There wasn’t exactly what you’d call an air of revelation in the old City Hall Board of Estimate Chamber when a testy throng of elderly tenants, rumpled landlords, politicians and reporters gathered to hear the official mid-March pronouncement from the Giuliani administration that, yes, the city is still in a housing crisis.

It’s not as if anybody was there to do anything new about it. The crowd had come to hear Richard Roberts, the new housing commissioner, give a formal statement that the city’s apartment vacancy rate is still below 5 percent–and that therefore, by state statute, rent regulations are still in effect.

Because upstate Republicans are threatening the elimination of rent stabilization and rent control when they come up for renewal in Albany this spring, Roberts’ declaration marked the official start of the triennial upstate-downstate contest over the future of rent regulation, a sort of ceremonial first pitch.

The importance of the rent regulation fight is not to be underestimated: more than half of New York renters live in a million rent-stabilized or rent-controlled units. The loss or erosion of rent protections would likely mean large rent hikes for multitudes across all economic and social classes. Yet behind this well-publicized political battle lurk increasingly frightening warning signs of a much more substantial crisis affecting millions of working-class and poor tenants.

“Everybody’s focusing on rent regulations as the key issue. Forget about rent regulations–you have a huge problem looming for affordable low-income housing,” says Michael Schill, director of NYU Law School’s Center for Real Estate and Social Policy. “You have rent increasing as a percentage of income and then you add welfare reform. It all hits low-income people.”

Schill’s observation is backed up by the numbers. According to preliminary data from the U.S. Census Bureau’s Housing and Vacancy Survey (HVS)–on which Roberts’ testimony was based–affordable housing in New York City is disappearing at an alarming and accelerating rate. Rents are exploding, tenants’ real incomes are falling and proposed cuts in state welfare benefits–which few people realize is the single most important housing subsidy for poor New Yorkers–could force thousands of public assistance tenants out of their homes.

All this, while the business of landlording has become almost as profitable as it was before the deep recession of the early 1990s, according to statistics just released by the Rent Guidelines Board.

The signs of the crisis are here. You just have to read them.

1. In the last three years, the city has lost 113,000 of its most affordable apartments.

The days of the $500 apartment are over, even though many New Yorkers can’t afford to pay even that much.

The new Housing and Vacancy Survey (HVS) found that the number of cheap apartments has taken a huge plunge since 1993. In fact, the number of units whose rent and utilities tallied less than $500 dropped from 566,000 in 1993 to 452,000 in 1996–a precipitous 20 percent fall.

The greatest drop in numbers took place in the $300-to-$400 range, with a loss of nearly 40,000 of the 133,000 apartments that rented in that low price range three years ago.

Analysts and community organizers say the numbers jibe with tales they’ve heard of rent hikes in poor and working class communities citywide. The loss is almost entirely attributable to rent hikes. Other factors contributed, including the loss of 30,000 rent-control units primarily due to the death or relocation of elderly tenants. Under state law, those apartments automatically revert to rent stabilization and are subject to significant rent increases.

It is surprising to hear that rents in poor neighborhoods would be rising rapidly, especially when the HVS itself shows that local poverty rates are apparently growing (See Number 3, below). The rent hikes in low-income housing appear to be clustered in areas that benefited from significant housing construction or renovation in the 1980s and early ’90s, such as Highbridge and Morrisania in the South Bronx and Fort Greene and East New York, according a Rent Guidelines Board summary of 1995 rent hikes.

According to an informal Daily News survey of 30 real estate brokers, one-bedroom apartment prices in parts of the South Bronx have shot from sub-$400 rents five years ago to an average of around $650 today.

“If you want to move into a nice place you are going to have to pay a lot,” says Dana Broussard, a 30-year-old Highbridge resident, who was forced to find a new apartment when her landlord jacked her rent from $572 to $700 last year. Broussard, who had been raising her four kids in a one-bedroom apartment on $1,200 a month in welfare and Food Stamps, was lucky enough to move into a three-bedroom apartment in a tenant-owned cooperative that costs around $450 a month.

Still, she knows many families who are stuck paying high rents even though they can’t really afford it. “If the building is new and clean, people don’t really mind. But people are paying $700 a month for rat holes,” she adds.

2. Citywide rents shot up 18.4 percent since 1993…

Even if poor renters are suffering the worst, rents across the board are rocketing skyward at a rate far outpacing inflation.

The HVS reports that the citywide median monthly rent, not including utilities and other expenses, increased 18.4 percent during the three-year survey. Meanwhile, the national Consumer Price Index inched up only 7.8 percent, thanks to historically low inflation rates.

How dramatic is that rent rise? Between 1981 and 1993–a 12-year stretch–New York’s median rent rose just $100 dollars in inflation-adjusted dollars. But from 1993 to 1996 alone, the median rent jumped nearly another $100, from $501 to $593 a month.

This acceleration is a very recent phenomenon. Between 1991 and 1993 the city’s median rent only increased by about 5 percent, and rent increases actually lagged behind the consumer price index.

Again, the reasons for across-the-board rent rises can’t be precisely explained until more detailed data comes in. But it is happening at a time when landlords have been taking greater profits, perhaps to compensate for the lean years of the early 1990s.

“Unless you own a bad building in a really poor neighborhood, it’s a great time to be a landlord,” says Ken Rosenfeld, a tenant member of the Rent Guidelines Board (RGB). “People are taking bigger profits on Wall Street and the economy’s a little better now, so I think landlords believe they, too, can take higher rents.”

Landlord expenses are shrinking for the first time in years: “[There has been a] remarkable drop in the ‘core’ rate of inflation for owners’….operating and maintenance costs,” reads the RGB’s report titled 1996 Rents, Markets and Trends. This month, the board–which is authorized under rent regulations to set rent increase guidelines for stabilized and controlled apartments each year–plans to release another report detailing the drop in landlord expenses and the increase in rent-hike profit-taking.

3.. . . while the real value of people’s paychecks is going down.

If most people were getting steady pay raises, the big rent hikes wouldn’t be such a disturbing phenomenon. But the real earning power of the average New York family continues to fall.

While Mayor Giuliani glowingly points to a growing economy, the fact is real incomes for New Yorkers declined by 2.3 percent between 1993 and 1996. There were killing blows leveled on wage earners in the early 1990s, when the city lost 330,000 jobs and real wages declined by nearly 12 percent adjusted for inflation. And in 1996, the economy generated only 23,000 new jobs, according to city Comptroller Alan Hevesi.

The net loss of jobs in the 1990s, combined with the continued decline in the value of paychecks, means more people are becoming poor even before the city embarks on federally mandated welfare reform. Indeed, between 1993 and 1996 the number of rental households with incomes below the federal poverty line increased to 628,000, or almost one-third of all renters. This is 40,000 more than in 1993, and all of them are barely scraping by.

4. Forget new hikes, people can’t even afford the rents they’re paying right now.

Add shrinking incomes to skyrocketing rents and what do you get? A fast-tightening vise squeezing tenants’ budgets.

In what is probably the most telling single statistic in the HVS, the percentage of income New Yorkers use to pay their rent and utilities has jumped from 30.8 percent to 32.8 percent in the last three years. Factor in the 2.3 percent increase that took place between 1991 and 1993, and you have the most rapid erosion of housing affordability in New York since the cataclysmic housing abandonment era in the mid-’70s. Ironically, housing was a lot more affordable then, since at that time rents typically cost people only a quarter of their income.

In fact, when held to the longtime federal affordability standard–which considers rents at an appropriate level if they are set no higher than 30 percent of a family’s income–New York is now an officially unaffordable city. “The bad news on the income-to-rent ratio is the thing that really stands out this year,” says Columbia University urban planning professor Peter Marcuse, who has long studied the city’s housing policy. “There’s the crisis.”

Although neighborhood-by-neighborhood affordability information hasn’t yet been released, the picture in 1993 was dismal enough. The poorest tenants, according to the survey, were paying nearly three-quarters of their income on basic shelter, and some unlucky souls were actually spending more on rent than they brought home. Nor was the rent-income squeeze felt by the very poor alone: In 1993, working-class renters not covered by rent regulation were shelling out, on average, nearly half of their pay in rent.

“And that’s going to keep getting worse,” Marcuse predicted.

But at least we’re not alone in our suffering. “It’s not just a New York thing,” Michael Schill adds. “It continues a trend in cities throughout the United States. Paychecks are going down and rents are going up.”

5. Governor Pataki’s welfare cuts could triple the number of homeless New Yorkers.

Most people think of welfare as walking-around money for food, clothing, utility bills and other expenses. In fact, it’s the city’s largest but least recognized low-income housing subsidy.

According to two chilling new reports, Governor George Pataki’s proposed welfare reform measure will eliminate much of that assistance and potentially throw tens of thousands of the poor onto the streets.

In addition to the federal mandate for a five-year lifetime limit on benefits, Pataki has proposed cutting welfare payments for longtime recipients by 15 to 45 percent over the next four years. In addition, he has opted for a “housing allowance consolidation plan” that will likely lead to the elimination of the $75 million Jiggetts benefit, a court-ordered relief program that provides much-needed rent payments to more than 25,000 public assistance recipients threatened with imminent eviction.

The Community Service Society, a research and social service organization, estimates that of the $2.4 billion paid out in welfare benefits to nearly a million city public assistance recipients, $1.4 billion covers housing costs. Since most of those on the rolls live in privately owned apartments, welfare tenants pay a remarkably high 57 percent of their incomes on rent, according to CSS.

The Citizens Housing and Planning Council, a more business-oriented housing research group, recently convened a committee including representatives of the real estate industry and bank executives–and they reached conclusions similar to those presented by CSS. Pataki’s welfare scheme, CHPC said, “could displace thousands of public assistance tenants.”

If the Pataki cuts are enacted, CHPC predicts the number of people seeking lodging at city homeless shelters will triple from 9,400 this year to 30,000 in 2002.

“The impact of [Pataki’s] welfare-to-work plan on housing will be disastrous,” says Frank Braconi, CHPC’s executive director. “It would be wonderful if you could move half a million welfare recipients into well-paying jobs, as the governor plans to do. But you look at the job market and you know there aren’t enough jobs for people to be able to pay their rents.”

If that all sounds a trifle apocalyptic, then just look to Michigan, says housing analyst Victor Bach, author of the CSS study. He points to a 1994 report showing that when Michigan terminated general assistance–the equivalent of New York’s Home Relief program for childless adults–the homelessness rate among recipients rose from 2 percent to 25 percent.

“The city will experience an escalation in precarious doubled-up situations and growing demand for emergency shelter,” Bach writes in the CSS report. “Neighborhoods with high concentrations of assisted households will suffer devastation as curtailed rent streams worsen the spread of housing deterioration, owner disinvestment and abandonment, and decline of the local retail economy.”

6. The city’s In Rem policy has created a “permanent underclass” of over 10,000 deteriorating apartment buildings in poor neighborhoods.

In a triumphant press release accompanying the HVS, Mayor Rudolph Giuliani trumpeted the fact that vacancy rates for low-rent apartments had increased. “[T]he vacancy [percentage] for low-rent units increased considerably between 1993 and 1996.”

On the surface, that seems like good news, as though it’s easier for poor people to find cheap apartments. But it’s not. The administration’s spin is deceptive. While the percentage of low-rent apartments may have spiked statistically, the total number of low-rent units has dwindled to an all-time low. The net result: There are fewer low-rent vacancies, not more.

Says Rosenfeld: “You’ve got poor people getting poorer. You’ve got a shrinking low-income housing stock. You’ve got landlords complaining that they don’t make enough money to run their buildings in very poor neighborhoods. So, all of a sudden you have a huge rise in the vacancy percentages? It doesn’t make sense.”

Part of the explanation is a statistical glitch. In 1993, because of a one-time sampling problem, the city was unable to quantify the number of vacancies for apartments renting for $400 a month. In fact, an examination of the 1991 vacancy data compared to the 1996 HVS shows that there was actually a significant decrease in the number of sub-$500 vacancies over the intervening years.

And Peter Marcuse thinks he’s found another, more ominous, explanation: some buildings are so bad no one wants to live in them. “There’s a good chance poor people just don’t want to take these units,” he says. “We’ve allowed a class of buildings to run down to the point where they are almost uninhabitable but not quite abandoned.”

The numbers seem to back him up. Although the vast majority of buildings on the survey reported tolerable structural conditions, the HVS also reports slight increases in the dilapidation rates and in the number of buildings with major maintenance problems.

Marcuse argues that these numbers indicate there is a hardening division between the good housing stock and the permanent “underclass” of deteriorating apartment buildings in poor neighborhoods.

The existence of the distressed buildings is borne out by an analysis of tax records by Frank Braconi, who found the number of apartment building in tax arrears has been at around 14,000 for several years. “I think that it’s a good rough measure of the number of buildings that seem to be in trouble,” he said.

In years past, the city would have taken these buildings under In Rem tax foreclosure and, over time, applied federal and city funds to their maintenance and renovation. But since 1994, when Mayor Giuliani announced a permanent stop to tax-arrears vesting, those buildings have languished in limbo while the city figures out what to do with them. Last month, City Limits reported that HPD’s anti-abandonment program, which would have transferred many of these buildings to responsible third-party landlords or nonprofit groups, was foundering for lack of funding and planning.

7. Worsening cutbacks in federal housing aid mean less money to help fix bad buildings or help the poor stay under a roof.

New York relies heavily on federal money to subsidize affordable housing. About 40,000 households on welfare receive Section 8 vouchers to help pay their rent on the private market, as do tens of thousands more low-income working people.

But the federal money faucet has been fitted with a new cut-off valve. Last year, for the first time in more than 20 years, Congress and President Clinton zeroed-out a proposed increase in the number of Section 8 rent vouchers. With no new vouchers available, tenants have to wait for current voucher holders to die or become ineligible under the income guidelines.

In New York City, the waiting list for Section 8 vouchers is 236,000 families long–every one of them qualified for the program under federal rules.

According to a recent analysis by the National Low-Income Housing Coalition, Congress cut funding for poor tenants from $24.9 billion in 1992 to $15.7 billion this year.

“If this continues, it’s going to have disastrous effects,” predicts Jay Small, executive director of the Association for Neighborhood and Housing Development. “Government has to recognize that providing decent housing is a core function again.”