Deal Doesn't Pay the Rent
EditorialReform: To restore to a former good state; to bring from bad to good. By that Webster's definition, Albany's tinkering with the state's rent laws doesn't qualify.
NY Daily News, June 17, 1997
That's not to say the deal is all bad. Some of the provisions, such as an increased vacancy allowance and a requirement for some rent-strike tenants to pay their money into escrow, nudge the system in the right direction — toward market rents.
But even with the changes, the strangling web of regulations essentially stays intact. And that virtually guarantees that more than 1 million apartments will be covered by the failed system for at least the next generation.
That's hardly dramatic progress. Not in 1997, more than 50 years after the wartime emergency first necessitated rent caps.
This was to be the year all that would change. Gov. Pataki and State Senate Majority Leader Joe Bruno put up a good fight in trying to put the city on the path to a free housing market. But in a triumph of ideology over economics, Assembly Speaker Sheldon Silver's mantra of "no change" stymied the GOP.
In the end, Pataki and Bruno had an option to just let the laws expire, which would have plunged the city into chaos. They chose to be responsible — and responsive to the political realities — and compromise even more than they already had.
So for trying to improve the city's housing stock, which is both crumbling and in short supply, Pataki and Bruno end up suffering in the opinion polls. And for being statesmen instead of ideologues and settling for less than half a loaf, they hand a victory to Silver. Talk about nice guys finishing last.
When Bruno started this process in December, he said he wanted all the rent limits to end in two years. That was the right goal, but too fast. By last week he had agreed to Pataki's moderate plan of vacancy decontrol and luxury decontrol. That would slowly phase out the controls while protecting tenants in place.
The six-year deal, however, corrupts both ideas. On vacancies, owners will be allowed only a slightly greater increase than now from the new tenant, but the unit stays regulated. Luxury decontrol didn't fare much better.
Currently, units renting for $2,000 a month or more are freed upon vacancy or if the tenants make $250,000 a year for two years in a row. That threshold has been lowered to $175,000. That covers only several thousand apartments. Several provisions were aimed at helping smaller owners, and, in time, that could make a difference for some. But market rents are still years off in most cases.
Overall, Pataki and Bruno contend that their main goal has been reached because apartments that become vacant will start to approach market levels. They also say the deal should spur construction and rehab work, pushing the vacancy rate above 5%, which would automatically end all controls.
Maybe. But with the system so obviously broken, this was the chance for real reform. It won't come again for many years.