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: Thank you. Dan Margulies. Nunzio Del Greco. Michael Laub. MR. M. LAUB: My name is Michael Laub, president of the Bronx Realty Advisory Board. The Bronx Realty Advisory Board is the largest owner organization in the Bronx representing owners of more than a thousand buildings. I have been in business for over 25 years. My company owns and manages 5,000 units in the Bronx and Manhattan. I'm a member of the Owners Advisory Committee for the State of New York and I have a deep concern regarding the Bronx and all the other boroughs in New York. By law, the City Council has the authority to decontrol many classes of housing for which the vacancy rate exceeds five percent, indicating there is no housing emergency. In past decades the Bronx lost so many thousands of buildings to abandonment, in large part caused by rent controls and excessive bureaucracy, that the borough became the worldwide symbol of decay and destruction. Indeed, the Charlotte Street area resembled a bombed out war zone. However, there is irrefutable evidence that now no housing emergency exists in the Bronx. According to the recently released 1996 New York City Housing and Vacancy Survey, the Bronx vacancy rate is above five percent. How did this come about? Billions of taxpayer dollars were used to rebuild thousands of abandoned housing units in the Bronx, stabilized units which recently have flooded the market. The private sector must now compete for tenants against these thousands of renovated units. In many cases legal regulated rents now exceed what tenants will pay and can pay. For example, owners cannot collect more than $450 to $500 a month for a one bedroom apartment. In many cases long term occupancies, coupled with unrealistically low rent guideline increases, have kept those rents below reasonable and necessary levels. Also, remember that owners don't only face marginal rentals, they must deal with a burdensome and costly bureaucracy which alone has put many small owners out of business. The Bronx offers abundant and affordable housing for those who complain that Manhattan rents are too high or who worry that proposals for deregulation in Albany will cause residents to flee the city. The Council must take steps to end our archaic and destructive system of rent regulations, especially in the face of a vacancy rate in excess of five percent in the Bronx. If not, the Council cannot be surprised or offended if Albany takes the initiative into its own hands, particularly in the face of a recent groundswell of editorials calling for major revisions in the rent laws. I hope Council Members read the New York Post, the editorial of 12-9-96, "Time to End Rent Laws," stating, "Fifteen plus years after the onset of rent regulation in New York City, it's all but impossible to find an honest defense of the current system indicating that rent regulations have all but wrecked what should be a driving market but effectively removing the private sector incentives to build new housing." We are told rent regulation contributes substantially to the deterioration of existing housing stock by preventing landlords from passing operating cost increases onto tenants in a reasonable and timely manner. What City Council Member read The New York Times editorial of 12-8-96? Mr. Bruno is right to call for decontrol. Rent regulation has not served New York City well, discouraging investment, the upkeep of properties, reducing the tax base, allowing well-to-do tenants to pay very little rent for large apartments. I hope you did read the New York Post editorial, 12-6-96, which cites many politicians, former mayors among them, and celebrities living dirt cheap while the truly disadvantaged cannot break into the system. And there's more. We read the Staten Island Sunday Advance editorial of 12-8-96 or the Daily News, 12-12-6, article quoting Nelson Dennis. If we are to maintain the existing housing stock, ladies and gentlemen, action must be taken. It profoundly is hoped that the City Council will have the guts to take meaningful action before Albany moves forward. Thank you. ACTING CHAIRPERSON MICHELS: Mr. Laub, you cited a lot of editorials. Have you read this editorial? It's called the tenant -- it's an editorial, it didn't support your position. MR. M. LAUB: There are positions that aren't truly supported here -- ACTING CHAIRPERSON MICHELS: It's more important that we hear what you're doing. One of the things that we hear from landlords as the largest complaint is that they're not making their operating expenses. Is this something that s a real problem? There's some dispute as to that. Now, one of the complaints, because we have said if you're not making your operating expenses, and you certainly should be making a reasonable profit, an eight percent profit under the law, or you can make an application for a hardship, and then the response is all to the effect, well, it's too difficult, we have trouble doing that, they give us a hard time. But why don t you, instead of trying to repeal rent stabilization, why don't you try to reform the landlords who are having a tough time? We believe they should have the wherewithal to run their buildings, to buy oil, to do the rehab. Why don't you try to do something about the law that you claim prevents you from getting your eight percent from the hardship? I never could understand that. MR. M. LAUB: Are you making a statement or asking a question? ACTING CHAIRPERSON MICHELS: The question is, why don't you? MR. M. LAUB: May I respond? I think we should attack the disease and the disease is what has really caused -- why don't we ask ourselves, why do people run away from a good economic thing? And unfortunately, you talk about the hardship, many owners, especially small owners, are not sophisticated enough to go through the hardship process. ACTING CHAIRPERSON MICHELS: Let's make it easier, do something about that law that you complain about constantly. I have never seen a proposal from the real estate industry to do something about the hardship provision in the law, ever. If you can't cure the disease, as you call it, let's at least treat it. MR. M. LAUB: But you're always looking to treat instead of curing it. ACTING CHAIRPERSON MICHELS: But you're not looking to do anything -- one of the things you don't acknowledge and that which everybody objectively acknowledges, those who are not in rent control or in stabilization, and that is the most stabilized communities in this city are rent regulated neighborhoods. MR. D. MARGULIES: I'm Dan Margulies. I'm going to testify -- ACTING CHAIRPERSON MICHELS: Mr. Margulies, welcome. MR. MARGULIES: Thank you. I'm Dan Margulies, executive director of CHIP, Community Housing Improvement Program. In terms of the hardship provisions, as Mr. Laub said, our focus has always been on the disease rather than the symptom. Hardship is a symptom that the rent regulatory system that doesn't work. But in deference to the fact that there has been regulation for some time, we have actually proposed several reforms in the hardship provisions over the years. These have generally been proposals to either the Administration's DHCR or the legislators in Albany. We have supported a variety of bills and administrators of reform. I personally served on a subcommittee on the hardship issue at a DHCR advisory committee for about a year and a half. We worked on the formula within the existing statute. One of the conclusions we reached, which is something we've tried to address in Albany, is that even if you can make the process simple, the current hardship on stabilized units only provides for a capped increase up to six percent a year, and you could have the anomalous situation where an owner who is losing money could actually win a hardship and continue to lose money for several years after winning it and getting the increase. You also have, as was earlier stated, bureaucratic problems that the agency doesn't seem to be able to lick. The estimate is that it costs three to $4,000 in accounting fees to even fill out the existing forms adequately for the agency -- ACTING CHAIRPERSON MICHELS: You're telling me all the defects but I've never seen a proposed legislation -- MR. D. MARGULIES: There are bills in Albany. I would be happy to send copies to you -- ACTING CHAIRPERSON MICHELS: Time and time again we go before the Rent Guidelines and we say we are sympathetic to the small owners, as a matter of fact we believe that the large owners are taking advantage of the small owners. You're trying to cure what you call a disease which I don't think is a disease with a sledgehammer instead of a scalpel. MR. N. DEL GRECO: Mr. Chairman, members of the committee, my name is Nunzio Del Greco, the executive vice president of the Bronx Board of Realtors. Members of the Bronx Board of Realtors manage or own tens of thousands of apartments throughout the Bronx, Manhattan and Westchester. Rents will not skyrocket if they are deregulated -- ACTING CHAIRPERSON MICHELS: We want to hear all these arguments, but I really want to hear -- MR. N. DEL GRECO: Just for areas outside of Manhattan there is no difference between average, regulated and non-regulated rents. Rent regulations have failed to improve the quality or increase the quantity of the housing in New York. The City Council has the authority to decontrol any class of housing which has a vacancy rate exceeding five percent and has indicated that there is no emergency and that number is above five percent in the Bronx today, depending whose numbers you read. Burdensome bureaucracy imposes even greater expenses to property owners requiring additional employees just to work on the paperwork. The Bronx, as has been stated by Mr. Laub, offers abundant and affordable housing for those who claim that the Manhattan rents are too high. The Bronx Board of Realtors and the New York State Association of Realtors are opposed to regulations which increase the cost of goods and services as well as the cost of government. Thank you for your time. ACTING CHAIRPERSON MICHELS: Thank you. MS. B. HABER: I am Bonnie Haber, president of CHIP, Community Housing Improvement Program, Inc., and an owner-operator of middle class housing in Upper Manhattan and the outer boroughs. There is no housing shortage in the outer boroughs. One-third of the rents in my buildings are already at market rates. In order to avoid vacancies, I have buildings -- I'm sorry -- ACTING CHAIRPERSON MICHELS: Just relax, you're among friends. You said something about northern Manhattan. I hope you're not including that as an outer borough, because I'm from northern Manhattan. MS. B. HABER: I know you are. ACTING CHAIRPERSON MICHELS: We consider ourselves part of Manhattan. MS. B. HABER: One of the greatest problems of this whole issue is people are looking at what happens below 96th Street instead of areas such as yours. ACTING CHAIRPERSON MICHELS: I must add the fact that we are still one city. MS. B. HABER: Yes, we are, and the majority of it is above 96th Street and the outer boroughs. Anyway, there is no housing shortage in the outer boroughs. One-third of the rents in my buildings are already at market rates. In order to avoid vacancies, I have negotiated with one-third of my tenants for new leases as well as renewals and given them preferential rents, below the legal amount I could charge. Less than one-third of my apartments are significantly below market rent. Rent regulation creates costs which are a waste of money. I have an extra person in my office just to do the DHCR paperwork. When I have to go to Housing Court, it often taxes six months, and thousands of dollars, spent just to prove the I's are doted and the T's crossed on my DHCR paperwork, an unnecessary delay and expense. This money would be better spent on building improvements I would like to make, rather than just doing the necessary repairs to maintain the properties. If rents were deregulated, most tenants in place could pay some increases to bring rents from the four to $500's to the $600's for a one bedroom apartment, or from the four to $500's to $800 for a two bedroom apartment. These increases would make the difference in getting a new roof on a building this year instead of next year, and would save tenants as well as the owner the inconvenience of having to patch recurring leaks. How do I know most of my tenants could afford these increases? For years, my father before me, and now I, screen new tenants very carefully, particularly because with rent regulation they become tenants for life. So when we accept a new tenant, we know they can afford more than the lower than market rent we were forced to charge. It would not be a hardship for most of these people to pay increases of $50 to $200. For those people who couldn't afford to pay the increases we should have, after their leases expire, we would negotiate their rent. I have good relations with my tenants. They come to me if they think a rent increase is too much even with just the current legal increases. Some have requested lower rents and I have agreed to it. I'd rather have a good tenant stay and pay a little less than have the apartment vacant for even a month and take a chance on a new, unknown tenant. I know there is a concern about people being dislocated. I would really like to assuage that concern. There's no reason for my relationships with my tenants to change just because rent regulation is ended. I, as most owners, would rather negotiate with tenants I have now than lose them. It is costly to keep empty apartments. And, contrary to some people's beliefs, there are not thousands of people waiting in the wings, willing and able to pay a lot more rent than our current tenants. As I said, one-third of my rents are at market for their neighborhoods. People are not beating on my door offering to pay more. Ending rent regulation would lead to building improvements beyond the minimum necessary. It would enable owners in this city to provide desirable housing at a fair rate, as well as encourage investment in new units. Most important, please remember --Council Member Michels, you too -- please remember, we are business people who know that without tenants we have no customers, and without customers owners would be out of business. Thank you. ACTING CHAIRPERSON MICHELS: I want to thank you very much for your testimony. If I were to design what I think to be a good owner or a good landlord, a lot of what you say here would go into that design. Thank you very much. MS. B. HABER: I would just like to say to you, Council Member Michels, that just as every profession may have some bad apples, or some bad lawyers or some bad doctors, I'm president of a rather large organization of owners and my owners actually, probably are the people who own buildings similar that the people here live in. They're not high rise luxury buildings that can get $2,000 a month. And of my organization of 2,500 owners, I would assure you that the greatest majority, perhaps -- there's always a bad apple in every group, I can't speak for the whole group, but most of them are good owners and they are not looking to put people out on the street or to gouge people. We take care of our tenants. And my tenants would tell you that I do and they don't have any fears, the people that live in my building have no fears of what would happen if rent regulations ended. ACTING CHAIRPERSON MICHELS: One final comment, there is no reason why a person like yourself cannot exist along with rent regulation. And you've shown it. You've become president of a very prestigious organization, therefore you must be doing something right. MS. B. HABER: The reality is, and it isn't just money because we keep negotiating on rent increases, the reality is that the problem of rent regulation is that it hurts tenants too who are good tenants because they suffer. When I spend thousands of dollars going to Housing Court for someone who really just doesn't want to pay their rent and it's not a matter of their having a true complaint, that costs thousands of dollars that I have to waste in Housing Court that could be spent, and I would gladly spend it on, for example, I have a building in -- ACTING CHAIRPERSON MICHELS: Unfortunately that's not before us today. MS. B. HABER: That's important -- ACTING CHAIRPERSON MICHELS: Because you have the same problem with the tenant who is not under rent regulation -- MS. B. HABER: When their lease expires and they're not a good tenant, I can get rid of them. That's different. The difference is that rent regulation is harmful to good tenants. For example, I had a tenant in a building last year who harassed the other tenants and I could not get rid of him, and he was harassing an elderly citizen who lived below him. She was so petrified, she wouldn't even sleep in her apartment. And it doesn't end. This man's lease couldn't be expired because of rent regulation, so it hurts the good tenants. ACTING CHAIRPERSON MICHELS: I don t want to continue this except to say that your remedy lies elsewhere. We've got to continue the testimony but I just wanted to say that I did appreciate your testimony. Thank you. MR. D. MARGULIES: My name is Dan Margulies and I am executive director of CHIP, Community Housing Improvement Program. I'm here to urge the Council to accept reality after 54 years. New York City does not have a housing emergency. While no one would argue that we have a particularly healthy housing market, our housing problems haven't been and won't be solved by rent regulation. There is almost universal agreement that rent regulation leads to poor quality housing and less of it. That might be acceptable for a brief period of time if there were offsetting benefits. There haven't been, not in more than half a century. New York State statutes arbitrarily define a housing emergency as a vacancy rate of less than five percent in any class of housing. I don't know what is magic about five percent, but the Bronx now has a 5.4 percent vacancy rate, according to the 1996 Housing and Vacancy Survey. By the statutory definition, therefore, there is no housing emergency in the borough with the lowest median income, the lowest rents and, by several measures, the worst housing quality. Citywide, the vacancy rate is reported as over five percent for apartments renting for between $600 and $899. No emergency there, either. Housing and Vacancy Survey numbers make it very clear that low and moderate income New Yorkers have housing choices in the Bronx, Brooklyn, Queens, Staten Island and Manhattan above 96th Street. So ask yourselves, is it worth distorting the entire housing market to make housing affordable at the Manhattan core? Before you decide, look at the attached table, drawn from the 1993 Housing and Vacancy Survey, which is the latest to provide neighborhood specific data on median contract rents and median renter income. The highest income renters in the city already live on the Upper East Side, in Stuyvesant Town and Greenwich Village and, appropriately, they pay the highest rents. The next highest income group in Manhattan lives on the Upper West Side, but they pay lower median rents than people earning half as much in Jamaica. Does anyone here really believe that, if rent regulation ended tomorrow, building owners could find a wealthier group of people to replace the existing tenants on the Upper East Side? Are there 89,000 Saudi princes waiting somewhere for rental apartments? Apparently these people know the identity of 89,000 Saudi princes. I don't. For that matter, as owners here today from the outer boroughs will tell you -- and vacancy survey confirms -- Upper West Siders aren't clamoring to pay $1,000 for two bedrooms in Morrisania or Bedford-Stuyvesant. The fear that ending rent regulation would lead to widespread dislocation is unfounded. The fear that continuing regulations will further damage the city's housing stock is very real. Rent regulation was a mistake. It's time to get rid of it. Thank you. CHAIRPERSON SPIGNER: Thank you all. Karen Stamm. Laurie Marin. Come on up, please. Identify yourself for the record. MS. K. STAMM: My name is Karen Stamm. I'm the managing attorney of the East Side SRO Legal Services Project. And on behalf of the tenants of rooming houses, lodging houses and hotels on Manhattan's East Side, we urge the Council to continue rent regulation. Our clients face not just a housing crisis, a housing emergency in the old sense but they face a literal onslaught. Owners are illegally converting buildings, turning SRO units in luxury hotel units for the tourist trade. The tenants are being actively forced out. And all of this is happening below 96th Street. About 90 percent of our clients are on some kind of fixed income, either public assistance and/or SSI income, and their maximums are somewhere around $560 month on average. Others work in minimum wage jobs or they work sporadically. They are already paying far more than 50 percent of their meager incomes for rent. SRO tenants are as endangered species, as are their buildings. Just to prove that, the statistics clearly show that a decade or more ago there were 150,000 SRO units and today there are somewhere between 30,000 and 40,000 left. For our clients life would be impossible without rent regulations. The tenants face harassment, overcharging, poor conditions and unlawful evictions. Without the entire structure that's set up by the rent laws to remedy those kinds of problems they would have no way to fight back. The tenants are very greatly dependent for their continued housing on rent regulation and the structure provided by the rent regulation law. Rent regulation is not only a matter of rental level but is also a matter of, in the words of the statute itself, preventing dislocation, taking care of the general welfare. And the rent regulations do that by providing limits on evictions and remedies for failure to provide the services due to the tenants and enforcement against landlords who harass their tenants, and they do that in order to make sure that the rent levels which by law are not evaded. We all know the vacancy rates are lowest for the units with the lowest rents so whenever they may be generally they are lower for this group of tenants. And these people know they don't have housing alternatives. We get calls today, weave been getting them for months, from frightened tenants who listen to the news who are afraid of what Albany may do, who are afraid what may happen here. Lastly, one wouldn't normally think of luxury decontrol and the issues raised by other people here today about tenants with very high incomes or rents above $2,000 a month. They do have an effect, even on SRO tenants. We have found that owners have been fraudulently making inflated claims for individual apartment improvements to bring the rents close to or doing it repeatedly within the range of the magic $2,000 a month number. And remember, in order to do this landlords don't need any pre-approval from DHCR. They don't go through any process, they just do it. And if the tenants want to protest it's a totally tenant driven system. So the system would have to do it from an advocate, go to DHCR, raise it in court and be able to follow up on that, something that's not always easy to do -- COUNCIL MEMBER MICHELS: And of course that's a tenant who just moved and in and wants an apartment. MS. K. STAMM: Right, and that tenant may not know about it for a very long time and may overpay greatly and may exhaust a very meager income in the process of doing it and expose him or herself to an eviction as a result. For example, in the SRO world you can get there fairly easily a rent of somewhere around $70 a night and DHCR as a stabilized rent will invoke that form of deregulation. Recently, we even found an un-itemized bill provided by the landlord in the amount of $11,000 worth of improvements to a room done on a vacancy, supposedly including work to a bathroom that was not accessible to the tenant involved. This bogus improvement doubled the rent, and with the goal of $2,000 in sight they only have to do it a few times until they get there. I think it's easy for all of us to imagine what will happen to the tenants of Manhattan's SROs and elsewhere throughout the city with rent regulation no longer able to protect them. Thank you. MR. A. DI LOLLO: Good afternoon, Chairman Spigner and members of the committee. I'm speaking on behalf the Laurie Marin of the West Side SRO Law Project this afternoon. We strongly support the bill. We are, however, very concerned about some changes being already rooted in Albany that may greatly compromise the rent regulations and greatly reduce their efficiency. Approximately 50,000 of New York's most vulnerable citizens live in rooming houses and SRO hotels in an atmosphere that is already rife with illegal evictions, appalling conditions, rental over charge. The only meaningful protection that these tenants have are the rent stabilization laws in their entirety. I know of no SRO tenants who have a second house in the Hamptons or the Berkshires. One of the possible compromises being rooted is vacancy decontrol. This will in any form have a devastating effect on the SRO housing stock, not to mention the tenants. Tenants move in and out of SRO housing far more quickly than in apartments. In 1993, A.J. Blackburn found that nearly 50 percent of all tenants had lived in their current accommodation for three years or less. Now vacancy decontrol would give the landlords an enormous incentive to use strong-arm tactics to force tenants out through harassment, intimidation, loss of services, financial pressure. Now this is all on a population which is a highly vulnerable population to such tactics. Another compromise also being rooted is mandatory deposit of rent in Housing Court. Now the rate of overcharge in SROs is staggering, with landlords taking advantage of the high turnover rate of tenants to take huge increases that they're not entitled to. Many rooming houses have never even been registered with DHCR. Now the result is in a large portion of Housing Court cases, if this is passed -- CHAIRPERSON SPIGNER: Sir, our agenda is just too many people have yet to speak for us to have strayed that far from the agenda today, so if you'll limit yourself within reason to the major focus of our discussion today I would greatly appreciate it. MR. A. DI LOLLO: The point I was making there is that the judge must retain the discretion that they have in regard to mandatory -- COUNCIL MEMBER MICHELS: That's an Albany issue. MR. A. DI LOLLO: I understand it is. It's certainly in the City Council before -- COUNCIL MEMBER MICHELS: We did not act on it. MR. A. DI LOLLO: That's good, and please continue to not act on it. If the rent stabilization laws are not renewed, the consequences for the SRO population will be devastating, the costs of which will have to be borne by the city, the social and financial costs of which will have to be borne by the city for many years to come. Thank you. CHAIRPERSON SPIGNER: Thank you. Adam Weinstein. MR. A. WEINSTEIN: I'm also from the West Side SRO Law Project. I just want to emphasize that many of the tenants have been in buildings for a very long time. And you're asking about moving seniors out of their rental, subsidized SRO rooms and asking them to relocate in their sixties and seventies to new communities. Most of the tenants who I work with have incomes of around five or $600. They're not going to find other housing in New York. So we are looking at some of the most vulnerable people in our society. On behalf of the SRO tenants on the Upper West Side, I hope that you will keep rent stabilization so these people will be protected in their homes. CHAIRPERSON SPIGNER: Raquel Cook Brown. Identify yourself for the record and please give us your testimony. MS. R. BROWN: Good afternoon, Chairman Spigner and other members of the Housing and Buildings Committee. My name is Raquel Brown, a small property owner and member of the Small Property Owners of New York. I will be speaking to you today on behalf of the president, Roberta Bernstein, who due to illness regrets that she can't be here today. There are a lot of people here today who may be at opposite ends of the housing continuum but who I'm certain would all agree on one thing, housing in New York City is a mess. It's just that they would disagree on the reasons for that mess. The advocates will tell you that nasty landlords need more regulation, that we don't have enough. Bear in mind that these same advocates would not want to see rental housing remain in the private sector. They know the shortage, the way to get housing into government's hands is to regulate it to death. Regulation has caused our housing shortage. One of the main reasons we're only getting approximately 4,000 new units a year instead of the 40,000 we need is that regulation impedes the assembly of sites for new construction, or even rehabilitation. If you don't think this is so, just read the DHCR's operational bulletins and policy statements on this issue. Regulation keeps tenants and their friends and families in place while locking out newcomers to New York. Since almost no one moves who lives in a low rent, regulated apartment and very few units are being built, the housing shortage worsens, the shortage worsens, the vacancy rate remains below five percent, and advocates can say with pleasure that a housing emergency exists. And they demand that controls be extended. It is time for the City Council to be brave, protect the elderly, the infirm and the poor, but through government, not through individual owners, as it is now. And finally, the time has come to deregulate all housing as soon as possible. If this committee is afraid of recommending decontrol to the City Council at large, then recommend regulation of units upon their becoming vacant. But deregulation must happen if New York housing is to survive. Thank you very much. MS. H. DANIELS: I am Helen Daniels and I am chairperson of the Black and Latino Coalition. As many of you know, our coalition is made up of members and people who live in communities where their properties are located. We reflect the diversity of New York City. As usual, we want to say thank you for having these hearings again, and again I come back and say I do hope this is the last year we have to come back to these chambers on this issue. Because so many speakers have spoken before on some of the issues that I too was going to raise on some of these very vital points, I want to submit my testimony but I want to pull away from my written testimony and address some of the other comments. It's interesting to hear that we have renters whose incomes have risen while their rents have increased, but not increased proportionately. Therefore, I am hearing people say as their incomes have increased the rents have increased more. However, what we all forget, and I have not yet heard mentioned, that the owners who own those properties still have to pay to maintain them. Now in order to maintain those properties the monies must come from somewhere. And where do those monies come from? The rents that are collected from those buildings. The buildings must carry themselves. Rent regulation as we know it today must end now. The other thing I had heard today that concerns me is people are saying that as renters they have families to support, children to educate, they must keep a roof over their heads. Well, guess what, folks? The people who own those buildings have the same concerns. Those who own the buildings, their incomes come from those buildings. They must bring income in. They too must support their families. The city as we know it today, the current rent regulation system, must end now. I also have to ask, after 50 years of a perceived crisis, after 50 years of a current system in place, if the system we have in place today has not addressed the issue, then is it not time to look for something else to address the issue? The current system as we know it today must end now. Let's bring our housing policy into the next century. Everyone is talking about the next millennium. Well, New York, it is time for housing to go to the next millennium. Therefore, it means it is time for us to think of another system to handle housing. Rent regulation as we know it today must end. And just as a point of personal privilege here, I must say it really distresses me to hear a comment made about how the system impacts people of color. I am a person of color. My house is in and I live in Harlem. My members live in communities. They are people of color. Believe me, we are very much concerned, not only about our problems, not only about our personal investments, but we're also concerned about the communities where our properties are located and where we live. And that is why we say the current system of rent regulation as we know it today must end now. Thank you. CHAIRPERSON SPIGNER: Joanne Wander. Velda Fuller. Carolyn Daniel. Valerio Orselli. Those four are the next to testify. So would you stand at the microphone and give us your testimony, and we would appreciate it if you would move along. MS. I. HARNDEN: Good afternoon. I'm Ida Harnden. I'm here representing the Joint Public Affairs Committee for Older Adults. JPAC is a coalition of older adult representatives from over 120 senior centers and community groups throughout metropolitan New York. The most pressing issue facing older tenants in New York City today is the scheduled sunsetting of the tenant protection laws in June of 1977. JPAC is unequivocally opposed to any such action against tenants of all age groups, revoking or weakening the present tenant protection act which includes both rent control and rent stabilization should be unthinkable. JPAC urges that tenant protection laws be made permanent, not destroyed or weakened. State rent regulation expires on June 15th of 1977. Those rules established rent control and stabilization for one million apartments around the state, about 90 percent of which are in New York City. It is the low and moderate income elderly, 75 percent of whom are women living alone on a fixed income, who are in most need of relief from escalating rents. The scarcity of affordable housing for all persons of low and moderate income is untenable, but for the elderly it is unconscionable. As with all tenants, the key problem is the gap between income and rent. This gap widens each year as the income sources of the elderly fail to increase while rent soars. Without current tenant protections, viable, active senior citizens, capable of and desirous of living independently, would be forced into unnecessary, premature institutionalization. In enacting tenant protections, the Legislative saw and responded to the critical need for the preservation and improving of affordable housing for all ages. Tenant protections, including rent regulations, have and should continue to help to prevent unjust and prohibitive rent increases, arbitrary evictions and unsafe living conditions. Allowing these laws to expire will remove all existing tenant protections while giving landlords unlimited power to force people out of their homes. Landlords have the protection of housing laws that allow them to file for legitimate increases such as lease renewals, increases for major capital improvements, increases under the maximum base rent law, which, incidentally, was specifically created to reimburse landlords for unusual expenses and should have replaced the MCI instead of adding another ambiguous cause for an additional rent increase. In addition, any landlord who can prove by opening his or her books that their holdings are creating a true hardship can also file for a hardship increase. The tenant protection act was passed out of need. The need still exists. A decent, affordable place to live is not a privilege, it is a right. No one should have to choose between paying rent, buying food or needed medications. I hope that you will not just listen but have really heard. I speak not of statistics which I know are accepted or ignored but a face on each number, a person who could be your friend, a neighbor or even a relative. May I add that as a mother I know my children are concerned about me but as a mother I am concerned about my children. This is an issue for all generations. Thank you for giving me this opportunity. CHAIRPERSON SPIGNER: Thank you very much. Next. Gail Bell. MS. G. BELL: Before I read my statement here, I just want to know if anyone in this room right now had really put in their mind looking out the window on your street where you live all the buildings that are on your street, if they would be empty and all of those people would be on the street, what would be going on. There would be total chaos. That's what is going to happen if these rent laws go down. There's going to be total chaos. I'm not for rich or for poor, I'm for everyone. Everyone does not make big money, everyone does not make a little money. But this is a situation I'm faced with, and I know a lot of people right in this room could be could be faced with the same one. So I will read it to you. At this time my rent is $441.93 with a heat charge of $11.82, which makes my rent $453.75. This is not a high rent for many people, but now it happens that my monthly bills and my monthly salary have met each other only to put me in the streets at some time to come. This could be this year, next year or maybe the following year. I am being priced out of my apartment. Who can I see about this situation? And by the way, I have called many different people from different housing authorities to the city, to the state, to find out what I can do and nobody can help me. I'm 53 years old and I'm looking forward sometime in my life to retirement. I can't even look forward to the next two years to find a place to live, let alone to be able to retire ten years from now. I'm an American citizen. I was born and raised here. I've worked all my life. I vote. I'm not in any trouble, I'm not a criminal. And why should I have to pay all of my paychecks for my bills and my rent, which is just what's happening to me? If you get sick, can you go to a doctor with 649? If you need extra food can you go with $49 and come home with anything? This is serious, this really is frightening. Okay, all right, it's a very serious situation for many people. We need these controls. We really do. If we don t have these controls we re going to have homeless. It's just a very serious situation, it's very frightening and very upsetting. CHAIRPERSON SPIGNER: Identify yourself for the record. MR. V. ORSELLI: Good morning, Chairman Spigner and members of the City Council. My name is Valerio Orselli, executive director the Cooper Square Committee on the Lower East Side of Manhattan, which is the neighborhood preservation company dedicated to planning and organizing for the community, helping to preserve and develop affordable housing. I want to make a few points. I will try to avoid what has already been said before. First of all, you need to be aware that we're talking about rent regulation, in our community about nine percent of our population. Ninety-three percent of our people are renters. Secondly, subsidies. Much is being made about how rent regulation helps to enrich not the poor, the majority of our people are low to moderate income even though we are in Manhattan, with an income of about $24,000 per year for a family of four, and already way over 50 percent pay more than 30 percent of their income in rent. So it's easy to follow the consequences of rent deregulation. It is mentioned that we have a housing emergency because we have a vacancy rate of less than five percent. But it is not mentioned enough, is the vacancy is concentrated in the upper end of the housing market. As to rents in our community for such housing ranging from as low as $900 for a studio to $1,400 or $1,600 for a one bedroom and $1,900 or more for a two bedroom, if you can find them, of course. This is the Lower East Side of Manhattan, not the Upper East Side, mind you. I want to mention something that hasn't been mentioned before. The situation with the affordable housing stock is being worsened by initiatives at the federal level to privatize public housing, currently Resolution No 2 by Congressman Lazio (phonetic). This initiative has the support not just of our President but also our Republican Mayor who has signed the bill which would require families to move out of their homes after five years, back-to-work requirements, and of course having to pay significantly higher rents. Is he looking at two sides of crisis, rental housing which is privately owned or housing which is publicly owned? So if you think you have a crisis in the making, think again. As it doesn't hurt to say again, lack of affordable housing is due not to rent regulations but to lack of housing development. We can't rely on private initiative alone to develop affordable housing because what they will do if they have the money is build more market rate housing where the need is mostly for low to middle income housing. You want to know this Administration's position is on developing affordable housing? Just look at the current HPD budget compared to previous years for developing affordable housing in New York City. We need to retain rent regulations, we need to repeal Local Law 4. I want to end with one last point. Several people said the landlords, you want higher rents, open up your books, show us your profits, and of course that hasn't happened yet. I have been fortunate to see some of those books because I'm involved in a project with the Resolution Trust Corporation looking at buildings that went to foreclosure so we saw the financial records of many a landlord, and you know something very peculiar, those books show an income to expense ratio -- CHAIRPERSON SPIGNER: Would you conclude, sir? MR. V. ORSELLI: This is concluding. Three or four to one, they got as much as three or four times money in rents as they expended in the buildings. So why do they go to foreclosure? Because they bought the building to sell it for an even higher price with the expectation that the next buyer would do the same again and again until the market crashed. If the people in Albania were getting taken by that scheme and demanding the government do something about it, I think it's time for the City Council to do something about the rent regulation in our homes. CHAIRPERSON SPIGNER: The next four people to speak are: Mansour Zandieh. Liliana Ramehoff. Colin Rudd. Adrian Teiman. But before we begin again we're going to have a short break. There will be a short break in the action. (Whereupon, at 5:00 p.m. a recess was taken.) (Whereupon, at 5:20 p.m. the hearing resumed.) CHAIRPERSON SPIGNER: Mansour Zandieh. Biliana Kamehoff. Colin Rudd. Adrian Teiman. Please take your place at the microphone. MR. C. RUDD: My name is Colin Rudd. Good afternoon. I am a first time renter in a rent stabilized apartment and I wanted to say that I strongly support rent regulation and stabilization. In my most recent experience with my landlord, he charged me $7,200 worth of renovation fees in order to be able to raise the rent. He said I would get a new refrigerator, a new oven, a new kitchen floor, a new kitchen counter and a new kitchen cabinet and a new bathroom. When I got in the apartment all I got was the new bathroom and the new kitchen sink. I went and I talked to the landlord himself rather than go to the agency and he presented to me, after saying that the items written on the lease were just a mistake, he offered to cross them off without adjusting the rent. He said, I can cross it out and it's just a mistake on my part. And I didn't know exactly where he was going with me and I went to see him and he presented me with a laser printout of an invoice for the $7,200 that the contractor had given him for bathroom work exclusively. So now he forgot about the kitchen and on this invoice which was given to him supposedly by a contractor who had the same address apparently as his management agency -- and when you called the contractor and asked for his telephone they didn't have the information -- he presented me with an invoice of all the items done to the bathroom. And next to these items there was no price. So it wasn't an itemized invoice. And during our conversation he kept on asking, don't you have heat? I think $500 a month is a fair rent, et cetera, et cetera. And it was not a threat but you get these kinds of feelings from people. So my only option I feel is to go and apply to do a rent increase verification. Now I'm not arguing that $500 a month is an unfair rent for a one bedroom apartment. I live on Convent Avenue uptown, 133rd. If nobody there wants to pay more -- I'm not arguing with the rent but I think that it is important for rental increases and for rental prices to be regulated by a government agency so that this kind of scamming cannot happen. And therefore if those kinds of regulations come along with rent stabilization then I support rent stabilization. CHAIRPERSON SPIGNER: Thank you for your testimony. UNIDENTIFIED SPEAKER: Where is the board? Why do people talk to an empty room? When the people are coming to testify about their problems, you disappear. CHAIRPERSON SPIGNER: Moving along -- UNIDENTIFIED SPEAKER: We pull the lever in the election booth. CHAIRPERSON SPIGNER: Please, anyone who wants to leave is free to leave, is free to leave. Anyone who wants to testify will be heard. I'm not adjourning this meeting until everyone has testified. So if you want to leave, please feel free to leave. Marcy Boucher. MS. M. BOUCHER: Good afternoon. Thank you for the opportunity to be able to speak before the Council. My name is Marcy Boucher. I'm a disabled small property owner here in New York City. I came here this to hearing like many other hearings in the past to try and tell you some of our problems as small property owners in hopes that some things could be done to rectify them. I realize that both tenants and landlords have problems. I do think in this society that we should try and work together. However, I do feel that the odds against small owners way outweigh those of tenants. As a prior tenant, I was in the position of being the president of a tenant organization at one time. I'm now in the position of being an owner of a building. I find I had many more rights as a tenant than I do as an owner, whether it comes to rent laws, whether it comes to the courts, whether it comes to fairness by Councilpersons that represent my area. I wish that there was some way that the Council and other people in the city could really look at the problem as a whole and realize that if we don't learn to work together this city is going to crumble. It reminds me when I saw -- (inaudible) -- lost to abandonment and crime, and we all know what happened to Detroit. (Disruption from the audience.) MR. M. BOUCHER: I love this city and I want to see it work, but until certain people, whether it's politicians or tenants or landlords, learn to work together, we're going to find that we have the worst city in the world for being able to afford anything here. As a small property owner in the past 12 years that I have owned my building as a disabled person, I have collected all of about two rents in my building. I have paid out of my own pocket, out of my disability monies, all that I have. I am on a limited income. And you will have me on the street and you will have to afford a lot more for me than you will for a lot of your tenants if you don't start looking at the ability for people pay for apartments versus the expenses on buildings. You're going to lose a lot of your base. You can't give buildings away to TIL programs and let tenants have the apartments for $250 and waive all the taxes and expect the city to survive. I strongly urge all of you as responsible Council people, no matter what your position is politically, no matter where the votes are coming from, that you look at this in your heart as to what is going to happen to our great city. There are programs that can help the poor, there are programs that can help the elderly, and I do not see them being put out on the street any more than someone is disabled. But in essence what you are doing to me is putting me out on the street. And it isn't that I haven't tried. I have a building where people in my building have houses in Puerto Rico, Pennsylvania, Washington D.C., own Porsches, all have computers, a lot more than I have, and yet I'm paying all the bills and collecting no rent. In addition, I'm in court the last two years with tenants who have not paid rent even though the court constantly cancels and there have been adjournment after adjournment. When we have small owners, there are losses with lawyers that are charging us any from $175 to $25 an hour, and I have a rent that is $100 to $200. There is no way that this is going to be a surviving game for me or any other small landlord. We desperately need vacancy decontrol for if and when we ever do get any vacancies, that is not going to hurt anyone that already has an apartment, it will help those of us that need some rental income. And anyone that is behind me that can say that they agree that there should be no rent, then they are definitely -- I thought Communism was dead and evidently in New York it is not. CHAIRPERSON SPIGNER: Ms. Boucher, thank you for your testimony. Calling now on Paula Glatzer. Please come up and take the microphone and we would be happy to hear your testimony. Identify yourself first. MS. P. GLATZER: My name is Paula Glatzer. As a tenant I am here to ask you to preserve rent regulations. If rent controls die in New York City I am out of here. I am therefore very grateful that so many Council Members are standing up for the city against the state. But it is heartbreaking for me to have waited all this time for this, prepared this months ago and be speaking to so few people. Thank you for being here, those of you who are. I want to plead with the Council to lead us, you and the Mayor, we need you to say this is our city and how it works, and to fight the upstate people. I often wonder how the people upstate would feel if we voted to raise the mortgages on their long time homes. The Council's extension of the rent laws would extend my life here, but I want to tell you why I am so frightened about being able to stay in New York. I am a native New Yorker and when my daughter was born we moved to a larger apartment even though I was afraid that the rent was too high, but we took the chance because of rent controls. However, over the years of seven and a half percent raises, the rent on that apartment has more than tripled. In the past ten years alone it has doubled. Two years ago, the two year raise was 20 percent. The harsh reality is that some day soon, not at seven and a half percent raises when the two year raises were almost 15 percent, but the allowable, the harsh reality is that someday soon in five, maybe ten years, I will not be able to afford my rent. And what I particularly wanted to say today is that if the Council does rescind vacancy decontrol and even luxury decontrol, I will have nowhere to go. It's hard to believe but when I first moved, people were a bit scared of Manhattan's wild West Side. But I sent my child to local public schools, I shopped in the neighborhood, I became treasurer of my block association and did all the other good things that made the Upper West Side what it is today. But now, like a lot of folks my age, I have been forced to take early retirement from a large, very New York corporation. And some people think I don't deserve to live here anymore, that New York is only for the very rich who can buy their apartments and the very young and the very poor who crowd too many people into one apartment. So I speak not only for the middle class but for the middle aged, asking that you make it possible to us to grow old in New York. And I'm also going to ad lib today and say I'm speaking also for women because when the committee started, I don't know if that was the actual committee, it was entirely men at this table, and it struck me, because I mean no disrespect, but all the people I have been dealing with, from my 90 year old mother-in-law to other single parents like me, the people who are afraid are women. And they've all worked, but they earned little. Their salaries were little. And I'm talking about people above the poverty line -- CHAIRPERSON SPIGNER: I appreciate your comment but we must have a lot of other people who want to speak in a desperately short time. MS. P. GLATZER: Thank you. ************************************************************** Continued...