A Way to Compromise on Rents

New York Times, May 13, 1997

Only a month before the expiration of New York City's rent laws, Gov. George Pataki has proposed a reasonable compromise to phase out rent regulations while protecting tenants from drastic rent increases. Under the measure he put on the table yesterday, landlords could raise rents freely only after current tenants or their families move out or die. This idea, known as "vacancy decontrol," would be accompanied by another measure known as "luxury decontrol," raising rents immediately for tenants making $175,000 or more. The Legislature may want to tinker with some features of Mr. Pataki's proposal, but over all it deserves support.

More than two million people in New York City live in apartments with some form of controls or regulations. But the rent laws first imposed during World War II have over the years deprived landlords of a fair return on their apartment buildings and led to vast inequities among tenants. The controls have also discouraged developers from building or renovating apartments, thus contributing to the city's housing shortage.

Recent studies have shown that the landlords hit hardest are not those with poor tenants but those in places like the West Side and Greenwich Village, with middle-class or upper-class tenants who can afford to pay higher rents but cannot be charged more than the maximum allowed. Some well-to-do tenants get protection while others, living in apartments that escape the reach of the laws, do not. The need for change in this inequitable system has been obvious for a long time.

The politics of rent control is always sensitive, but this year it is unfolding in an atmosphere of distrust and personal animosity between Republicans and Democrats in Albany. The State Senate majority leader, Joseph Bruno, a Republican, began with a provocative position, suggesting that if the Democrats did not agree to a drastic overhaul he would let the current rent laws expire on June 15. That scorched-earth approach may have simply been an opening gambit designed to make Mr. Pataki look like a moderate. But it was bound to incense supporters of rent laws. In response, however, Assembly Speaker Sheldon Silver has adopted an equally uncompromising stance. He demands a simple renewal of the status quo and has suggested a willingness to block some of the Governor's pet programs, such as real estate tax relief for upstate and the suburbs, if he does not get his way.

In announcing his own proposal, Mr. Pataki said his objective was to attain a balanced compromise. The landlords have been known all along to be ready to settle for "vacancy decontrol." Mr. Bruno, whose Republicans have received huge amounts of campaign funding from landlord groups, will now likely go along. Much depends on Mr. Silver's flexibility. The Speaker is legitimately concerned that Mr. Pataki's proposal will lead to a surge of landlord harassment of tenants, which happened when an earlier version of vacancy decontrol was approved in 1971, only to be rescinded a few years later. The Legislature can meet that problem by increasing criminal penalties for harassment, as Mr. Pataki proposes. Mr. Silver is also concerned that, under "luxury decontrol," tenants might be required to hand over sensitive financial information to their landlords. Here too there might be an alternative, with information filed to a city agency, where it can be kept secret.

In political terms, the Speaker appears to view Mr. Pataki's move toward compromise as a sign of weakness. The Democrats are even suggesting that they would be willing to let rent laws expire rather than accept a compromise not to their liking. Their political assumption is that, just as voters blamed the Republicans for shutting down the Federal Government in 1995, they will blame the Republicans for the end of rent laws.

Mr. Silver is playing a dangerous game that could harm both tenants and his own party. He should lead Democratic legislators to accept a phaseout of rent controls as the best and fairest alternative for New York City. Those landlords ready to improve the city's housing stock should be able to ask that tenants who can afford it pay rents determined by the markets, not by the luck or complex rules administered in an arbitrary fashion.

Copyright 1997 The New York Times Company