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CITY COUNCIL CITY OF NEW YORK -----------------------------------X THE TRANSCRIPT OF THE MINUTES of the COMMITTEE ON HOUSING AND BUILDINGS -----------------------------------X March 11, 1997 Start: 1:10 p.m. Recess: 8:00 p.m. City Council Public Hearing Chambers New York, New York BEFORE: Archie Spigner Chairperson APPEARANCES: COUNCIL MEMBERS: Stanley E. Michels Antonio Pagan Thomas V. Ognibene Guillermo Linares Kathryn M. Freed C. Virginia Fields Helen Marshall Thomas X. Duane Stephen DiBrienza Richard Roberts Department of Housing Preservation and Development Moon Wha Lee Department of Housing Preservation and Development Fernando Ferrer Brooklyn Borough President Tobi Koffer Office of Senator Deborah Glick Kathy Kinsella Office of Assemblyman Richard Gottfried Karen Lin Office of Senator Catherine Abate Meg Block Office of Senator Franz Leichter Richard Anderson New York Building Congress James Cobb Local 1219 District Council 37 Barry Jacobson Local 154 District Council 37 Gloria Freedman District Council 37 Jenny Laurie Met Council on Housing Michael McKee New York State Tenants and Neighbors Robert Katz Queens League of United Tenants Joseph Strasburg Rent Stabilization Association Marolyn Davenport Real Estate Board of New York Oda Friedheim Legal Aid Society Julia Murray Legal Aid Society Deanne D'Aloia Association for Neighborhood and Housing Development Julio Muniz Citywide Task Force on Housing Court David Robinson Legal Services for New York Michael Laub Bronx Realty Advisory Board Dan Margulies Community Housing Improvement Project Nunzio Del Greco Bronx Board of Realtors Bonnie Haber Community Housing Improvement Project Karen Stamm East Side SRO Legal Services Project Adrian DiLollo West Side SRO Law Project Adam Weinstein West Side SRO Law Project Raquel Cook Brown Small Property Owners of New York Helen Daniels Black and Latino Coalition Ida Harnden Joint Public Affairs Committee for Older Adults Gail Bell Valerio Orselli Cooper Square Committee Colin Rudd Marcy Boucher Paula Glatzer Richard Martin Marilyn Percy Richard Faulkner Tim Collins Vincent Castellano Minerva Dorham Loren Renz Cynthia Colter Office of Manhattan Borough President Ruth Messinger Dennis Griggs John Stanley Thomas Ligon Walter Gambin SRO Tenants United James Bradshaw Dawn Sullivan Mary Margaret Amato Jane Wood Chelsea Coalition on Housing Meryl Stein Chelsea Housing Group Anne Cunningham Commander Hotel Tenants Association Katherine Callaghan Kernan Huttick Chelsea United for Tenants Rights Alex Staber Brooklyn-wide Interagency Council of the Aging Robert Widman Anita Romm Florence Daniels Kevin Breen Hudson Herring * * * * * * * * * CHAIRPERSON SPIGNER: Good afternoon. I'm Council Member Archie Spigner and I chair the Committee on Housing and Buildings. Today the committee will be considering two items, Resolution 2177 and Intro 920. Together, these items extend rent control and rent stabilization without any changes. Resolution 211 determines that a housing emergency requiring rent control in the City of New York continues to exist and will continue to exist after April 1, 1997. Intro 920 extends the rent stabilization law of 1969 from April 1, 1997 to April 1, 2000. Pursuant to state law, the Council is to determine on or before April 1st of every third year beginning in 1967 whether or not there exists a public emergency requiring the continued regulation and control of residential rents and evictions. Such a determination is to be made following the submission to the Council by the Mayor of a survey of the supply of housing accommodations within the city, the condition of such accommodations and the need to continue regulation and control of residential rents and evictions within the city. A report indicating a citywide vacancy rate of 4.01 percent was prepared by the Department of Housing Preservation and Development for the period between March and June of 1996. The rental vacancy rate is calculated by dividing the number of vacant available for rent units, that are not dilapidated, by the number of renter occupied units plus the number of vacant available for rent housing units, that are not dilapidated. When an emergency was last declared in 1994, the net citywide rental vacancy rate for the first quarter of 1993 was 3.44 percent. There were approximately 81,000 vacant available rental units in New York City as of the survey period, an increase of approximately 11,000 units since 1993. The number of housing units in the city since 1993 has increased slightly from 2.986 million to 2.995 million, while the total number of rental units for the same period has decreased slightly from approximately 2.05 million to approximately 2.03 million rental units. In 1996 units subject to rent control made up approximately 3.6 percent of the occupied rental stock, or 71,000 units, while in 1993 there were approximately 102,000 rent controlled units, a decline of approximately 31,000 units, or 31 percent. The survey also notes that the median monthly gross rent, including utility payments, increased 14.3 percent from $551 in 1993 to 3630 in 1996. However, the inflation adjusted increase in median gross rent was only 6.1 percent. Today the committee will hear comments on Intro 920 and Resolution 2177. I would like to welcome the new commissioner of HPD, Commissioner Richard Roberts. Commissioner, are you present? We will be happy to hear your testimony. COMMISSIONER R. ROBERTS: Good morning. CHAIRPERSON SPIGNER: Good morning and welcome, Commissioner. COMMISSIONER R. ROBERTS: Thank you very much. My name is Richard Roberts, the commissioner of the Department of Housing Preservation and Development. I just want to extend hello to the committee. I look forward to working with you in the future. And this is the first time I've appeared before you and I'm going to present the findings of the report and we can get on with it. CHAIRPERSON SPIGNER: Before you begin, Commissioner, since you're new and we want you to recognize some familiar faces with the rest of us, starting on the far right, Council Member Andrew Eristoff from Manhattan; Council Member Martin Malave-Dilan from Brooklyn; Council Member Guillermo Linares from Manhattan; the senior member of the committee, Stanley Michels, also chairman of the Environmental Protection Committee. The young man sitting next to me is Anthony Baronci, the counsel to the committee. On my left, the leader of the minorities, the Republicans, that is, Council Member Thomas Ognibene from Queens; followed by Council Member Enoch Williams, the chair of the Health Committee; and Council Member Sal Albanese from Brooklyn. You may continue. COMMISSIONER R. ROBERTS: Good morning. Thank you for this opportunity to appear before the Committee on Housing and Buildings and members of the public today to testify in strong support of Resolution No. 2177 and Intro 920. These measures would constitute the local determination as to the continuation of the housing emergency in the city and would permit the extension of the rent control and rent stabilization laws in the city for three more years. This local determination is required to be made by the City Council on or before April 1st. The purpose of my testimony today is to present the initial results of the city's tenth Housing and Vacancy Survey, or HVS. This survey of the city's housing stock has been carried out over a 30 year period starting in 1965, and the methodology has remained constant since that time. Joining me is Dr. Moon Wha Lee, assistant commissioner for policy analysis and research, who oversaw the development of the HVS and will be able to answer questions as to the methodology used in this survey. To provide the basis for the Council's declaration of emergency, the law sets forth the obligation of the city to conduct every three years a survey of the supply of housing accommodations, the condition of such accommodations, and the need for continuing the regulation and control of residential rents and evictions in the city, and requires that the results of the survey be presented to the City Council. As in all survey years since he first in 1965, the city has turned to the U.S. Bureau of the Census to undertake the 1996 New York City Housing and Vacancy Survey to estimate the vacancy rate for rental housing and the supply and condition of housing accommodations in the city. According to the survey, conducted between March and June of 1996, the rental vacancy rate for the period was 4.01 percent, which is well below the five percent vacancy rate threshold set forth in the statute as the standard for a determination that a housing emergency continues to exist in the city. In addition, the 1996 HVS reports that the shortage of affordable rental units for low income households in the city was severe. The vacancy rate in 1996 for units with asking rents of less than $300 was 1.46 percent. For units with rents at $300 and $399 and $400 to $499 the vacancy rates were 3.59 percent and 3.20 percent, respectively. Vacancy rates for units with asking rents between $600 and $899 in 1996 were over 5.00 percent. The vacancy rates for $600 to $699, $700 to $799, and $800 to $899 were 5.10 percent, 5.20 percent and 5.81 percent, respectively. However, the vacancy rates for units with asking rents of $900 or more were below 5.00 percent, 3.3 percent for $900 to $999, 4.65 percent for $1,000 to $1.250, and 2.47 percent for units renting for $1,249 or more. The survey also reports that the number of housing units in the city has remained relatively stable, from 2,986,000 in 1993 to 2,995,000 in 1996. The number of rental units was 2,027,000, comprising 68 percent of the housing stock in 1996. Rent controlled units numbered 71,000, or 3.6 percent, of the occupied rental stock in 1996. They housed 127,000 city residents. Rent stabilized units, occupied and vacant, numbered 1,052,000, which was 52 percent of the rental stock in 1996. They housed 2.4 million persons. The structural and maintenance condition of the city's rental housing remains very good. The percent of renter occupied units in buildings with no building defects was 88.6 percent in 1996 compared to 89.3 percent in 1993, and only 1.3 percent of renter occupied units were in dilapidated buildings in 1996, about the same as the 1993 dilapidation rate of 1.2 percent. The proportion of renter occupied units with no heating breakdowns stayed the same, at 79.9 percent in 1993 and 80.4 percent in 1996. The percent of rental units with no maintenance deficiencies was 41.0 percent in 1993 and 42.1 percent in 1996. Neighborhood quality noticeably improved from 1993 to 1996. The proportion of renter households who rated the quality of residential structures in their neighborhood as good or excellent increased from 61.8 percent to 63.9 percent between 1993 and 1996. The proportion of renter households near buildings with broken or boarded up windows on the same street declined from 13.7 percent in 1993 to 11.4 percent in 1996. This rate is 51 percent lower than in 1981, when it was 23.3 percent. According to the 1996 HVS, the crowding situation remained the same as in 1993. In 1993, 10.3 percent of renter households were crowded, that is, more than one person per room. This is identical to the rate of 1993. The 1996 HVS reports that the real incomes of New Yorkers remained virtually the same between 1992 and 1995. The inflation adjusted median income for all households was $24,871 in 1992 and $25,000 in 1995. The median income of renters, however, decreased slightly, by 2.7 percent, after adjusting for inflation, between 1992 and 1995. The inflation adjusted median gross rent, including utility payments, increased by 6.1 percent between 1993 and 1996. The inflation adjusted median contract rent, which excludes tenants' payments for utilities, increased by 9.8 percent. Rent burdens increased between 1993 and 1996. The median gross rent/income ratio increased from 30.8 percent to 32.3 percent. As the 1996 HVS shows, while the inventory of residential units has remained stable, structural and maintenance conditions remained very good, and the quality of neighborhood conditions improved. However, there are still significant housing shortages and there is still much to be done to provide decent, affordable rental housing for low income households in New York City. The Census Bureau's 1996 HVS data clearly indicate the continuing serious rental housing shortage in New York City. Given this shortage, the standards for continuing rent control and rent stabilization in the city have been met and dictate that both be extended for another three years. Thank you, and it is our pleasure to answer any questions you may have. CHAIRPERSON SPIGNER: Thank you, Commissioner. Your testimony is very clear. I just want to ask one question. In your announcing of the report how do you make the conclusion the shortage on the upper end of the rental spectrum is a good deal more intense than our middle or lower range? COMMISSIONER R. ROBERTS: There are variances in all of the rental ranges. I'm not sure as to what the specific impact of the higher rental categories mean. We don't interpret the data, we merely conduct and commission the study and the study comes back and tells us what the conditions are, but we don't interpret it for purposes of this exercise. CHAIRPERSON SPIGNER: So when it says that there are a few broken window on the same street, significantly declined, you have to take that statement at face value unless we go out -- COMMISSIONER R. ROBERTS: That's a methodological question that the survey has been conducted the same way over the last 30 years. Those issues or indicators have been counted during --every time the survey is conducted, whether that's good news or bad news, it's news. And that's really what this is about -- CHAIRPERSON SPIGNER: And if you want to make good news out of you can make good news out of it. I guess the same thing could be said about the increase in the number of renters who feel that their housing situation is better -- COMMISSIONER R. ROBERTS: Those are survey results which are conducted every time. CHAIRPERSON SPIGNER: Council Member Michels. COUNCIL MEMBER MICHELS: Thank you, Mr. Chair. First of all, let me congratulate you, Commissioner, on becoming the new commissioner. Perhaps you haven't been sworn in yet but you're here and you're to be recognized as the commissioner. And I look forward to working with you on this and many other issues. COMMISSIONER R. ROBERTS: Thank you. COUNCIL MEMBER MICHELS: One of the things I'm going to ask you is about the housing survey, and I guess Mr. Lee will be there to help you on this subject. One of the questions is, why does the citywide vacancy rate go up when most people thought it would go down, and is there a perception that the market was tighter in 1996 than it was in 1993? COMMISSIONER R. ROBERTS: There are two factors which I will point to. The first is that in certain areas of the city there were some dramatic changes and an increase in the vacancy rates. Those areas of the city included parts of the southwest Bronx and in certain areas in community districts in central Brooklyn. And in addition, within certain categories, the Chairman's question related to the difference in certain categories, in certain rent levels, including the rent level between $600 and $699, we saw a dramatic increase in vacancy rates. COUNCIL MEMBER MICHELS: Now what we're talking about is apartments which are vacant and available for rent. Now it's my understanding, and I don't see any note in here, that the New York City Housing Authority took some two to 3,000 apartments off the market and that is being counted in this group and those apartments are vacant but they're not available for rent, and as far as I'm concerned they should not have been included in this survey. COMMISSIONER R. ROBERTS: You raise the question of the NYCHA apartments. COUNCIL MEMBER MICHELS: That's right. Do you know the numbers? COMMISSIONER R. ROBERTS: It's my understanding in reading of the survey the numbers are not specifically broken out or addressed. But I will say the following with respect to that, we haven't had the discussion with NYCHA and it's for them to discuss, but I think that there was a federal mandate having to do with them rehabilitating apartments for handicap access and the process of rehabilitating those apartments I think has created some difficulty with respect to apartments being vacant. I think that they would disagree as to whether the apartments were actually available and whether they should have been included in the survey. But it's a technical question and I think that the problem here is that we are bound by -- we have tried to conduct the survey with a uniform methodology over a period of several years, and that's the way the survey is conducted -- COUNCIL MEMBER MICHELS: I understand. This covers from March to June and you use from January to March of '96, and it was conducted by the census, but you contract with them and tell them what to do. It's very clear that these apartments are supposed to be vacant and available. Now if they're including in there thousands of apartments which are not available, whether it's disabled or other rehabilitation purposes, then this vacancy rate is to be questioned and it really should be more of a vacancy rate. COMMISSIONER R. ROBERTS: Again, without getting into the specifics of that, because, as I said, I don't know and we don't -- COUNCIL MEMBER MICHELS: I understand. I'm not blaming you -- COMMISSIONER R. ROBERTS: Let me say the following. Still at a four percent vacancy rate, we are still significantly below the threshold that is required to take the formal actions necessary in order to continue regulations, so I'll just stress that -- COUNCIL MEMBER MICHELS: I'm not telling you -- I'm just saying it's important that these figures are used for a lot of purposes and it's very important. On page 3 of the select findings it says rent went up. In other words, 9.8 percent or contract rents against 2.7 percent for income adjusting for inflation, what does this mean in terms of the effect on tenants' pocketbooks, in your opinion? COMMISSIONER R. ROBERTS: Well, again, I'd like to stay clear of trying to interpret the data, but I think that that speaks for itself with respect to those issues. But again, we would rather not interpret. COUNCIL MEMBER MICHELS: The fact is that people are less and less able to afford the rents that are being charged. COMMISSIONER R. ROBERTS: Again, I would like to avoid interpreting the data. COUNCIL MEMBER MICHELS: We have to, that's what the data is for, to interpret, and that's the interpretation I'm giving here and that's why this is very important for the people in the city. This is the trend and we see the same difference between 1991 and 1993 in the housing survey. MR. M. LEE: Strictly based on 1991, 1993 and 1996, we don't see any clear -- (inaudible) --but I think there is an increase in between 1993 and 1966. COUNCIL MEMBER MICHELS: I have a table showing the race and ethnicity of rent regulated tenants and the race and ethnicity of tenants living in all privately owned rental units in 1993. It shows that a majority of rent regulated tenants in 1993 were people of color and/or Spanish speaking. I did not find this information in the official study published by the city. Can HPD update this table using the 1996 numbers? And how soon can we get this table 7 And the figures are census figures in '93 which show that over 53.4 percent of the rent regulated apartments are occupied by black and African American and Puerto Rican and other Hispanics and Asians and others, so the great majority of these apartments that we're talking about, the rent regulated, are occupied by other than white, non-Hispanic people. MR. M. LEE: The numbers I think are from 1993. COUNCIL MEMBER MICHELS: We don't have those numbers, and I'm wondering why not. MR. M. LEE: When we see the final data we will be able to get it but we don't that have data yet. COMMISSIONER R. ROBERTS: Council Member, let me just clarify. We are merely providing the initial findings. The full fledged, the full blown report obviously has had that information in the past and -- COUNCIL MEMBER MICHELS: The reason this is important is because there's a myth out there that the rent regulation is trying to protect white rich people. The majority of the people we are trying to protect are poor people, non-white -- COUNCIL MEMBER PAGAN: What does race have to do with poverty or income levels? I take offense to that statement. Shame on you. CHAIRPERSON SPIGNER: Council Member Ognibene. COUNCIL MEMBER OGNIBENE: Thank you. Commissioner, just a few questions to clarify some of the issues. When I was going through the statistics, I noticed that for rentals between $600 and $900 there actually is no basis to declaring an emergency because those statistics show a vacancy rate of over five percent. In addition, in the lower rent category, where you find obviously your poorer constituency, there appears to be a low vacancy rate. But the question I want you to answer with regard to that is that the information that I've been supplied is that in most cases in those poorer housing areas the tenants that are there are unable to pay even the current rent stabilized rents. So would you answer, why declare an emergency from $600 to $900, and how can you declare an emergency and benefit the poor when they can't even pay existing rents? COMMISSIONER R. ROBERTS: Again, Council Member, my understanding is that what is required, the condition that is a prerequisite for establishing the emergency requires us to look at the aggregate and the rent levels from a variety of levels. And so we pull out and specify rent categories I think in order to provide information. But again, I don't think that it permits us to make emergency determinations as to whether the emergency exists with respect to specific rent levels. Instead we have to look at the entire picture, and that's what we presented here. Secondly -- COUNCIL MEMBER OGNIBENE: You have indicated though, providing affordable housing, I was just wondering, since you're the commissioner, how the poor are benefiting from the system if they can't even pay the existing rents. COMMISSIONER R. ROBERTS: We will -- our goal is to provide as much housing as we can throughout the city through a variety of different mechanisms. I think that the other findings that the survey indicates are the shortages that exist throughout the city, and my statement about providing housing related to the shortage conditions that we identified. Again, interpretive statements with respect to the rent regulation system is something that is not part of this exercise. We are merely trying to establish the fact that the conditions exit, and I think that's what we've done. COUNCIL MEMBER OGNIBENE: Let me ask you then, I notice when we do an aggregate there's a chart here and one of the categories, all other renter units, and I see included in there public housing, Mitchell-Lama, in rem and some others. I'm curious why when we compute the vacancy rate, and let me just go through it, public housing, which is for the poor, that would mostly be the category that rent stabilization wouldn't help and it's not stabilized so it has no bearing on the vacancy rate of stabilized apartments and is grossly backlogged. Mitchell-Lama, which is means tested and right now for most people that would be in Mitchell-Lama, no means testing for housing and in rem is curious because in rem property is deregulated property. It was housing that was regulated -- and when I say you, I mean you chose to deregulate it, and the answer that I often get when people from your department come in to testify is the reason you deregulate it is because the rents are not high enough to pay the operating costs. In order to continue a system of rent regulation, you're including properties which you deliberately deregulated because the rents are not sufficient to operate the buildings. Would you explain to me why they're included in the system? COMMISSIONER R. ROBERTS: The methodology of the survey involves us assessing all rentals on a citywide basis -- COUNCIL MEMBER OGNIBENE: Whose methodology? COMMISSIONER R. ROBERTS: This is the methodology that we've worked out with the Census Bureau over the course of the last 30 years -- COUNCIL MEMBER OGNIBENE: Why couldn't I have a vacancy rate computerized on available private and regulated housing, not including these statistics, so we could get an accurate picture? COMMISSIONER R. ROBERTS: I think the picture is accurate. We are not attempting to try to pull specific elements of the survey out in order to present or reach a conclusion one way or the other. But what our goal is here is to establish vacancy rates across all rental units throughout the city. We can compute that by bringing all of the units into the methodology and we come out with a number that is below five percent. That's the process by which we conduct the survey and we are not given the charge to pull out specific rental units, specific types of housing, and to utilize that number to demonstrate one point or another. COUNCIL MEMBER OGNIBENE: I understand. I thought that there would be a common sense basis for taking it out since they come under a different system of laws, a different system of regulation, and really had no bearing on the private housing market. Let me ask you, you had alluded to the fact that the cost of rent had gone up and that the cost of living had increased for renters. How much has the cost of operating real property in the City of New York gone up during that period? Do you make that part of your statistics, sir? COMMISSIONER R. ROBERTS: No, we do not. It's not part of the survey. It's not part of the survey. COUNCIL MEMBER OGNIBENE: Let me ask you another question. Do you think that it is the obligation of landlords and building owners to provide housing for the poor? COMMISSIONER R. ROBERTS: Again, in interpretive questions with respect to this report I think we are in the position to address those, but we don't take a position about -- I mean, our goal at HPD and part of HPD's mission is to look to as many sources as we can in order to provide housing for as many New Yorkers as we can. We certainly do some of that. NYCHA does some it. The private sector does a fair amount. Sure, I think we can have an intelligent discussion about the mix, the goals, the responsibilities of the various actors within the market. But I guess that would be my answer to the question. A lot of different entities play a role in providing that housing. COUNCIL MEMBER OGNIBENE: I only brought it up because you had mentioned affordable housing. Do you think that the obligation of government is to provide rent subsidies for wealthy people making more than $100,000 a year? COMMISSIONER R. ROBERTS: Again, that's not something I'm in a position to answer. COUNCIL MEMBER OGNIBENE: But clearly when you talk about affordable housing you're not including people making $100,000 a year. COMMISSIONER R. ROBERTS: We have a number of specific programs that have a number of stipulated and specified income guidelines and so forth. Those programs are specific to HPD and other providers. We'll certainly have opportunities to discuss those in the context of this -- COUNCIL MEMBER OGNIBENE: You have no means testing of income -- COMMISSIONER R. ROBERTS: I'm not saying that. I'm not getting into that. That's not what I said. This is my first day. You're just going places that -- COUNCIL MEMBER MICHELS: You'll get used to this. COUNCIL MEMBER OGNIBENE: And I'm sure you'll grow to love it too. (Disruption from the audience.) COUNCIL MEMBER OGNIBENE: You know, I can be treated like that at home, folks. The point is that you do have some sort of means testing within your own organization. It wouldn't be too inaccurate for me to suggest that there should be some form of the means testing, especially for wealthy people. (Disruption from the audience.) CHAIRPERSON SPIGNER: Please, there's no need for that. I'm just not going to permit that. We'll be here long enough without the interruptions. Permit me to announce the presence of Council Member Kathryn Freed and Council Member Joan McCabe, and on my left Council Member Antonio Pagan, Council Member Virginia Fields, Council Member Helen Marshall. Now we move on to Council Member Linares. COUNCIL MEMBER LINARES: Commissioner, welcome. COMMISSIONER R. ROBERTS: Thank you. COUNCIL MEMBER LINARES: I believe it was 1971 to 1974 that we experienced as a city deregulation and at that time when the commission was established and sort of began to take shape, as a result of deregulation, I understand that there was an immediate 300,000 families that were in the street without apartments and there was an immediate crisis in the City of New York which led to the current regulations and laws that we're now fighting to extend. Isn't it true that if we pursue deregulation that what we have in New York City is massive exodus of working people and middle class leaving the very wealthy and the poorest of the poor in our city? Wouldn't this be devastating for all of us? COMMISSIONER R. ROBERTS: Council Member, I'm going to skip to the results of the findings in the survey. That would be my response to that. COUNCIL MEMBER LINARES: You're here promoting the extension of this, and are you interested, is the Administration interested in conducting an in-depth analysis of the impact? Because we have to go and fight. This is just the first round. We have to go to the state legislators and argue what the devastation would be for them to dilute or to eliminate under the current laws and protections that we have for tenants. My question then becomes, is the Administration, since you're representing here the Administration, conducting an in-depth analysis that would clearly delineate the devastation and the impact that deregulations or elimination of these laws and regulations would have on our city? COMMISSIONER R. ROBERTS: I'm not aware of a specific study that has taken place in that regard. I would have two responses to that, one, that this Administration is responsible for preparing the findings in this report which served as the basis for the Council and the Mayor taking action to continue the current system in full force and effect for the next three years. Secondly, let me be clear that I think the Mayor's position on this is a clear one and that he is supportive of the current system continuing in force and without change. So those are my statements in response to that question. COUNCIL MEMBER LINARES: Let me just indicate that I think it's a good position to take but the fact of the matter is that we still have -- what this reflects is that we have a crisis in terms of housing, and my question is what is the Administration doing to address the crisis that we have. Because we have a lot of homeless, we have a situation that is intolerable. And the question also needs to be posed to the City Council as well, what are we doing to really address the crisis so that we don't continue the Band-Aid approach that we've been having -- CHAIRPERSON SPIGNER: Council Member, I don't want to limit you but certainly we're here to discuss a vacancy report that's on the table. And we could spend the rest of the week theorizing and philosophizing of whatever the root causes are but I don t think we have that much time. COUNCIL MEMBER LINARES: Mr. Chair, I think that the question is appropriate. I think we need to address the question, that's why we're here. Either we have a crisis or we don't have a crisis, and I say we have a crisis. I have a technical question pertaining to the survey. Why did the vacancy rate for apartments renting for less than $300 go up to -- why did they go up, and they went from .64 percent up to 1.46 percent, and the vacancy rate for apartments renting between $300 and $399 go up even more, from .91 percent up to 3.59 percent? Are there a large number of vacant rent stabilized apartments at this rent level? COMMISSIONER R. ROBERTS: Again, we present the findings of the -- you're absolutely right in terms of citing the changes in the statistics. It is not part of the survey methodology to interpret those statistics, that's not required. We merely indicate what the numbers are. COUNCIL MEMBER LINARES: Do you have a sense of what the vacancy rate was then in l991 and 1993? MR. M. LEE: Councilman, Table 5 -- CHAIRPERSON SPIGNER: You have to talk in to the microphone. MR. M. LEE: If you take a look at Table 5 in our report, 1993, the vacancy rate is so small we couldn't even show. In 1994, 3,290, we show that. The figure is for 3,399, in 1993 is too small. In '96 it's 4,896, somewhat increased. CHAIRPERSON SPIGNER: Do you want a second round, Council Member? COUNCIL MEMBER LINARES: Yes. CHAIRPERSON SPIGNER: Council Member Freed. COUNCIL MEMBER FREED: Thank you, Mr. Chair. And welcome, Commissioner. We're sorry to do this to you on your first day. I had a question. One of things I'm concerned about is the luxury decontrol that was, I think, mistakenly put in two years ago. Do we have statistics on how many units have been decontrolled under that law? MR. M. LEE: It's not designed to provide such numbers. COUNCIL MEMBER FREED: So if -- CHAIRPERSON SPIGNER: Excuse me, Council Member, we do have some statistics, 3,417 as a result of the vacancy, 2,000 and 1,700 as the result of the $250,000 annual income. COUNCIL MEMBER FREED: Well, how many of these are actually from Manhattan? Do we have it broken down by boroughs? All of them were from Manhattan? And people thought I was wrong when I said it was an anti-Manhattan move. Anyway, what I have heard in a number of areas, however, is that a number of the apartments that were vacant were vacant because of technical problems as opposed to really verifying the rent or the income, and I wonder how we track that and if anyone is keeping track of that. My understanding is DHCR, if the person, the technicality is being raised against that they can be evicted anyway whether they meet the rental or the income levels. CHAIRPERSON SPIGNER: Commissioner, do you want to respond to that? COMMISSIONER R. ROBERTS: That's part of the survey. COUNCIL MEMBER FREED: I wondered if I had an answer on that. CHAIRPERSON SPIGNER: The commissioner is on the stand and he can choose to answer or not. COUNCIL MEMBER FREED: Is there some way we can get that information? Because obviously some of us would like -- COMMISSIONER R. ROBERTS: HPD does not have -- does not compute or calculate those kinds of statistics -- COUNCIL MEMBER FREED: You don't think it would be interesting for us to find out since these units are basically being taken out of the affordable rentals? COMMISSIONER R. ROBERTS: Don't misunderstand me, I'm not saying it won't be interesting -- I mean, I think we would go to the state DHCR -- COUNCIL MEMBER FREED: Particularly since we're being asked, obviously, to approve this again and there are those of us who would like to go back to the way we were as opposed to extending it, and I think it might be helpful in our overall estimate of what's happening because I know in Manhattan because rents are very high, it is one of the problems with the whole vacancy decontrol, and some of the other statistics is that they don't look into who's in a unit. For instance, in a unit that may be over $2,000 a month rent, you may have three wage earners, like three people just out of college, and it made sense for them to go into this apartment. You may have a large family where you've got the two income earners plus maybe one of the children may be an income earner, and it doesn't look into the size of the units. And I think just passing laws that deal with monetary amounts alone or income amounts alone for the entire unit fails to reflect the entire picture. COMMISSIONER R. ROBERTS: Crowded conditions are the same but they're tabulated as part of the service. COUNCIL MEMBER FREED: But are they tabulated after they're decontrolled? COMMISSIONER R. ROBERTS: We assess all units so every unit in the city would be included. COUNCIL MEMBER FREED: Let me ask a couple of other questions. If these two laws are allowed to sunset, do we know what the effects are on the J-51 apartments and on the 421-A apartments? They're rental apartments, obviously. COMMISSIONER R. ROBERTS: I don't know that. We don't know what the impact of that would be. I think it's our expectation that the condition has been met, the process will move forward. I think we will have to look at, if something changes, we will have to start to look at what the impact would be. COUNCIL MEMBER FREED: Some of these are programs that were granted and part of the granting was to guarantee that there would be a certain level of affordable housing -- CHAIRPERSON SPIGNER: Council Member, it would help us if you stuck to the agenda for today. COUNCIL MEMBER FREED: I think it gives us a picture of what the impact would be for those of us who are very concerned that the entire city would be destabilized by this situation. Second round. Thank you. CHAIRPERSON SPIGNER: Council Member Fields. COUNCIL MEMBER FIELDS: Thank you, Mr. Chairman. Many of the questions just raised by my colleague, Kathryn Freed, I want to be associated with. But I specifically I want to ask you a question now with respect to what role -- By the way, welcome. This is your first hearing, I understand, and this is a big one. What role are you playing in terms of lobbying in Albany, I mean, are you going to go to Albany to convince Senator Bruno in any way? What specific role will you be playing in that regard? COMMISSIONER R. ROBERTS: Council Member, I'm not aware of any specific role I will be playing in that regard. I think that those decisions and activities are handled in the Mayor's office and I'm not -- COUNCIL MEMBER FIELDS: But as the housing commissioner and having the benefit of the information and coming before the housing committee of the city, who exactly then will be protecting the interests of the residents of New York City in Albany? COMMISSIONER R. ROBERTS: Again, I will go back to the statement that I made to Council Member Linares, which was that the Mayor's position on these issues is clear, he is supportive of continuing the system without changes, and I think that whatever activity occurs in Albany will occur at his direction. If he instructs me to do so certainly I will be involved, but he has not done so and I don't know what his plans are. I will say again that the role that HPD plays in this process is a peculiar one in that we have been merely dictated by the statute to be the agency responsible for commissioning this study. Our role is a minor one in terms of the process of continuing these regulations in full force and effect. We have commissioned the study. We present the findings. Our role is to present the findings and really not to be interpretive in that respect. COUNCIL MEMBER FIELDS: I guess that is part of the problem that had been raised by the earlier speakers too, Mr. Chairman. It seems to me that as a result of the extension of laws that this Council went even further in the last debate around rent regulation. Based on some of the information that continues to be brought forth to Council Members about how it's being implemented that some mechanism needs to be put in place at the city level so that we can in fact understand more exactly what is happening with over 3,000 -- I think that's the number -- 3,400 apartments in Manhattan having been deregulated as a result of the last -- CHAIRPERSON SPIGNER: Council Member Fields, I'll note that there's a bill being circulated that addresses this topic and when that bill is before this committee for a hearing I think that would be the appropriate time to discuss it. COUNCIL MEMBER FIELDS: So you will be looking to hear legislation -- CHAIRPERSON SPIGNER: I'm telling you what I heard. I haven't seen the bill. I'm told there's a bill being circulated called the Fields-Michels bill. When I see the bill I'll be able to respond to the issues being raised. COUNCIL MEMBER MICHELS: Mr. Chairman, I can verify that your information is correct. COUNCIL MEMBER FIELDS: Thank you, Mr. Chairman. CHAIRPERSON SPIGNER: Seeing no additional requests to speak -- I'm sorry, Council Member Marshall. COUNCIL MEMBER MARSHALL: Good afternoon. COMMISSIONER R. ROBERTS: Hi. COUNCIL MEMBER MARSHALL: Welcome to the City Council. Your agency is one of the most important agencies in the city. My area is in Queens County where we have a tremendous amount of doubling and tripling up and I was just wondering, do you have any observations, if we do decontrol, what will happen to those families? COMMISSIONER R. ROBERTS: Again, that's an interpretive question that I'm not in a position to address -- COUNCIL MEMBER MARSHALL: Do you have any statistics? COMMISSIONER R. ROBERTS: We do, and I didn't mention it in the prepared testimony, that the survey as it's currently conducted does identify crowded conditions and it defines those conditions as situations where more than one person per room resides in a unit. I guess that situation remained on a citywide basis, remained constant from 1996 to when the survey was last conducted in 1993. But let me point out that I don't know, do we? -- we don't break that information out by specific borough or community district or what have you. COUNCIL MEMBER MARSHALL: I would suggest that that would be an important thing to do. It would certainly give a better measure of the housing needs of our city. 1993 was four years ago. We have outlived that number considerably and largely because people, in order to get decent housing, they can't afford the rental so they double and triple up also because of the housing. So that's a figure that needs to be brought up to date. I know it's your first day but that would be very helpful to us. COMMISSIONER R. ROBERTS: Luckily it's not staff's first day. And again, this is just initial findings that we are presenting. The full report which will be finished some time later in the year does break out the information that you're requesting and we'll be happy to share that with you. COUNCIL MEMBER MARSHALL: Just to share with you, I have a large development that used to be in my district. It is no longer but every time the owner of the building gets MCI, we lose a whole slew of people. They can't afford the increased rent. People are spending far more a percentage of their income than they ever have. I know it's rough on the landlords too but this is part of the complex problem of housing in our city. Thank you. COMMISSIONER R. ROBERTS: Thank you. CHAIRPERSON SPIGNER: Commissioner, thank you very much. And we look forward to working with you in your new position. COMMISSIONER R. ROBERTS: Thank you. CHAIRPERSON SPIGNER: And the next person to testify is the Borough President of the Bronx, Borough President Fernando Ferrer. BOROUGH PRESIDENT F. FERRER: Thank you, Mr. Chairman. Good afternoon. I'm Fernando Ferrer, President of the Borough of the Bronx. Mr. Chairman, in a theoretical free market economy, we should refrain from imposing restrictions to the greatest extent possible. And there is little doubt that regulations of this type have caused some hardship particularly on small owners. It is also true that what was originally imposed has now been in existence for most of this century. However, that emergency measure has continued in existence for the simple reason that for most New Yorkers an affordable housing crisis not only remains in existence but is also growing significantly worse. The Housing and Vacancy Survey indicates that 112,000 affordable apartments have been eliminated since 1993. During this free fall, the prior safety net of federal subsidies and your own City Council's commitment to rehabbing and building have also dwindled. In recent times New York has completely failed to produce adequate numbers of new apartments. Even during the relatively affluent '80s an average of only 12,000 units annually were produced, and that's half the rate produced in New York City during the Great Depression. In recent years this figure has not been much better. The number of units authorized for construction in 1994 was a post-war low. It must also be noted that due to the advanced age of much of our housing stock we actually lose fourteen to nineteen thousand dwelling units annually. It's been argued that the existence of the rent regulations has discouraged new construction, but that's simply wrong. Rent regulations are not imposed on new units. The development in limited upscale areas of the city of units designed for the very wealthy does nothing to address the affordable housing crisis. And an increase in the number of vacate studio apartments with a $3,500 monthly rent has no bearing on the real world for the vast majority of New York families, and indeed it's essentially misleading to even include those units when calculating a vacancy rate. Those holding elected office have a clear duty to act responsibly. You heard the debate has unfortunately turned on the irresponsible statements of the majority leader of the State Senate whose own district is not even affected by this -- (Disruption from the audience.) BOROUGH PRESIDENT F. FERRER: Remarkably, when proposing the almost complete elimination of rent protection, Senator Bruno has offered absolutely no alternative for the over one million residents who would literally have no alternatives. At a time when federal and state and city housing programs are at a historic low and far too little affordable housing is being developed by the private sector within New York City, any proposal to eliminate rent protection without providing alternatives is irresponsible and even vicious. So does the housing emergency exist? of course it does. Is there a way to end rent protections? Yes, it's by eliminating the need for them. During my tenure as Borough President I have made housing a key priority. Developing an adequate supplying of affordable housing must be recognized as a crucial challenge to the future of our city. Until that challenge is successfully met, we have no alternative but to continue to protect the million residents who live in rent controlled or rent stabilized apartments. Now one final thing I would like to add, and that is that in making these proposals the State Senate has drawn the line with respect to not only the million households who live in New York City but those who live outside of New York City. And this is a time when leadership needs to be asserted. Leadership needs to be asserted not merely in this legislature and not merely in the State Legislature but by this city's executives to go to the Assembly, to go to the Senate and to tell them in the clearest possible terms that if they really want to do something important, if they really want to do something constructive and useful for housing in New York, it is to protect the million tenants who live in the city who are under rent protection and to build new housing. There is no other way out, and that's the only way and that's the only way to stabilize this market, protect the million households, and continue to offer decent, safe, affordable and standard housing units to the millions of people who still need them. Thank you very much. ************************************************************** Continued...