New York City Council Committee on Housing and Buildings
(March 11, 1997) Part 2 of 7

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Note: The following transcript covers over 300 pages of testimony in seven separate files. At the end of each file, click the "next" link to advance to the next part of the transcript. Some pages were missing from the original we received and the transcript is marked where these ommissions occurred.


...continued

CHAIRPERSON SPIGNER: We have representatives of State Senators Leichter,
Glick, Gottfried and Abate.

Tobi Koffer, representing Senator Deborah Glick.

MS. T. KOFFER: My name is Tobi Koffer, from State Senator Deborah
Glick's office. I'm here today to testify on behalf the State Senator
who is in Albany and cannot make it so I'm here on her behalf.

"I'm here today to testify on behalf of New York City rent regulated
tenants who face the elimination of rent protection for their homes. I
am also here to say that I stand with so many others in declaring
housing in New York City in a state of emergency, as stated in City
Council Resolution No. 2177.

"The Spigner-Vallone bill, Intro No. 920, calls for the renewal of rent
protection for New York City residents as they are now, which is crucial
to keeping housing affordable and crucial in the battle against
homelessness. This bill, however, does not include the repeal of Local
Law 4, the luxury decontrol measure.

"With so many New Yorkers struggling to survive on a daily basis just
paying their rent and bills, Local Law 4 encourages landlords to
intimidate tenants thus creating faster turnover of apartments. I
absolutely support the renewal of rent protection for rent controlled
and rent stabilized apartments, but the statute must include the repeal
of luxury decontrol.

"It is crucial that the City Council renew these regulations. Almost 75
percent of New Yorkers rent their homes or apartments. In my district
66.8 percent of the apartments are rent regulated. Unfortunately,
vacancies in New York City remain very low, particularly for apartments
in the low and moderate rent ranges.

"By keeping New York City affordable, we keep a vibrant and diverse
city. It is imperative that residents of New York City talk to their
friends and relatives around the state to encourage their legislators to
support the continuation of these laws.

"Furthermore, I am encouraging all concerned tenants to contact
statewide officials such as Governor Pataki, State Senator Joseph Bruno
and U.S. Senator Alfonse D'Amato, and let them know that their blatant
disregard for the basic right to affordable housing in unacceptable. We
must ensure that the State Legislature and Governor take action to
ensure the continuation of the emergency tenant protection act in June.

"The very fabric of our neighborhoods is threatened by plans to
eliminate rent protection, which is essential for the continuation of
affordable housing. Maintaining the diversity of our neighborhood
residents is crucial to maintaining the vibrancy of our city. I will do
whatever it takes to fight for the continuation of rent protection for
New Yorkers."

Thank you.

CHAIRPERSON SPIGNER: Thank you very much.

We're joined by our Council Member from Manhattan, Tom Duane.

MS. R. KINSELLA: Good afternoon, Chairman Spigner, committee members.
Thank you for holding this. I'm here for Assembly Member Richard
Gottfried, who is not able to tend. He is in session in Albany today and
I have a statement I would like to deliver on his behalf.

"I am Assembly Member Richard N. Gottfried. I represent the 64th
Assembly District, which includes the neighborhoods of Chelsea, Clinton,
Midtown, Murray Hill and part of the Lincoln Center area. My district
has one of the highest concentrations of rent regulated apartments in
New York City.

"I regret that the legislative sessions makes it impossible for me to be
here in person, but I wanted to take this opportunity to speak to you on
an issue of the greatest importance to me, New York's rent laws.

"I urge you to protect 2.5 million people, residents of this city, by
renewing rent control and rent regulation. In addition, Local Law 4,
which was passed in 1994, must be repealed.

"Clearly and simply, redistributing income from tenants to landlords is
the motivation behind the movement to end rent regulations. But
preserving our rent laws is not just a pocketbook issue. Rent
regulations protect the homes and neighborhoods of millions of tenants.
We must defend seniors, families, entire neighborhoods from unfair
rents, lack of maintenance and service and unwarranted evictions.

"Rent regulations developed in response to a housing crisis. This crisis
still exists. The most recent Housing and Vacancy Survey reveals that
the current vacancy rate is around four percent. While this number is
higher than what we have seen in recent years, it is still a full point
under five percent, which constitutes a housing emergency.

"All New Yorkers -- including those who don't live in rent regulated
apartments -- benefit from the family and community stability the rent
laws provide.

"In New York City, most tenants consider their apartments and their
neighborhood to be their home. They have lived there for years and want
and expect to live there for years to come. The rent laws guarantee them
the right to renew their tenancy and thus keep their homes. The right to
renew a lease can only work if there is a reasonable limit on how much
the landlord can raise the rent.

"Without rent laws, a landlord can throw a family out of its home for
almost any or for no reason. Having to move can mean your children lose
their school and friends, you lose your neighborhood, you gear the
physical and financial burden of moving.

"A landlord with that kind of power and leverage has an open invitation
to rent gouge or to punish a tenant who complains. The law ought to help
protect people and stabilize their homes and families. That is what New
York's rent laws do.

"The elimination of laws governing lease renewals could result in wide
scale evictions for any reason. Allowing landlords the right to refuse
lease renewals or terminate leases for any reason is basically unfair.

"As people are forced out of their homes they will place a burden on an
already overtaxed, underfunded shelter system, double up with family or
friends, creating massive overcrowding.

"Rent controlled tenants are particularly at risk. In addition to the
low income associated with these households, the opportunities for rent
controlled tenants to move are severely limited. Eighty-four percent of
rent controlled tenants have lived in their apartments for 25 years or
more.

"The rent laws are vital to maintaining a New York that is for everyone,
not just the so-called rich. Free market rents are beyond the means of
most New Yorkers. In fact, if New York is allowed to become a city where
only the wealthy can afford to live, we are robbing ourselves of the
many young people who come here each year, bringing their talents and
skills with them.

"There is a dangerous notion going around that the rent laws aren't
needed by higher income tenants. But a family with two school teacher
salaries adds up to more income than some have been targeting for
decontrol. Raising their rents and eliminating their right to keep their
apartments would be outrageously unfair to them and would not benefit
lower income tenants at all.

"If we suggest raising taxes on upper income New Yorkers, we are told
that they will head for the suburbs. Imagine the impact if we let their
landlords raise their rent by a thousand or more a month.

"At present people are tripled and quadrupled up in small apartments
just to meet the rent. New units of affordable housing are not being
built.

"The rent laws do not discourage investment in new housing because new
housing is exempt from the regulations. In fact, statistics show that
rent regulations actually have no effect on the building of new housing.
Interest rates, construction costs and tax incentives do.

"Rent regulation doesn't interfere with property owners' legitimate
rights. It gives them substantial rent increases at lease renewal and
entitles them to a fair return on their investment.

Tenants can be evicted for violating the lease or the law.

"The end of rent regulations would mean the end of New York's
communities as we know them. Much effort has gone into rebuilding our
neighborhoods over the past few decades. Please protect those efforts.
Please renew the rent laws and please repeal Local Law 4."

Thank you.

MR. KAREN LIN: My name is Karen Lin. I'm a staff person with Senator
Catherine Abate's office, and I have a statement from her to present to
you today.

"Good afternoon. I am State Senator Catherine Abate and I represent the
27th Senate District in Manhattan. I am here today to give testimony to
urge the committee to renew New York City rent stabilization and rent
control laws, Introduction 920, and to support the declaration of a
housing emergency in New York City, Resolution 2177.

"With a vacancy rate barely over three percent and an acute scarcity of
affordable housing, New York City continues to face a housing emergency.
But the solution is not to abolish rent regulation.

Rent protections preserve the diversity and stability of neighborhoods
by protecting elderly and disabled citizens and middle and low income
families from rent gouging and wild market fluctuations.

"Rent regulations have allowed middle and low income New Yorkers, many
of them residents of the same neighborhood for decades, to stay in their
homes. Contrary to reports that rent regulations tend to help wealthy
tenants, almost 50 percent of tenants in apartments renting for under
S300 have a household income of $10,000 or less per year.

"Eighty percent have incomes under S25,000. According to a 1993 survey,
more than half the tenants in apartments renting for $400 or less pay 30
percent or more of their income toward rent.

"Even with rent regulation, New York City rents have consistently
outpaced the national rate of inflation and the Consumer Price Index. A
rent stabilized apartment that rented for s200 in 1972 would rent for
$497 in 1995, an increase of 250 percent, not including increases for
vacancy allowances, major capital improvements, renovations or new
equipment installations.

"A rent controlled apartment renting for $200 in 1972 would rent for
S674 in 1995, an increase of 337 percent based on MBR allowances alone.

"Although tenant income has risen, rents have risen twice as fast. More
than 55 percent of regulated tenants pay more than 30 percent of their
income on rent, while for very low income tenants rents often constitute
60 to 70 percent of income.

"Rent regulations are not only about keeping rents at a moderate rate
while providing a fair return to the owners. Rent regulations allow a
tenant to exercise their right to safe and habitable premises without
fear of eviction. Furthermore, rent regulations help ensure that
buildings will be maintained and repaired.

"The vacancy decontrol provisions enacted in 1993 and 1994 were the
first instance of chipping away at the rent laws. This year State
Senator Joe Bruno has vowed to end rent control as we know it. Much of
his boldness has been brought on by the deregulation provisions of 1993
and 1994. The Council must send a strong message to the State Senate
that the City of New York will not tolerate any weakening of the rent
laws.

"History has already shown us what will happen if rent laws are not
renewed. In 1971, the last time New York experimented with vacancy
decontrol, rent gouging was rampant and mass evictions ensued. Rent
regulations as a result were reinstated in 1974. New York City cannot
sustain deregulation in totality nor in any form that dilutes tenant
protections.

"For these reasons I strongly urge the Council to renew the New York
City rent control and stabilization laws and Resolution 2177 to declare
a housing emergency."

Thank you for your time.

MS. M. BLACK: Thank you, Mr. Chairman, members of the committee.

I have written testimony from State Senator Leichter which I would like
to put into the record. What the Senator would like me to do is recap
the most important part of his testimony for you.

"I am State Senator Franz S. Leichter and I represent parts of
Manhattan's West Side, Washington Heights, Inwood and the northwest
Bronx.

"As you know, the Senate Republicans in Albany and the Governor are
mounting a serious effort to endorse dramatically curtailed rent
regulation in New York City. If this occurs, over two million New
Yorkers will be affected.

"The City Council now has the opportunity to send a loud message to
Albany that rent regulations must be renewed and that no erosion of rent
protections is acceptable.

"In the last few years, rents have risen through the roof in my
district, throughout Manhattan and across the city, affecting thousands
of individuals families. Finding an affordable apartment in Manhattan
has become Mission Impossible, while an increasing number of New Yorkers
are being priced out of the city altogether.

"The Daily News recently reported that rents across the city have risen
by 30 percent over the last three years. These skyrocketing rents have
disproportionately affected New Yorkers with low and moderate incomes.
An increasing number of people living in rent regulated apartments have
incomes below the poverty level.

"According to the 1996 Housing and Vacancy Survey, HVS, the proportion
of renter households living below the poverty level has increased from
29.9 percent to 32.3 percent over the last three years. Meanwhile, the
median income of renter households dropped by 2.7 percent when adjusted
for inflation.

"This alarming trend will become far worse if the Council and the
legislature allow rent protections to be eroded. It is the
responsibility of government to protect its citizens, especially the
most vulnerable among us.

"The city's affordable housing crisis will continue to get worse unless
the City Council reverses its misguided decision in 1994 to adopt
vacancy decontrol, a law that permanently removes affordable housing
stock from the open market.

"Local Law 4 decontrolled any apartment, upon vacancy, which rented for
S2,000 or more a month. This legislation was a mistake. The dramatic
increase of rents in recent years debunks the myth that a rent of S2,000
or more should be considered a luxury rent.

"A one bedroom rent stabilized apartment on the Upper West Side of
Manhattan now rents for $1,475, according to the Daily News survey.
Although a one bedroom apartment can hardly be considered luxurious,
this type of rent is dangerously close to the S2,000 ceiling.

"In addition, this system for decontrol is open to fraud by landlords,
who can decontrol apartments simply by claiming that a vacant apartment
rents for over $2,000. Because there is no oversight, there is no
telling how often this practice occurs.

"The mistakes of the past tell us that vacancy decontrol will only lead
to more problems. In 1971 New York City adopted vacancy decontrol. It
was abandoned three years later because the prospect of raising rents
prompted so many landlords into harassing tenants into moving. I
strongly urge you to adopt the Michels-Fields legislation that revokes
vacancy decontrol.

"The most devastating statistic revealed by the 1996 HVS report was the
rise of gross rent-income ratio for tenants. The rent-income ratio
increased from 30.8 percent in 1993 to 32.3 percent in 1996. The widely
accepted standard of housing affordability is for tenants to pay between
25 to 30 percent of their income.

"Are we to ask our most vulnerable citizens to choose between paying
rent, buying food or seeking medical care? According to former HPD
Commissioner Lilliam Barrios-Paoli, the findings of the HVS study
suggest that, quote, there is still much work to be done to provide
affordable rental housing in New York City.

"I can only tell you that the action by City Council in 1994 on vacancy
decontrol has only emboldened state legislators in favor of weakening
rent protections and encouraged real estate groups and others in favor
of eliminating or weakening rent regulations.

"You must send a strong message to Albany that weakening of rent
regulations is unacceptable. I strongly urge you to speak out loud for
the adoption of the Michels-Fields legislation and the renewal of rent
protections for all New Yorkers."

CHAIRPERSON SPIGNER: Richard Anderson.

MR. R. ANDERSON: Mr. Chairman, members of the Council, my name is
Richard Anderson, president of the New York Building Congress. We are a
coalition of the design, construction and real estate industry in the
city.

There is widespread agreement, Mr. Chairman, that residential rent
controls reduce new rental housing construction and inhibit the
maintenance of existing units. This is the issue that we are most
concerned about.

At the same time, as you've heard, the city needs at least 20,000 new
units a year to replace units that are lost and will accommodate new
households. So we have twin challenges. We need one of the largest
housing construction programs in the City of New York to meet the needs
for affordable housing and to replace existing units and to repair
existing units.

But we've reached a number of conclusions with respect to the issue
before you today. The first is that new rental housing construction is
severely reduced when we have the extent of rent regulation we have now.
And my statement, Mr. Chairman, will explain some of the reasons why our
industry has reached that conclusion.

Secondly, we've concluded that there's consistent under-investment in
maintenance and services in the rental housing market to compensate for
low profits caused by rent regulation and many owners skimp on spending
for housing services. If their profits fall low enough to cause them to
disinvest, then they also cut back on maintenance, and this has been
seen throughout the city.

Third, Mr. Chairman, we've concluded that alleviating rent regulations
would stimulate new construction and building maintenance.

The Building Congress estimates that an additional $769 million a year
of new construction would be generated if we were to ease rent
regulations. Another $560 million would be available for maintenance
financing, for a total of over $1.34 billion a year. This would have a
very salutary effect on the city economy and it would generate another
15,000 jobs in design and construction each year.

So if you were to combine a step of phasing out rent regulations in the
city with other initiatives such as changes in zoning and other
regulatory procedure, site preparations, tax policy, building code
reform, property tax modifications, and continuing, and I emphasize this
--

(Disruption from the audience.)

CHAIRPERSON SPIGNER: Just a moment. I'm going to say, ladies and
gentlemen, I don't see too many dark skins in the audience. You're all
adults. Why act like children?

You know, you're not going to win any arguments here. so let's have your
cooperation, let's have Mr. Anderson present his views and respect that,
and you present your views and respect that, and if you can't abide by
those rules why don't you find someplace else to go.

Continue, Mr. Anderson.

MR. R. ANDERSON: Thank you, Chairman Spigner.

I think what everyone in this room agrees with is that we need a large
residential building program in this city and I think if we were to take
the kind of steps that I'm outlining here and continuing and expanding
our efforts to build affordable housing, the cumulative effect would
yield one of the largest residential building booms in this city's
history. That's what we need and that's what we need now.

I urge the City Council to work with the Mayor, Governor and State
Legislature to prepare a realistic program for phasing out rent
regulations. We are confident that transitional issues affecting the
elderly and needy can be addressed expeditiously and fairly in such a
program.

There is no doubt in our mind that extension of current rent control and
rent stabilization laws in their current form will serve no useful
purpose. The Building Congress is ready to assist in any ways that will
be helpful.

We thank you.

CHAIRPERSON SPIGNER: Council Member Michels would like to discuss the
issue.

COUNCIL MEMBER MICHELS: Good afternoon, Mr. Anderson.

I'm always troubled by the statement, and I would like you to clarify
it, that rent control is responsible for new units not being constructed
when it s been very clear, and it's all settled and I think you know
that as well, that since 1974 if any builder or landlord chooses to
build housing without subsidies from the city or the state he's not
under rent control or rent stabilization. So how do you link the two?

And the second point I would like you to address is if somebody has to
depend on the landlord to give him a lease every two years or three
years, don't you think that would make them a little more careful about
complaints, about the maintenance of their building, and therefore the
person who is secure in his building is more likely to keep the
landlord's maintenance up on the building, don t you think so?

MR. R. ANDERSON: Council Member, investment of assets, whether it's from
a corporation or from an individual, fundamentally relies on a question
of confidence, and so much of the investment community, where funding
would be available for residential investment in the city, just simply
does not have confidence that their investment will not end up being
regulated and controlled to a degree. So this is a personal or an
organizational decision.

On the other hand, I think it's understandable why rent regulation has
been instituted in this city over time. The question is until the
investment community has confidence that regulations would not be
instituted or reinstituted once again, they simply do not put monies in
housing, they put it elsewhere.

COUNCIL MEMBER MICHELS: Let me just ask you this. It's now been 23 years
since we provided that there's no rent regulations for new housing. How
many more years do the landlords or the builders need this confidence to
build properly this housing that is needed?

MR. R. ANDERSON: I would encourage the Council to form a group to work
with investors and ask that question of them because the money is not
flowing into the residential sector of New York City, that's a fact of
life.

And I think if you were to objectively take a look at that issue, you
would find some answers, and it may yield some new initiatives.

COUNCIL MEMBER MICHELS: Isn't it the cost of construction, the study
that I've seen is the cost of construction and other things you
mentioned and you might have well throw in rent control as well, but the
fact is there are many other reasons why construction isn't going on in
the city. Rent control plays a very small part in it.

MR. R. ANDERSON: Not really.

CHAIRPERSON SPIGNER: Council Member Duane.

COUNCIL MEMBER DUANE: Isn't it the cost of land acquisition, costs, et
cetera, are part of that -- I have to go back to what my colleague said,
that with new construction no public subsidies are being used, the new
units are not under any kind of rent regulation, and so it's a
misunderstanding or you're purposely misleading as to what that is, that
there are other factors that go into the cost of construction.

Also, I object to your -- you make the observation that maintenance is
not being done by land owners because you say that they re not getting
enough revenue. But in fact, we have no way of knowing that because
we're never really provided with the facts and figures of the individual
owners --

(Disruption from the audience.)

COUNCIL MEMBER DUANE: I hear from people all the time who live in
residential buildings that they are being inundated with MCIs and people
believe, and I think it's hard to say this isn't true, that maintenance
is often withheld so ultimately the owners can apply for and usually
receive these MCIs.

MR. R. ANDERSON: I assume there's a question there, which is --

COUNCIL MEMBER DUANE: It's more of a --you can decide to respond or
you're not required to respond.

MR. R. ANDERSON: All the members of the Council have put their fingers
on a very complex series of issues involving housing development and
they're all relevant, but the bottom line is funds are not flowing into
housing maintenance and housing construction. Our conclusion is that
rent regulation plays a very critical role.

It's not the only role, and all we're asking you to do is to take that
into account when you consider the future of rent regulation in the City
of New York. It's as simple as that.

CHAIRPERSON SPIGNER: Council Member Ognibene.

COUNCIL MEMBER OGNIBENE: Mr. Anderson, I wanted to go into this issue
about new construction. One of the things that it seems to me, and I'm
not an expert, is that when you build a new building nowadays after June
30, 1975, you get a new C of O, you immediately go into a tax Class 2-B
and request the new construction.

Your taxes are astronomical. So it really doesn't pay for people to
build residential housing because the taxes are and construction costs
are such under rent regulation that you couldn't get the rent to support
it.

And what's interesting is what development does is that the reason that
people do build is because they get J-51, but when you get J-51 the
Catch 22 is then you've got to accept rent stabilization.

So if we came up with a sensible J-51 tax abatement program without rent
stabilization we would have a wonderful creation of residential
apartments in the City of New York, and that's a point apparently that
my colleagues missed when they were discussing why there's no new
construction.

And I look here and -- and I apologize to you for the noise. I notice
when the other speakers were speaking nobody made any noise. But we have
a progressive labor party, their attitude is everybody shares a
Communist society.

Another thing here, the Housing Solidarity Network, because you have to
understand where they're coming from, they say no rent controls, we say
no rent, so the people don't want to pay any rent at all, let alone a
reasonable rent. You have here the New York State Communist Party and
Young Communist League.

The point that I'm getting at is we are trying to achieve a responsible
system of rent regulation within the City of New York and one of the
proposals that I think we see Mr. Bruno make is that people making more
than $100,000 shouldn't be under the protection of rent regulation.

And also what we see is that while we understand the need for the poor
to receive housing, everybody on both sides of the aisle, we don't think
that's the responsibility of individual landlords but government's
responsibility to subsidize them.

Even in my neighborhood, a small local paper, somebody said that if a
loaf of bread cost 50 cents and government made the baker sell it for 25
cents, people would eventually go hungry. We have to come up with a
rational system.

And I thank you for your testimony.

COUNCIL MEMBER MICHELS: Mr. Chairman, is the next witness Senator
McCarthy?

CHAIRPERSON SPIGNER: There's a set time when we're going to recess this
meeting and the longer you demonstrate and delay, the fewer of you will
have an opportunity to eventually testify.

We move on now with James Cobb, Barry Jacobson and Gloria Freedman.

Please identify yourself.

MR. J. COBB: Good afternoon. I'm James Cobb, president of Local 1219,
which represents real estate employees in New York City, HPD, and, I'm
also chairperson of D.C. 37's housing committee. And I'm also a vice
president of District Council 37's executive board.

I am here to speak to you today on behalf of the 28,000 D.C. 37 members
who live in rent controlled and rent stabilized apartments and on behalf
of the other 100,000 D.C. 37 members who either have parents, friends
and/or other relatives residing in rent controlled and rent stabilized
apartments.

D.C. 37 members are fearful of losing their apartments since:

o Many of our members earn less than $30,000 a year and are supporting a
large family;

o Some are single parents who are trying to support a family on one
income;

o Most are paying college tuition for their child/children;

o Some are caring for an elderly or disabled family member;

o They are retirees and members on a fixed income who can barely pay
bills now.

D.C. 37 also has 530 members in Local 1359, which represents Rent and
Rehabilitation employees. If these regulations were allowed to expire,
these members would no longer be employed and unable to support their
families.

In conclusion, our members would face severe economic hardship if these
rent regulations were allowed to expire. We urge you as the City Council
to do everything in your power to impress upon Governor Pataki and your
colleagues in the State Legislature to renew the state rent regulations
before they expire in June.

Attached is D.C. 37's fact sheet on rent control and stabilization for
your information.

Also, Council Members, when it's time to be reelected, D.C. 37 does not
turn their back on you. We don't want you to turn your back on this very
important bill.

Thanks for inviting me to testify today and on behalf of our executive
director, Stanley Hill, who also send his regards, I would be happy to
answer any questions you may have after my two other colleagues speak.

Thank you.

MR. B. JACOBSON: Good afternoon. My name is Barry Jacobson, president of
Local 154 of District Council 37. I represent the Amalgamated
Professional Employees of New York City. I am also a member of the D.C.
37's housing committee.

The elimination of the rent regulation laws would cause severe hardship
on the D.C. 37 members in the five boroughs who reside in rent
controlled or rent stabilized apartments.

The housing committee has received many phones calls regarding the
extension of the rent regulation laws. Many of our members would have to
move in with relatives or even be homeless if this legislation fails to
pass in New York City and State.

I urge you to implore New York State legislators to pass rent control
and rent stabilization legislation as well.

Also, it is our belief the regulations do not discourage new housing
construction, the new housing construction would not be subject to rent
regulations, and that would be a benefit to developers under the present
guidelines.

Landlords already make an estimated $7 billion yearly from regulated
apartments and could gouge more millions if there were no regulation
laws in effect.

Once again, we urge you, the City Council, to extend rent control and
rent regulation laws in New York City. We must continue to keep
affordable housing available to all New Yorkers.

Thank you for the opportunity to speak.

MS. G. FREEDMAN: My name is Gloria Freedman. I represent 25,000 retirees
of the City of New York who are members of the retirees association of
District Council 37.

We are urging you to think seriously about what you're doing here today.
We want you to think seriously about Joseph Bruno, who does not
represent tenants. All of his district are full of private homes. He has
no feeling at all about tenants in New York City.

And I would also like to say that all 25,000 members who are retirees
who have worked hard for the City of New York are in jeopardy if these
rent regulations are gotten rid of. We must have continuation. They have
given loyal service to the City of New York and we don't want them to
suffer any privations, which they certainly would do.

They are fearful now, even though they are on rent regulations.
Landlords are not giving them heat. They take their money and they
freeze and they die of pneumonia. And we want you to know that the rent
regulations must continue.

We thank you for listening and we hope you will do the right thing.

CHAIRPERSON SPIGNER: Our next panel is Queens League of United Tenants,
Tenants and Neighbors, and Met Council on Housing.

MS. J. LAURIE: It's really great to testify. My name is Jenny Laurie.
I'm the executive director of Met Council on Housing, which is a New
York State organization.

Intro 920, if passed, would include weakening the decontrol amendments
that the Council passed in 1994. Those amendments allow for the
immediate decontrol of apartments renting for $2,000 per month where the
tenant earns $250,000 a year, and vacancy decontrol of apartments
renting for $2,000 per month.

The provision passed by the Council in 1994 removed the October 1, 1993
base date and opened the door for landlords to escalate rents. By
renewing the laws with these provisions, the City Council sends a clear
signal to the Republicans in Albany, Senate Majority Leader Joseph Bruno
and Governor Pataki, that it is okay with the Democratic leadership of
the City Council to get rid of New York City's rent regulations.

Speaker Vallone and the other leaders of the City Council and the Mayor
would like tenants to believe that they will do the right thing this
year, coincidentally an election year. But that won't be the case.
Tenants will know the leadership of this City Council assisted the
landlords in decontrolling New York City.

The Republicans in Albany are proposing to lower the income decontrol
threshold to $100,000 per year, the vacancy decontrol threshold to
$1,200 per month. They are also proposing full vacancy decontrol.

Senator Bruno has threatened to allow total decontrol if the Democrats
won't negotiate a deal. The City Council is under no such threat. Then
why does it wish to signal to Joe Bruno and George Pataki that higher
rent decontrols are okay? It can only be because the real estate
industry asked it to.

In 1994 Speaker Vallone showed support for weakening the rent
regulations and forced the Council to pass Local Law 4. In a meeting
with tenant advocates in 1994, Peter Vallone said that he favored
continuing rent regulations for tenants in place, revealing to us that
he supports vacancy decontrol.

The recently released Housing and Vacancy Survey shows that tenants are
in essentially the same condition they were in three years ago, a
housing emergency, very few vacancies at affordable rents, low incomes
and poor housing conditions. These conditions would worsen without rent
regulations despite landlord studies to the contrary.

The landlords claim that the city would earn billions in new revenue if
the housing market were decontrolled. If this is true, it would come at
the cost of a few hundred thousand evictions and tremendous rent
increases for tenants.

The latest HVS shows that the current median gross rent-income ration
increased from 30.8 in 1993 to 32.8 in 1996, showing that half of all
tenants already pay over one-third of their income for rent.

This is no time to be talking about decontrol, whether gradual or
sudden. We've been told by our Democratic friends in the city that the
battle is all in Albany, that the City Council intends to do the right
thing. Clearly this is not the case.

We urge the Council to show clearly which side it is on, support the
measure proposed by Stanley Michels and C. Virginia Fields which would
remove the high rent decontrol amendment. This is what tenants want and
this is how you send a clear message to Albany saying that New York
City's laws belong to the city's residents, not the real estate
industry.

(Disruption from the audience.)

CHAIRPERSON SPIGNER: Folks, please.

MR. M. McKee: My name is Michael McKee. I'm the rent law campaign
manager for the New York State Tenants and Neighbors Coalition.

Tenants and Neighbors is a statewide membership organization that
advocates, organizes and lobbies for tenants rights. We have 143
organizational members and 17,000 individual members.

I want to begin my testimony today by thanking Council Members Guillermo
Linares, Helen Marshall and Stanley Michels, the only three members of
this committee who helped us and supported us in 1994.

You opposed the leadership of the City Council when it pushed through a
decontrol amendment as part of the three year extension of rent control
and rent stabilization.

I also want to thank the other 15 members of this Council listed on the
attached honor role, including Mr. DiBrienza and Mr. Duane, who voted
against the decontrol amendment on the floor. We are deeply grateful for
your support.

This year the leadership of the Council has an opportunity to redeem
itself in the eyes of tenants. To do so, you must undo the harm you did
to the rent and eviction regulation system three years ago.

You can accomplish this by closing the window which you opened in 1994,
by inserting a new cutoff date after which the so-called high rent and
high income decontrol provisions will no longer apply. Failure to do so
now will mean a failure by the City Council to protect the rent and
eviction regulation system.

And I want to draw your attention to an attachment here which is an
article from the real estate section of The New York Times from Sunday,
November 24, 1996, about hunting season. That's what landlords call it.
And that is what you did to the rent regulation system in 1984.

The leadership of the Council in enacting a decontrol amendment three
years ago contributed to the current political climate in which the very
existence of rent and eviction protection laws is in doubt.

The leadership of the Council was as aware of anyone, in the aftermath
of the 1993 session of the State Legislature -- when tenants suffered
five decontrol amendments as the price of a four year renewal of the
rent and co-op laws -- that there was a concerted plan to eliminate the
tenants protection laws in Albany once and for all, and that the 1997
fight in Albany would be crucial. You failed the test.

Apparently, the Council leadership now hopes to be absolved of its
responsibility for helping to undermine the rent and eviction protection
laws in 1994 by passing a straight extender of rent control and rent
stabilization. The last time, the Council acted a few months after
members were elected to a four year term.

This time, of course, you are acting a few months before the next
election. If that is what it takes for the City Council to show
leadership, then every year should be an election year.

MR. R. KATZ: My name is Robert Katz. I'm counsel to the Queens League of
United Tenants.

Before I read my formal statement I will inform this committee that
there is litigation pending in Supreme Court, New York County, on the
question of the constitutionality of Local Law 4 as applied to, by DHCR.

And now I'll read my formal statement.

Sir Winston Churchill cried out in the wilderness to a docile England to
look at history. His plea went unheeded and all know the consequences.

Now a cloud comes before you to again speak in terms of looking at
history, the history of rent regulation. We have the abysmal record of
the Rockefeller decontrol law to here review and to examine how the
brigands of the real estate industry abused the truth, the trust and
good faith of the people of this state to the point where the honorable
Governor Malcolm Wilson and the Democratic legislature in concert saw
the necessity of placing vacant rent controlled apartments into rent
stabilization with the rent regulated by a fair market procedure.

Even though that remedial legislation came forth with relative speed,
this city had already felt the effects and ravages throughout the
communities. Now a Draconian Nero named Bruno and his disciples are
turning a blind eye to that history, speaking in the name of the
behemoth real estate and banking industries, to reenact that tragedy,
albeit on a grander scale.

What they will accomplish in this unmindful quest will lead to the
political burning of the Republican Party in this city and of course the
destruction of the remaining affordable housing stock and the
displacement of tenants and the small merchants who those tenants
patronize.

And last but not least, the displacement of tenants so that more will
now sleep upon the streets of New York. Then shall we have the Utopia of
the grand landlords who will cater to the rich, the rents in the
stratosphere for those who can pay.

But alas, that will not be the middle class or the working poor who if
they are not on the street will be doubled and tripled up in the hovels
which will become the slums of New York.

CHAIRPERSON SPIGNER: Council Member Duane.

COUNCIL MEMBER DUANE: Mr. Chairman, thank you.

This is particularly for Michael and for Jenny. I've been reading what
has happened with what is called the phase-in of the elimination of rent
protection in Massachusetts and particularly Boston, and I'm wondering
if your organizations have been tracking what's been happening there, if
you can describe for us any information you have.

MR. M. MCKEE: All you need to do is ask the representatives of the real
estate lobby and there is no problem and no one is being evicted and
lots of new housing is being built.

The reality is that pages of the Boston Globe and the Herald are filled
with stories virtually on a daily basis of people being thrown out of
their houses, people who have lived in their house for 30 plus years,
seniors -- and you're talking about a total universe in Boston,
Cambridge and Brookline, which is a very small number compared to New
York City, a total of something like 70,000 apartments that were rent
regulated that have now been removed from rent and eviction regulation.

So it's been a horror show. The Mayor of Boston has publicly called on
landlords to lower rent increases, not to throw tenants out, and the
pleas have apparently fallen on deaf ears.

The municipalities are struggling to come up with subsidies, the Section
8 or other kinds of subsidies, to make it possible for at least some of
the tenants to stay in their homes, and it's a drop in the bucket.

COUNCIL MEMBER DUANE: I have one additional question, Mr. Chairman, and
I think, Michael, this one will be for you as well and it's partly
because we've been around for a while.

You I think were already involved in housing issues in the early '70s
during the period of vacancy decontrol. Could you describe for us what
happened in terms of the maintenance issues which we discussed?

I asked the industry people about that, but could you describe for us
what the impact of deregulation on is on maintenance?

MR. M. MCKEE: According to the State Commission on Living Costs and the
Economy, which was appointed by Governor Nelson Rockefeller in the
spring of 1973 and issued its report in February of 1974, maintenance
and improvements of decontrolled apartments actually went down
significantly, so that despite the fact that owners were collecting more
rent for the decontrolled apartments they were actually spending less on
fixing them up.

COUNCIL MEMBER DUANE: Thank you.

COUNCIL MEMBER DIBRIENZA: Mr. Chairman, I have a question for the
witnesses and I want to make a brief comment.

As you know, these budget hearings are going on across the hall. I'm
chairing at the moment the General Welfare agencies and social service
agencies, so I apologize for having to run in and run out.

But as always, I appreciate the Chair's flexibility in accommodating
myself and my colleagues.

I actually just wanted to ask one question because I did vote against
this erosion of rent protections and I will when offered as an
amendment, I'm not a member of this committee, but when offered either
at this committee first if it passes, ultimately on the floor, be
prepared to vote again to undo the damage.

But that's not really why I'm here. I wanted to ask any of the three of
you, clearly it appears to me that these are two, albeit it slightly
different, erosions. You phrase it nicely --

MS. J. LAURIE: The high income decontrol and the maintenance decontrol
and the high rent --

COUNCIL MEMBER DIBRIENZA: Would you agree that you could look at it as
two different problems, two different erosions?

MS. J. LAURIE: Yes.

COUNCIL MEMBER DIBRIENZA: I voted against if because I disagree with
both of them. But do you think either present a bigger problem, in other
words, are they equal in your mind?

MS. J. LAURIE: It's our position that there should be no weakening of
the rent control laws. I'm not going to open those two issues so that
you can separate out income from high rent --

COUNCIL MEMBER DIBRIENZA: By the way, I'm just wondering out loud
because I'm committed to my position and it's not going to change. I was
just --

MS. J. LAURIE: Clearly if you have decontrol by rent level you can have
a situation which is going on today which is landlords are escalating
rents and harassing tenants to move out in areas where they can get
$2,000 rent.

If the State Legislature lowers that to $1,200, obviously that pressure
will increase. They can't do much to pressure on $250,000 a year. I wish
they would apply that to me --

COUNCIL MEMBER DIBRIENZA: I'm just thinking about it.

And lastly, particularly for those who would argue that the numbers are
so high as to not have an effect, that after all, if you can make that
much money, you've heard all the arguments from those in favor, it seems
to me one of the keys here, first you've highlighted one, which is the
actual condition of the rental market, the actual numbers that continue
to climb and the threat to reduce the threshold to even lower, in short,
the notion that it's the concept of decontrol that is inherently
problematic, notwithstanding where the numbers are fixed at any given
moment.

MS. J. LAURIE: Exactly, it opens the door, the slippery slope, however
you want to phrase it.

COUNCIL MEMBER DIBRIENZA: I just wanted to ask all that to be sure that
people are understanding the fullness of the issue. And you obviously
are experts, but as members when we vote we have a record here, and it's
frozen in time. People look to Pataki but I think the broad points you
raise are critical.

MS. J. LAURIE: Absolutely. The point that this will not affect
neighborhoods where housing has lower rents generally misses the thrust
of the real estate industry which is to decontrol the entire market. It
also says that pressure on one part of the market doesn't affect another
part of the market, which of course is inaccurate.

COUNCIL MEMBER DIBRIENZA: I couldn't agree with you more. And my
colleague, Council Member Michels, has taken a strong lead here. Whether
the amendment is in the committee or out on the floor, we're committed
to help.

Thank you very much.

MS. J. LAURIE: Thank you

COUNCIL MEMBER DIBRIENZA: Thank you, Mr. Chairman.

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Continued...
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