Legislating Stability

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Tenants’ fight to restore muscle to New York’s rent laws took a step forward on March 12, when Republican state senators introduced a bill that would extend rent regulations through 2008 and eliminate vacancy decontrol, a contentious provision that allows landlords to deregulate apartments once the rents reach $2,000.

“Repeal of vacancy decontrol is necessary simply to preserve the rent regulation system,” Senator Frank Padavan of Queens, the bill’s sponsor, wrote prefacing the legislation. Noting that a recent study found that more than 100,000 apartments have been deregulated over the last few years, Padavan concluded: “High-rent vacancy decontrol has become de facto full vacancy decontrol.” Republicans Olga Mendez, Guy Velella and Nick Spano are also sponsoring the bill.

In February, the Democrat-led state Assembly passed an identical bill. In addition to undoing vacancy decontrol, both bills also reverse or scale back other landlord-friendly provisions the state legislature introduced when it last renewed the rent laws in 1997, including one allowing owners to claim apartments for their own family’s use.

But in addition to rolling back the clock, the bills also call for a significant new expansion of tenant rights: They attempt to protect residents of Mitchell-Lama buildings by requiring that all these properties become rent stabilized once an owner buys out of the state-subsidized program.

That measure could be a lifeline for nearly 105,000 Mitchell-Lama tenants statewide who are running out of options for holding on to their low-cost apartments. Under a 1955 state law, private building owners and developers who agreed to seek approval for all rent increases, and limit their profits to 6 percent, received tax breaks and low-interest loans. But after 20 years, landlords reserved the right to pay off their mortgages–and convert their buildings into market-rate housing.

So far, owners of Mitchell-Lama buildings have not been throwing residents out on the street when they buy out of the program; largely, they are agreeing to raise rents slowly for at least several years. For low- and moderate-income tenants, the city has made federal housing vouchers available to pay the difference between what the tenants can afford and what the landlord is now charging.

But once they become vacant, those apartments go for market rents. And soon, federal housing vouchers may be sharply limited, if Congress gets its way. That’s why tenant advocates are now looking to the state’s rent laws for salvation. To make their case, they’ll have to look no further than West Side Manor.

A 245-unit apartment complex on West 95th Street, West Side Manor is a Mitchell-Lama that will be protected by rent stabilization after its buyout–a legal status shared only by buildings constructed before 1974. In October 2000, residents received word: After 30 years in Mitchell-Lama, the building’s owner, the Lefrak Organization, was filing a federal lawsuit to get out of the program. More ominously, that suit also sought to pull the buildings out of rent stabilization–letting the landlord push rents as high as the market would bear.

West Side Manor tenants didn’t just rely on the blessing that their complex was built in 1969. They mobilized. Word spread quickly that if Lefrak prevailed in their lawsuit–which argued that the Mitchell-Lama program was unconstitutional–rents could at least double overnight. “We have many tenants who would simply be forced out,” says David Kotelchuck, co-chair of the tenant association.

So they went door-to-door, seeking money for “the best attorney we could afford,” says Kotelchuck–Stuart Saft, a top housing lawyer. Their investment paid off. In June 2001, a judge dismissed Lefrak’s suit.

West Side Manor tenants know they’re lucky. At worst, their rents will go up by an average of just 2 to 5 percent a year. But will Albany now protect other Mitchell-Lamas? There’s room for optimism. The proposal to extend rent stabilization to the whole program has passed the Assembly for each of the past 15 years, but it has never even been introduced in the Senate. And Padavan and Vellella are close allies of Republican leader Joe Bruno–one of the three men with the power to decide what happens to New York’s rent laws.