spreading false statements of squirrel attacks and rummaging through garbage cans (Mr. Paslayan), or saying that squirrels are not aggressive (Ms. Turchin), I have to counter those arguments. Especially since my son is a friend of that little girl who was scratched (“Squirrel scratches kid in ST,” T&V, Sept. 14) so I can bear witness to this firsthand.
As a lifelong resident of over 50 years in Stuy Town and now raising two very young children here, I am constantly in the playgrounds and because of this I am witness to squirrels not only rummaging through garbage cans (picture included), but also going in and out of people’s strollers seeking and stealing food.
Council Member Vanessa Gibson, Speaker Melissa Mark-Viverito and Council Member Mark Levine at the vote on the legislation (Photo via Mark Levine’s Twitter page)
By Sabina Mollot
On Thursday, the City Council voted overwhelmingly to support the right of tenants facing eviction to access free legal representation. In support were 42 Council members with three opposed and one abstention.
The mayor has already indicated his support for the bill, which was sponsored by Council Members Mark Levine and Vanessa Gibson. The legislation, introduced in 2014, has since been pushed along by the Right to Counsel NYC Coalition, which is made up of dozens of civic, tenant and legal assistance organizations.
The legislation likely took three years to get voted on due to the cost, which is estimated at $155 million a year. That figure is based on $93 million to be added to city money that’s already budgeted for similar services, around $62 million, according to Andrew Scherer, the policy director of Impact Center for Public Interest Law at New York Law School, who’s been deeply involved in the coalition’s efforts. Continue reading →
The New York State Senate, which is where tenant-friendly legislation goes to die, may remain that way for at least a couple of years longer, though some district results are still unclear.
Local Democrats had hoped to “ride Hillary Clinton’s pantsuit tails,” as State Senator Brad Hoylman recently put it, and gain a majority, but as of Town & Village’s Wednesday press time, two races were so close that there is a possibility of challenges and changes due to paper ballots.
In the 8th senatorial district, Democrat John Brooks got 45.47 percent of the vote compared with Republican Michael Venditto who got 45.44 percent, according to the unofficial results posted on the State Board of Elections website. In the 5th district, Republican Carl Marcelino was leading slightly with 46.73 percent, compared with Democrat James Gaughgran with 45.03, also according to the BOE’s unofficial results.
“There might be legal challenges,” said Hoylman, adding, “Sometimes these things take weeks to resolve.”
Hoylman, who easily won reelection against an Independent candidate, Rabbi Stephen Roberts, said he was trying to remain positive about the rest of the state. He didn’t want to speculate on the outcome of the close races, admitting attaining majority status “may take a cycle more than Democrats had hoped.”
With multiple well-publicized probes into the de Blasio administration currently underway, investigating, among other things, the mayor’s attempt to help Democrats control the State Senate in 2014, it’s still too soon to say if Senate Democrats will be harmed in the upcoming elections.
This was the view of Mike McKee, the treasurer and spokesperson for TenantsPAC, despite some admittedly “stupid” behavior on the part of the mayor, who actually got TenantsPAC’s endorsement in 2013. Flipping the Republican-controlled Senate is a major goal of TenantsPAC.
But McKee agreed with the argument that’s been made by Mayor Bill de Blasio, which is that the sudden interest in his fundraising activity was politically motivated — no doubt orchestrated by the mayor’s longtime adversary in Albany, Governor Cuomo.
“Everyone knows this is how he operates — he’s vindictive,” said McKee of Cuomo. As for the mayor, McKee said he deserves some blame for not realizing he was bound to come under some scrutiny for his personal nonprofit aimed at pushing his progressive agenda, The Campaign for One New York.
Mayor de Blasio has appointed two new members to the nine-member Rent Guidelines Board, a new chair and a new owner’s representative.
The two appointments – new chair Kathleen Roberts, a former United States Magistrate Judge, and owner rep Mary Serafy – “have years of experience in both the public and private sectors,” the mayor said in a press release on Tuesday.
The Rent Guidelines Board is responsible for determining rent increases for around one million apartments in the city each year, last year issuing its first ever rent freeze for tenants signing one-year leases.
In an official statement, the mayor said, “Judge Kathleen Roberts has years of experience serving New Yorkers as a United States Magistrate Judge and Assistant United States Attorney in the Criminal and Civil Divisions. Likewise, Ms. Serafy is well-versed in the field of housing, planning and development in both the public and private sectors.
“I’m confident that their addition to the Rent Guidelines Board will serve New Yorkers well – tenants and landlords alike – in establishing rent adjustments that are fair and grounded in real-life conditions in our neighborhoods.”
By Sabina Mollot
On Monday, one of Albany’s former famed three men in a room, Sheldon Silver, was convicted on corruption charges, for a bribery and kickback scheme that netted him $4 million. Part of the scheme involved the Lower East Side pol using his influence to benefit two real estate developers, in particular Glenwood Management, while at the same time positioning himself as being tenant-friendly. He also directed taxpayer money to a cancer researcher while a doctor there steered patients suffering from asbestos exposure to a law firm that paid Silver referral fees.
However, his failure to sway a jury of his innocence won’t be enough to prompt Albany’s remaining power players to renounce their ways by pushing for campaign finance reform or the closure of the “LLC Loophole.”
Mike McKee, the outspoken treasurer of TenantsPAC, told Town & Village on Tuesday of this gloomy forecast, predicting things will be as they were before, with the onus on tenants to put pressure of their local elected leaders to make meaningful changes. Otherwise, forget it.
“I would hope,” McKee said, “that this would be a wakeup call to the public that something is fundamentally wrong with our system of government, and unless people start holding legislators accountable, the pay-to-play culture is not going to change ever. Why would it change?”
Following the conviction, Governor Cuomo promised some ethics reforms, according to news reports. (His office did not respond to a request for comment.) But when T&V asked McKee if he thought the embarrassment of an Albany ex-kingpin facing jail time might make the governor regret his decision to shut down his commission aimed at rooting out corruption, McKee laughed.
“I don’t think so,” he said. “Andrew Cuomo’s agenda is Andrew Cuomo. He has benefitted more than anyone from the system we have. He got more money from Glenwood than anyone else. When the Moreland Commission started investigating his fundraising, that’s when he shut it down. I really wish it’s going to change but it won’t unless constituents put on the pressure. Every time you see an elected official you have to ask, ‘What are you doing about campaign finance reform and the LLC Loophole and the election system so people can actually run against incumbents?’”
State Senator Brad Hoylman, however, disagreed with McKee, saying the Silver bombshell might be what it takes to get even his own house, where tenant-friendly legislation goes to die, to pass meaningful reforms.
“This is Albany’s Watergate moment,” said Hoylman. “I think this is a seismic event that has the potential to disrupt business as usual in Albany. The issue of outside income is key. The fact that Silver was able to take in $4 million in referral fees is on its face outrageous and is something we should consider ending.”
Hoylman said he’s been pushing for an end to this practice since his first year in office.
“It’s not a coincidence Congress came to this conclusion after Watergate,” he added. “The other key fact in the Silver case is the exploitation by real estate companies of limited liability corporations. The LLC Loophole is the primary vehicle of the real estate industry to hold sway over the legislature.”
The so-called LLC Loophole is a regulation that allows companies to make political donations for every limited liability corporation they run and real estate developers often have LLCs for each property they own.
“I think this is something we learned in the Silver case and I believe this issue is going to pick up steam — even in my house,” said Hoylman. “I think the public is rightfully outraged by what they’ve been hearing from the courthouse in Lower Manhattan.”
Earlier this year, Hoylman authored legislation that would make it a class C felony or a public servant to steer grants towards organizations that benefit their families or people they have business relationships with.
Assembly Member Brian Kavanagh, who’s been pushing to close the LLC Loophole, did not respond to a request for comment on the Silver conviction.
As a result of the conviction, Silver must give up the Assembly seat he’s held onto for four decades. By Tuesday morning, Silver’s official Assembly web page was down. A spokesperson for the Assembly said she’d pass on a request for comment, but admitted she didn’t know who’d be handling Silver-related queries. One of Silver’s trial attorneys, Steven Molo, didn’t respond to a request for comment although he did tell Real Estate Weekly he’d be appealing.
“Weʼre obviously very disappointed and we had hoped the jury would see it our way,ˮ Molo said. “We are sorry that they didn’t but we believe that we’re on strong legal ground.ˮ
Assembly Member Carl Heastie, Governor Andrew Cuomo and Senate Majority Leader John Flanagan (Photo via Governor Cuomo Flickr)
By Sabina Mollot
Last week’s deal on the rent laws and other major issues, promptly dubbed the “Big Ugly,” was blasted by tenants even before it was finalized last Thursday, for including only minor changes in the rent laws, like raising the vacancy deregulation rent threshold from $2,500 to $2,700.
And while the newly slightly strengthened rent laws will remain in place until 2019, tenant activists are now more interested in 2016. The reason is that because it’s a presidential election year, on Election Day, that will mean more bodies at the polls than the amount that would normally show up for local races. At that time the goal will be to turn the Republican-controlled Senate into a Democratic one.
Mike McKee, treasurer of TenantsPAC, believes if this happens, tenant-friendly legislation could start getting passed as early as January, 2017.
“The legislators can amend the law at any time,” he said. “Even with a Republican governor like Andrew Cuomo, we can revisit this issue and repeal vacancy decontrol and other issues.”
There are 63 State Senate seats, and McKee said at this point, TenantsPAC is not sure which districts to focus its efforts on for supporting candidates. However, this will be a goal over the coming months.