Landlords' New Lease On Strife

by KIMBERLY SCHAYE, JON R. SORENSEN and MICHAEL FINNEGAN
NY Daily News, June 17, 1997
Landlords erupted in anger yesterday over the rent deal between Gov. Pataki and legislative leaders, calling the pact a crushing defeat after a six-month war for major change.

The architects of the accord, Pataki, State Senate Majority Leader Joe Bruno and Assembly Speaker Sheldon Silver, spun the pact as a victory.

Bruno (R-Rensselaer), who in December launched the battle for "the end of rent regulation as we know it," said the deal achieved many of his aims. Silver (D-Manhattan) said it protected 2.7 million tenants while giving "fair returns" to landlords. Pataki called it "a tremendous victory for all New Yorkers."

But building owners voiced bitter disappointment that the deal failed to scrap rent protections as tenants move out or die an outcome that left tenants gleeful.

"I don't see it as any victory whatsoever, in any way, shape or form," said Roberta Bernstein, president of the Small Property Owners of New York. "It gives us practically nothing."

"We're holding a wake," said Andrew Hoffman, whose family owns the 1,000-unit London Terrace Gardens complex on W. 23d St. in Manhattan. "I don't think it's a good compromise. It's not going to do anything for the people who really need it."

In contrast, jubilant tenants from New York City marched around the state Capitol yesterday shouting, "The rent laws are here to stay!"

"This is an absolute victory for tenants," said Billy Easton, executive director of the New York Tenants & Neighbors Coalition, which mounted a campaign-style attack against Pataki and fellow Republicans to save the laws.

Pataki and legislative leaders last night were trying to nail down final details of the tentative agreement they announced minutes after the old rent laws expired at midnight yesterday.

The Assembly and state Senate initially planned to approve the bill yesterday. But Pataki and legislative leaders hit repeated snags while drafting legal language, and the Senate adjourned last night without voting on the deal.

Assembly leaders still hoped to approve the rent package last night, but a vote appeared unlikely before today.

Technically, the rent laws expired Sunday, leaving tenants without rights to lease renewals and lifting the ceiling on rent hikes for renters whose leases expire after Oct. 13. But Pataki and the leaders said the agreement would apply the new laws retroactively.

Under the conceptual agreement, the annual $250,000 household income ceiling for tenants in rent-regulated apartments would drop to $175,000. It would apply only to apartments renting for at least $2,000.

The luxury-decontrol provision would lift rent regulations on 1,286 apartments, out of 1.2 million.

The deal also would give landlords a 20% rent hike on vacant apartments for two-year leases. And landlords would get a bonus hike for apartments vacated by long-term tenants.

Pataki and Bruno said rents on three out of four vacant apartments would jump to market rates under the plan. But landlords and housing experts termed that estimate an exaggeration.

"This will have much less impact than what it sounds like," said landlord advocate Dan Margulies, executive director of the Community Housing Improvement Program.

About 12% of the city's 1.1 million rent-regulated apartments become vacant each year, but about one in three is already at market rates, said Doug Hillstrom of the city Rent Guidelines Board.

Typically, the same high-rent apartments turn over, while long-time tenants stay in low-rent apartments for years and keep them off the market.

Landlords had banked on a sweeping reform because New York has a Republican governor for the first time since the 1970s the last time there was a major overhaul in rent protections. But Pataki and Bruno dropped their support for the top landlord demand scrapping rent regulations as tenants move or die.

"It's extremely disappointing because we're not going to be in this situation again for 30 years," Bernstein said.

"If the landlords aren't ecstatic or particularly happy, I feel badly about that," Bruno said. "But that's not my mission, to make them happy."