Disputes jam door to rent accord

New York Post, June 17, 1997
ALBANY -- Last-minute flare-ups stalled approval of the state's new rent laws last night, but Gov. Pataki and legislative leaders remained hopeful their deal wouldn't fall apart.

Pataki, state Senate Majority Leader Joseph Bruno, Assembly Speaker Sheldon Silver and a battery of lawyers worked feverishly to draft legislation to extend the rent regulations, while also making key changes.

The Democratic-controlled Assembly and GOP-led Senate did not consider a bill last night, but may do so today.

Pataki and the legislative bosses said it was proving extremely difficult to translate their 11th-hour "conceptual agreement," announced just after midnight yesterday, into print.

"There are some sticking points that are not resolved," said Bruno (R-Rensselaer).

"I'm concerned, but I am optimistic and confident we can go forward, but we're not there," Bruno added.

The 50-year-old rent laws covering 2.5 million tenants expired at midnight Sunday.

State officials said they hoped there would be no evictions or improper rent hikes during the period the laws are dead. They said that when the laws are renewed, they will be made retroactive.

The disputes center around details of several key elements of the agreement: decontrolling wealthy renters, requiring tenants to put rent checks into escrow accounts during disputes with landlords, and deciding who would have the right to inherit rent-regulated apartments.

One area causing big trouble is a measure to decontrol tenants earning more than $175,000 a year and who live in apartments going for at least $2,000 a month. Republicans blamed Silver for trying to tightly restrict the number of people who would be affected, in violation of the handshake deal.

Whenever it is finalized, the rent plan, which lasts for six years, will extend protections for about 99 percent of all rent-regulated tenants.

For vacant apartments, landlords can jack up rents by a minimum of 20 percent. If a tenant has been in the apartment for eight years or more, the building owner can add an extra 0.6 percent increase for every year.

Bruno threw in the towel on his six-month battle for vacancy decontrol, under which landlords can charge market rents when the original tenant dies or moves and there is no legal successor.

Vacancy decontrol became a supercharged issue because Bruno and Pataki sought it as a way to slowly phase out the rent-regulation system by reducing the number of protected apartments year by year.

Bruno said the deal gives a needed shot in the arm to new housing construction not only by raising rents, but by guaranteeing new buildings cannot be brought under rent controls at any time.

Bruno said it was possible that with enough new units built -- it would take more than 21,000 a year -- the city would reach a 5 percent apartment vacancy rate in a few years. If that happens, the rent-regulation system is automatically abolished under state law.

In the meantime, both Pataki and Bruno said at least three of every four regulated apartments will climb to market rental prices when they next become vacant.

Pataki portrayed the agreement as a win-win for tenants and landlords, saying it protected nearly all renters, while also putting more money in landlords' pockets.

"The extremists on both sides are going to be unhappy," Pataki said.

"I have said repeatedly that too many apartments have been kept vacant for too long because they were priced well under market value, which has only served to create shortages and stifle competition.

"This agreement fixes that situation by bringing three of four apartments to fair-market levels, bringing countless units back into the rental pool so that more apartments are available for the middle class, and bringing more fairness to New York state's housing market."

At the Capitol, about 100 tenants rallied in support of the rent-law deal.

"It is a clear-cut rejection of vacancy decontrol," said Billy Easton, executive director of the Tenants and Neighbors Coalition.