Pataki Proposes Gradual End to Rent Control

New York Times, May 13, 1997

Gov. George Pataki Monday proposed eliminating rent protections on apartments once they become vacant, but the Democratic Speaker of the Assembly vowed to fight the plan.

The governor's proposal, which would eventually end the five-decade old system that limits rent increases on 1.1 million apartments, came a day after he disclosed that his full proposal would call for lifting controls immediately for a small number of wealthy tenants.

Taken as a whole, Pataki's proposal begins a new phase in the debate over the state's rent laws, which are set to expire on June 16. It appeared to establish the governor as the main bargainer in negotiations with the Assembly speaker, Sheldon Silver, who has called for continuing the laws unchanged, while shifting the spotlight away from the Republican Senate majority leader, Joseph Bruno, the leading proponent of abolishing the laws altogether.

It was far from clear whether the governor's plan would move either side toward a quick compromise.

Tenant advocates, including many Democrats in Albany, reiterated their strong opposition to any plan that would lift rent limits when current tenants leave, a process known as vacancy decontrol.

And landlords, who have fought for a quick end to controls, assailed Pataki's plan as too weak and expressed fear that he might be prepared to soften it even further in talks with Silver.

The plan Pataki released Monday would allow landlords to raise rents to market rates as soon as tenants move or die. Over time, vacancy decontrol would bring an end to the entire rent regulation system as more and more units became vacant. But just how long that process would take has been much debated, with tenants' groups saying it could happen in a handful of years and landlords maintaining it would take decades.

To temper his proposal, Pataki also called for continuing laws that allow blood relatives, in-laws and even domestic partners to inherit rent-protected apartments when tenants die or move away. Landlords contend that such succession rules have allowed families to keep rent-regulated units off the open market for generations and are sure to slow down deregulation significantly.

By releasing his plan over two days, Pataki seemed intent on focusing public attention on its least controversial element -- ending protections for wealthy tenants -- while playing down Monday more contentious, and far more sweeping, proposal for vacancy decontrol.

Repeatedly using the words "fair" and "balanced" to describe his plan, Pataki proudly suggested at a news conference Monday in Manhattan that he had found a way to split the difference between Republicans and Democrats.

"We must insure that every tenant who needs rent protections has those protections for as long as they live," the governor said. "This proposal will insure a smooth transition over the course of the next few decades to a market system."

Mayor Rudolph Giuliani, who has supported extending the rent laws, welcomed Pataki's entry into the debate, even though he disagrees with major portions of the governor's plan. The mayor also called on Silver, his ally on this issue, to begin negotiating with the governor, suggesting that Giuliani is prepared to accept a compromise that would end some rent protections.

"I've talked to the governor about it and he indicated to me that he's willing to be flexible," Giuliani said. "So, he's willing to move if other people will sit down with him and start negotiating with him."

But Silver and tenants' groups accused the governor of being a front man for landlords, who they say secretly consider vacancy decontrol their ultimate goal.

"This is not a compromise by any stretch of the imagination, but rather the governor has chosen to take the side of vacancy decontrol and the side of the landlords and abandon the middle class of this state," said Silver, a Manhattan Democrat.

Billy Easton, executive director of New York State Tenants and Neighbors Coalition, the state's largest tenants' advocacy group, said Pataki's political handlers had "artfully packaged an assault on tenants' rights to look as if they were providing new tenant protections." Vacancy decontrol, he added, "is the major prize landlords have wanted all along."

But groups representing landlords expressed disappointment with the governor's plan, contending that it would prolong for decades a system they consider rife with abuses.

"We're extremely disappointed that the governor wants to maintain rent regulations after 50 years of failure and economic devastation," said Jack Freund, executive vice president for the Rent Stabilization Association, a group representing 25,000 landlords. "We believe there needs to be a date certain to end rent regulations in New York, as Sen. Bruno has suggested."

Bruno, who has called for ending most rent protections in two to four years, praised Pataki for trying to broker a compromise. But he called the current succession laws "ludicrous" and said he would continue to push Pataki to agree to a specific deadline for the rent laws.

"Frankly, I just don't agree with his position that in decades you'll be out of rent control and rent regulations," said Bruno, of Rensselaer County. "If it's wrong, it's wrong. If you're going to correct it, you should do it in a timely way."

It is not clear, however, what Bruno can do to move Pataki off his position. Several of his fellow Republicans in the Senate oppose his plan for ending rent control, giving him the barest of majorities to pass a bill.

The governor's plan "takes the ball away from Sen. Bruno, who had a more extreme position," said Sen. Roy Goodman, R-Manhattan, who supports continuing the rent laws. "It's now up to Mr. Silver to come to the table and do some serious negotiating."

On Sunday, the governor called for for immediately lifting rent protections for tenants who earn more than $175,000 for two consecutive years, a policy known as luxury decontrol. Disabled tenants and people older than 62 would be exempt. The proposed change would extend luxury decontrol to about 10,000 additional households, Pataki's aides said.

Under current law, tenants who earn more than $250,000 a year for two consecutive years and who pay rent of $2,000 a month or more lose their rent protections. The governor would apply luxury decontrol to any tenants earning more than $175,000 a year, regardless of what rent they pay.

Pataki also called on Sunday for tougher civil and criminal penalties for landlords who harass tenants to make them vacate apartments. Tenants' groups say such harassment is sure to increase if vacancy decontrol is enacted.

And Monday, Pataki said he supported continuing the law requiring landlords to offer tenants lease renewals automatically. He also endorsed legislation that would require tenants to deposit rent in an escrow account during disputes with landlords, a policy long sought by apartment owners.

Copyright 1997 The New York Times Company