Tempers Taut On All Sides

NY Daily News, Inman News Features, May 22, 1997
Until New York state Senate Majority Leader Joseph L. Bruno, R-Troy, proposed abolishing the stateís half-century-old rent control laws, few current tenants probably even knew where the law came from in the first place.

Originally designed to protect renters from gouging during the postwar housing crunch in Manhattan, rent-controlled apartments have become as much a fixture of New York real estate as Trump Tower. Currently more than 2 million of the cityís 16.2 million residents live in 1.2 million rent-regulated apartments in which rents are either frozen or only allowed to increase at a rate set by the cityís Rent Guidelines Board. Five percent of the apartments are rent-controlled; almost 50 percent are rent-stabilized.

With the legislation set to expire June 15 in one of the tightest rental markets in years, most tenants are worried.

Horror stories of 400 percent increases are already making the rounds (one West Side tenant whose $916-a-month lease was expiring on his one-bedroom was offered a one-year renewal for $4,000 a month, according to an Associated Press report).

Bruno has said that he was willing to let the law expire rather than cave in to pressure from Democrats, who control the other half of the state legislature, to extend it. However, he said last Friday that he would be willing to drop his demand that rent control end in a certain number of years in exchange for limited "vacancy decontrol" in which rent-controlled apartments could only be inherited by immediate family and for only one generation. Democrats, led by Assembly Speaker Sheldon Silver, D-Manhattan, have said they would rather let the law expire than accept a compromise.

Republican Gov. George Pataki has weighed in with his version of a compromise, which would propose some sort of vacancy decontrol combined with tighter "luxury decontrols." Luxury decontrols would raise rents only for tenants making $175,000 or more; currently such controls allow market-rate rents for tenants making $250,000 or more. Both Bruno and Pataki would exempt elderly, poor or disabled tenants from any change in the law.

Property owners in New York and elsewhere for years have argued that rent controls were a major disincentive for keeping up rental properties and that too many well-heeled tenants have ended up paying puny rents. Last year, California landlords won a major victory when vacancy decontrols were instituted in the five California cities Ė Berkeley, East Palo Alto, Cotati, West Hollywood and Santa Monica Ė with rent controls. Other cities also have decontrolled rents with few of the apocalyptic scenarios predicted for Manhattan.

Tenant advocates, on the other hand, fear that too many renters will be forced out of their apartments. "This isnít just about raising rents," Madalyn Ross of the Queens League of United Tenants told New York Newsday. "Landlords could put (tenants) out even if theyíve paid rent on time for twenty-five years."

But property owner representatives stoutly deny that will happen. "People have these fears of chaos and of renters getting cast out of their homes, and itís a terribly erroneous perception," Queens landlord R. Bonnie Haber and president of the Community Housing Improvement Program, a landlord trade group, admonished in a Newsday article. "If (landlords) donít rent apartments, we donít stay in business. No businessperson wants to deplete their customer base."

With tensions rising all around, and the arguments freezing around party lines, real estate brokers have become the guests of the hour on the cocktail circuit as Manhattanites try to psych out the future. But the always-cheeky New York Observer wasnít one to sweat it, illustrating its take on the situation with a clever parody of an ad for the award-winning musical "Rent." Calling it "the decontrolled musical," the illustration featured Bruno, Pataki and landlords on one side singing "Get hip to the market fundamentals," and a chorus of tenants clamoring on the other, "Donít take away our dirt-cheap rentals."