Pataki seeks phaseout of rules for most; plan draws fire on all sides

By Ellen Yan. ALBANY BUREAU
Paul Moses, Michael Slackman and Katti Gray contributed to this story.
May 13, 1997 NY Newsday

Without once saying ``vacancy decontrol,'' Gov. George Pataki yesterday proposed an open-ended phase-out of rent regulations for all but the disabled and the elderly, drawing fire from all sides.

``What we are doing is putting in place a proposal that would provide protection for ninety-nine percent of the tenants . . . and at the same time provide an orderly transfer to the free-market system,'' the governor said about a plan billed as a compromise in the rent-regulation battle. The current rent-control law, the Emergency Tenants Protection Act, expires at midnight June 15.

In a carefully crafted statement, Pataki called for both sides to accept his middle-ground proposal, a plan that would maintain protections for all but the wealthiest tenants as long as they stayed in their apartments. Pataki endorsed allowing landlords to raise rents to market rates when tenants move voluntarily or die.

But while Pataki delivered his plan, tenant representatives - having learned details of the proposal - were outside arguing with the governor's counsel, Michael Finnegan. They said the governor acted too quickly after directing them last Wednesday to work with his office to find common ground on rent regulations, which Senate Majority Leader Joseph Bruno (R-Brunswick) had threatened to end regulation for all but the disabled, poor and elderly.

``Senator Bruno wants to do it like a guillotine; today, Pataki put it forward like water torture,'' said Scott Sommer, chairman of the Metropolitan Council on Housing, which represents thousands of tenants in New York City. ``What little affordable housing is left in New York would be gone.''

Vacancy decontrol, which transfers apartments to the free market after a tenant leaves voluntarily, dies or is evicted, drew complaints from landlords and tenants when it was in effect from 1971 to 1974. Landlords said they saw too little benefit in a system that allowed the tenant to transfer leases to relatives, keeping the apartment rent-regulated for generations. Tenants accused landlords of harassing them into leaving and raising rents precipitously after apartments were deregulated.

Pataki's vacancy-decontrol plan sets no deadline but would end rent regulations for the wealthiest 1 percent of the state's 2.7 million rent-regulated tenants; preserve tenants' current rights to transfer leases to close family members; maintain current rights for the disabled and for tenants at least 62 years old; and allow landlords to charge market rates once the rent-regulated tenant moves out voluntarily, dies or is evicted.

Landlords who try to harass tenants into moving out would for the first time face criminal sanctions, the governor said, and tenants would have to put their rent in escrow if they were awaiting housing court decisions on disputes with landlords.

Assembly Speaker Sheldon Silver (D-Manhattan) was strongly opposed to Pataki's plan and said it was unfair to the middle class. But after blasting the proposal Silver refused to issue a counter offer until Pataki puts his ideas into legislation.

Bruno said of Pataki's plan: ``No it's not acceptable . . . I hope these are opening statements representing where he stands.''

Pataki blasted both Bruno and Silver for being what he said is inflexible on the issue.

``I know Senator Bruno has some problems with some of the provisions. If we're going to solve this problem, he's going to have to move,'' Pataki said. ``I know Speaker Silver has passed a bill that in my view is completely unrealistic, and he's going to have to get realistic.''

Republican Mayor Rudolph Giuliani said, ``I agree with Shelly [Silver]. I'm against vacancy decontrol. I think it's a mistake; I think it can hurt the city long-term. But the governor has made a step forward here in trying to get these discussions off the position they were before, where there was a real fear among New Yorkers that rent control and rent stabilization would end.''

One of the most contentious points was Pataki's nod to tenants' rights to transfer leases to family members - including to some in-laws, nieces, nephews and stepparents. Landlords estimated it would take at least 60 years for the apartments to become deregulated, and tenant representatives predicting less than a decade. That also was the point that angered Bruno, who supports vacancy decontrol without what is known as ``right of succession.''

Up to 413,000 apartments were deregulated from 1971 to 1974, about one-third of rent-regulated apartments at the time. The normal turnover for that period is about 380,000 units. At least 1.1 million rent-regulated apartments exist in New York State.

Tenant activists said Finnegan told them 15 minutes before the news conference that the governor was considering cutting back tenants' transfer rights. But the counsel came back into the room a few minutes later and said Pataki had changed his mind. ``He was jerking us around,'' said Michael McKee, rent campaign manager for the Tenants and Neighbors Coalition.

Tenant groups were also furious over Pataki's escrow proposal, saying landlords use housing court to harass tenants. Currently tenants do not have to pay rent until the disputes are resolved.

Landlord representatives blasted the governor on his proposed crackdown against greedy apartment owners, a measure against what some said happened during the 1970s decontrol. Those who try to force tenants to leave by cutting off heat and other vital services could face up to four years in prison and up to seven years for repeat offenders, Pataki announced.

But with rent-controlled apartments switching into higher-priced rent-stabilized apartments once the tenants move out, ``the incentive is there to harass right now,'' said Frank Ricci, director of governmental affairs for the Rent Stabilization Association, which represents about 25,000 city landlords.

``You haven't had the harassment that the tenant leaders claim you've had,'' Ricci said.

Pataki avoided discussing whether he had any incentives to boost housing construction by saying efforts should first be devoted to resolving the rent-regulation battle. Landlords two decades ago succeed in getting vacancy decontrol in part because they argued it would generate more money to maintain buildings and construct new ones.

HIGHLIGHTS OF PATAKI`S PLAN

-Maintain rent controls for apartments occupied by tenants earning up to $175,000 a year.

-Maintain rent regulation for all apartments occupied by people over 62 and disabled persons, regardless of income.

-Continue current succession rules, giving tenancy rights to a leaseholder's spouse, children, grandchildren, in-laws, parents or grandparents.

-Support ``vacancy decontrol,'' allowing landlords to raise their rents to market rates when tenants move voluntarily or die - but not specifying any specific date to end rent regulation.

-Stiffen civil penalties against landlords who try to harass rent-regulated tenants into leaving, subjecting them to a fine of up to $10,000 per violation.

-Establish new criminal penalties against landlords who try to harass rent-regulated tenants into leaving. A landlord who does so now faces a maximum legal penalty of a year in prison. Pataki's proposal would make a year in prison the minimum and subject a landlord to up to four years if the harassment affects tenant health and safety. A repeat offender would be subject to a seven-year term.