Overhaul Proposed For Rent-Setting Process

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If it’s spring, it must be time for the ritual tug of war between landlords and tenants at the Rent Guidelines Board, which determines rent adjustments and other rules governing rent-stabilized apartments in New York City. But if a new effort called the Real Rent Reform Campaign has any say, this year’s version may be the last.

Before the board holds its next public meeting on Friday, May 2, housing advocates and legislative sponsors – State Senator Thomas K. Duane, a Manhattan Democrat, and Assemblyman George Latimer, a Democrat representing parts of Westchester – will announce the Rent Board Reform Bill. The bill would overhaul the process for determining rents, putting an end to what both advocates and real estate interests see as an annual charade that always ends up giving too much to the other side.

The board will hold a preliminary vote next Monday, May 5, followed by public meetings in Brooklyn and Manhattan. But many advocates who have long attended these meetings are disheartened by the process and say they already know what will happen when the final votes are cast on June 19: The board will raise rents, after a process they think is shaped more by landlords’ fears than tenants’ realities.

Dorris Scott, a 60-year-old Bronx resident who works at Yankee Stadium and is involved with the Bronx-based housing organization Community Action for Safe Apartments, has been attending hearings and board votes for last three years. “It’s the same identical ritual. It doesn’t change,” Scott said.

The bill – set to be announced at a press conference May 1, and introduced in the State Assembly and Senate next week — would affect rent-stabilized apartments in New York City as well as Nassau, Rockland and Westchester counties; change the way board members are selected; repeal the law allowing landlords a rent increase of 20 percent or more on vacant apartments; and eliminate leases for rent-stabilized apartments, replacing them with statutory tenancy rules.

“Basically, we’re going to be shaking up the entire system,” said Michael McKee, treasurer of Tenants PAC, one of about 25 tenant advocacy groups active in the Real Rent Reform Campaign.

As it stands, the state’s four guideline boards – one each for New York City and the three suburban counties – are each made up of five public members, two landlord advocates and two tenant advocates, all appointed by the mayor. Anderson Fils-Aime, rent regulations campaign manager for Tenants and Neighbors (also part of the campaign) says the current setup has resulted in years of five-to-four votes, with the five public members voting as a bloc against two tenant and two landlord representatives. Both landlord and tenant representatives tend to vote against proposed changes, albeit for different reasons: Landlords see rent increases as too low while tenants regard them as too high. According to Rent Guidelines Board Executive Director Andrew McLaughlin, all five public members have voted together to approve the new rent increases for at least the last three years.

“There’s no way to address this issue if the process doesn’t get more democratic,” Fils-Aime said.

Under the bill’s proposed new rules, power would be redistributed to three public members, three tenant advocates and three landlord advocates. “By having three, three and three you force the public members to negotiate with somebody,” says McKee. The qualifications for public members would also be expanded since only those with backgrounds in housing, economics or finance are currently considered. Sen. Duane chief of staff Laura Morrison said, “You’d have a board that’s more diversified. It will be more representative. We believe it will be more fair and balanced and ensure that the voices of all New Yorkers are heard.”

If the bill passes, nominated public members would require approval by City Council, which advocates think would create greater accountability. “It means if we get screwed because of the kind of people the mayor appoints to the board, we can organize and mobilize,” McKee said.

High rent vacancy decontrol – the process by which stabilized apartments eventually are deregulated when rent reaches $2,000 – also is addressed in the bill.

When rent-stabilized apartments become vacant, landlords can automatically increase the rent by 20 percent or more and there is no limit to the number of times they can collect the vacancy bonus each year. But the new rules would limit the rent increase to a maximum of 5 percent, and the number of times landlords could collect it on a particular apartment, to once a year. According to Dennis Hanratty, executive director of Mount Vernon United Tenants, which is working on the campaign in Westchester, vacancy decontrol has a long history of giving landlords one more reason to raise rents, whether legally or illegally. “We’ve got to remove that incentive,” Hanratty said.

Losing stabilized apartments through high rent vacancy decontrol is a problem throughout the city and is increasingly becoming a problem in Westchester, he said. According to the Real Rent Reform Campaign, the city and three suburban counties have lost at least 200,000 apartments this way. Hanratty said he is heartened to see Assemblyman Latimer as the lead sponsor of the legislation—which includes Westchester, Nassau and Rockland variations of the changes proposed for inside the city limits. “I think it’s symbolically important…it’s not just a New York City thing,” he said.

The lease renewal system under the New York City Rent Stabilization Law and the Emergency Tenant Protection Act of 1974 is also scrapped in the bill. Instead of signing leases, rent-stabilized tenants would be able to remain in their apartments for as long as they abide by the rules, as is the case under rent control. (Rent-controlled apartments, which generally were built before 1947, are regulated by the state Division of Housing and Community Renewal.)

“People do not understand that it’s the law that protects them, not the lease,” said McKee, speaking to how intimidating it can be for tenants when landlords refuse to sign their leases. “We want to decouple the issue of tenure from the issue of adjustments,” he said.

Jack Freund, executive vice president of the Rent Stabilization Association, a trade group for property owners, said he would also like to see the system changed – but differently.

“I think property owners are very frustrated by this process and the failure of being able to cover their increased costs through [it],” he said. (The RGB’s latest annual studies on increased costs and income, which inform the process, can be found here and here.)

But according to McKee, “Landlords are making more money than they were. They’re not unhappy. They pretend to be unhappy.”

Still, Freund says landlords and tenants are pitted against each other every year and the public members take on an inappropriate mediating role. “Perhaps it’s too democratic. This shouldn’t be a matter of politics,” he said. Instead he would like to see the vote eliminated. In its place he would have a formula that calculates increased costs and determines the rent increase. “I don’t think reconstituting the board gets you to any advantage except stalemates,” he said.

Proponents of the bill say they do not expect it to pass in the current legislative session. But they hope the Assembly will hold hearings and the bill will be signed into law next year if Democrats take control of the New York State Senate – a change the Democratic party, housing activists and many other advocates are fervently wishing and working toward. The Republican chairman of the State Senate Housing Committee, John J. Bonacic, could not be reached for comment.

The bill is part of a larger campaign. The Real Rent Reform Campaign’s legislative plan for 2008 includes legislation that would repeal the Urstadt Law and restore home rule powers to New York City, allowing the City Council and the mayor to adopt rent and eviction protection laws independent of the state. Another bill would re-regulate apartments that have been de-regulated because of high rent vacancy decontrol. A third bill would allow the city and suburban counties to declare a housing emergency, thus providing rent and eviction protections to residents of Mitchell-Lama and project-based Section 8 buildings whose landlords have opted out of the subsidy program.

If these measures seem dramatic, that may be the point. Scott, the Bronx tenant, said she got involved in the Real Rent Reform Campaign because today, “you’re doing the same identical thing and getting the same identical result.” Now, she said, “we have to do something different.”

– Kate Pastor

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