In Rent War, Tenant Fears Drive Strategies in Albany

By JAMES DAO
New York Times, April 6, 1997

ALBANY, N.Y. -- Thousands of frightened and angry tenants are expected to swell the marbled corridors of the State Capitol in the coming week, demanding a stay of execution for the law that limits rent increases on one million apartments in New York City and its suburbs.

Few issues in recent decades have generated such fear and loathing toward state government, since few issues so directly touch so many people, most of whom live in New York City.

A change or a lapse in the regulations -- which are scheduled to expire after June 15 -- could cause rents to rise for thousands, perhaps millions, of tenants, undoubtedly straining the ability of many to stay in their homes.

With Albany's leaders vehemently at odds over whether to extend, revise or abolish the law, there have been no negotiations, no offers of compromise -- just threats from Republicans to let the law expire and demands from Democrats to keep it unchanged.

Some economists say that the rules hold down the housing supply, but others contend that they keep neighborhoods stable. A middle ground seems unreachable. And tenants' anxieties are growing.

But in that anxiety lies the key to understanding the political strategies driving the rent war. Combatants on all sides are out to harness people's fears, trying to put the mounting panic to their best political use. Which raises the all-important question: who will use it most effectively, and who will be burned trying?

Leading the charge for the law's opponents has been state Senate Republican majority leader Joseph Bruno, an ardent advocate of deregulation who has called for ending all rent protections over the next two years. With characteristic hyperbole, he has described rent regulations as more destructive to New York City than an atom bomb explosion and has predicted that lifting rent restrictions will spur developers to build new apartments and rehabilitate old ones by the thousands.

Bruno and other Senate Republicans received more than $200,000 in campaign contributions from groups representing landlords last year, though he says those donations did not influence his stance against rent restrictions.

Bruno, a Republican of Rensselaer County, has threatened to let the existing rent law expire after June 15 if his demands for its abolition two years from now are not met -- something he can singlehandedly do by blocking any bill in the Senate that would extend the rules.

If Bruno succeeds, the rent protections that now benefit more than 2 million New Yorkers would expire after June 15. That does not mean rents would immediately go up, but once leases expire, landlords could begin the process of raising rents to market levels.

Though Bruno has said repeatedly that he did not want to frighten anyone, it is patently clear that fear is at the core of his strategy. He is, after all, counting on Democrats -- who are the law's staunchest defenders -- to come limping to the bargaining table out of pure dread that the rules will lapse.

There, he hopes, they will accept this bargain: that weakened protections are better than no protections.

Bruno underlines this strategy almost every time he speaks on the issue by reiterating his intention to let the law die after June 15. The Democratic-controlled Assembly has already passed legislation to extend rent controls, but of course it takes both houses to pass a law (as well as the governor's signature).

On Monday, Democrats in the Republican-controlled Senate say they will move to bring a bill extending the rent law to the Senate floor; Bruno has said he will block it, which would reinforce his threat to let the law expire in June, unless Democrats bow to his will.

Asked in a recent interview what would happen if the Democrats failed to take his threat seriously, he replied, "If they are stupid enough to do that, they will make the biggest mistake that they have made this year."

He added that the Democrats "have tested me a number of times," and lost.

Not that Assembly Democrats are without considerable power. They can -- and clearly will, if necessary -- hold up the budget and every piece of legislation pending in Albany this session if Bruno refuses to consider a compromise on rent protections.

The Democrats also believe that tenants' fears will work to their political advantage -- not by moving Bruno, whose power base is upstate and who has little to lose by alienating New York City tenants, but by pressuring Gov. George Pataki to rein in the majority leader, his fellow Republican.

Pataki, the Democrats reason, wants to expand his very small base of support in New York City in preparation for his 1998 re-election campaign. Gutting or abolishing the rent law will cause a huge backlash against the governor, and his political handlers will simply not accept that, the Democrats contend. And the Democrats have made it clear that they will do their best to focus blame on The governor.

Pataki won office in 1994 with scant support from New York City voters, and might again. But that is always a risk, especially since the large turnout upstate in the last election was unusual and Pataki, who won the vast majority of upstate votes, probably cannot count on either the large turnout or such overwhelming support again. And he is said to harbor higher political aspirations; unpopularity in New York City would presumably not help his future.

"If the laws expire, it will be the governor's inaction that brings that out," said Assembly Speaker Sheldon Silver of Manhattan, the Legislature's most powerful Democrat, in a recent interview.

Of the three leaders, Pataki is, in many ways, in the most awkward spot. He is under growing pressure from New York City Mayor Rudolph Giuliani, who has been speaking out more forcefully on the matter, to preserve the law. Even Pataki's political patron, U.S. Sen. Alfonse D'Amato -- who is also up for re-election next year -- has criticized Bruno for stoking the public's fears.

But that fear could work to the governor's benefit, as well. Pataki has tried to cast himself as a mediator, the lone moderate capable of finding a middle ground -- even though his long-term support for ending rent controls on vacant apartments puts him much closer to Bruno's end of the spectrum than Silver's.

Under Pataki's script, public panic will make it easier for him to push for a compromise -- and, in the end, appear the savior for millions of tenants. "He's saying, 'When it's time for the cavalry, I'll come riding in,' " said Maurice Carroll, director of the Quinnipiac College Polling Institute in Hamden, Conn. "He'll be John Wayne."

But the political risks are also much greater for Pataki. Voters almost always blame governors more than legislators for Albany's failures -- so he is more likely to be the target of tenants' wrath if the rent law lapses or is severely weakened.

The governor's aides say he is fully aware of the Democrats' strategy to hold him accountable for changes to the law. But they say Pataki will not be pressured into simply extending the rules because he believes they should be gradually phased out -- though he has refused to say exactly how.

As if to send a message to the Democrats that he will not blink first as the June 15 deadline approaches, Pataki said recently, "I hope it doesn't take something like the expiration of laws to force serious negotiations. But if it does, it does."

With all sides locked into a game of chicken, there have been no negotiations, nor even talk about holding negotiations. Bruno and Silver have not budged from their positions and Pataki has been keeping mum on his, trying leave himself wiggle room for a final compromise.

But what that compromise might be is anyone's guess. Several possibilities float on the horizon. One option is to expand the policy known as luxury decontrol, where controls are ended for more expensive apartments rented by wealthier people.

Another is moving toward the type of system now used in Los Angeles, where restrictions on rent increases apply to occupied apartments, but rents are allowed to jump to market rate whenever units are vacated.

These are things no one is willing to discuss because no one wants to be perceived as caving in to the other side. The battle lines are drawn, the combatants frozen in place, waiting for someone else to move first. And tenants sit on the sidelines, biting their nails.

"This is all designed to make tenants and their supporters panic and give in and swallow some poison-pill amendment," said Michael McKee, director of the rent-regulation campaign for the New York State Tenants and Neighbors Coalition. "And we are prepared to fight right through the summer if we have to."

Copyright 1997 The New York Times Company