Governor Offers Compromise on Rent Decontrol

New York Times, May 12, 1997

ALBANY, N.Y. -- In his first attempt to broker a compromise on rent regulations, Gov. George Pataki Sunday proposed lifting protections for a small number of wealthy tenants immediately and appeared to lay the groundwork for a broader plan to remove controls from apartments as they become vacant.

The proposals set a middle ground between Republicans in the state Senate who want to abolish the current rent regulations and Democrats in the Assembly who want to preserve them. While initial reactions to the governor's plan were lukewarm, his decision to shift the debate toward a centrist position that keeps some protections intact and eliminates others that favor wealthier New Yorkers offers legislators on each side a way to appease some of their constituents. The regulations expire at 12:01 a.m. June 16 if state lawmakers do not reach an agreement to extend them.

The governor's proposal Sunday is part of a more detailed plan that is expected to call for scaling back the current rent regulations that restrict rent increases on 1.1 million apartments, most of which are in New York City and its suburbs. Pataki said he would release the full plan on Monday, and his aides would not elaborate beyond his one-page statement released this afternoon.

But in that statement, the governor indicated that he supported continuing most rent protections. In the most telling sentence of his statement, the governor broadly hinted at vacancy decontrol, without using those words: "My plan to save rent control will ensure that every middle-class tenant has the right to remain in their apartment for the rest of their lives if they choose, protecting rent laws for about 99 percent of New York tenants."

He released his statement a few hours after John Cardinal O'Connor, the Roman Catholic archbishop of New York, called for current laws to be extended until a new panel could consider ways to maintain affordable housing in the city.

In the governor's sneak preview Sunday, Pataki proposed expanding a policy known as luxury decontrol, which would lift protections for wealthy tenants. Currently, tenants who earn $250,000 or more for two consecutive years and who live in apartments with monthly rates of $2,000 or more lose their protection. But the governor's plan would lower the income threshold to $175,000 a year, regardless of how much a tenant pays for rent.

He said his plan would protect nearly all the 2.7 million tenants living in rent-regulated apartments. "Only the top 1 percent of all tenants in rent-regulated apartments, those individuals making more than $175,000 annually who can afford to pay market rates, will be asked to do so," he said.

In outlining a framework under which the administration would possibly embrace vacancy decontrol, a policy of lifting rent regulations when a tenant moves out, the governor also included penalties for landlords who try to harass tenants into vacating their apartments. In this proposal, Pataki seemed to be acknowledging that allowing vacancy decontrol could result in many forced evictions, a fear often cited by tenant advocacy groups.

Pataki has supported vacancy decontrol in the past but has been silent on the issue in recent months.

Among the questions the governor left unanswered is how he might phase in vacancy decontrol or whether he will maintain provisions like the so-called succession rule, which allows relatives of occupants to inherit rent-regulated apartments.

Pataki's decision to step into the rent debate comes just two weeks after the state's Democratic Party began an advertisement campaign that accused both Pataki and his mentor, Sen. Alfonse D'Amato, of shunning the battle over deregulation. In fact, the state's Republican senator predicted in response to the ads that any resolution would maintain protections for middle and low-income residents.

Pataki's plan drew immediate criticism from tenant advocates and Democrats in the Assembly, who said that it would recklessly erode protection for tenants. "The numbers released today in the Governor's nine-paragraph statement are simply unrealistic in today's economy," Sheldon Silver, the speaker of the assembly, said in a written statement. The Assembly Democrats, particularly those from New York City, have found themselves in a difficult position and with little room to maneuver on rent regulations, because so many of their constituents have these protections.

Billy Easton, a lobbyist for the New York State Tenants and Neighbors Coalition, attacked Pataki's call for expanding luxury decontrol, saying it was just another step toward the landlords' goal of deregulating all apartments. In noting that the Legislature had established the $250,000 income ceiling just four years ago, Easton expressed concern that this additional lowering would further weaken high-end protections.

Easton also said there was an obvious reason that the governor mentioned penalizing landlords who try to harass tenants into leaving: He intends to support the policy of vacancy decontrol.

Easton said he believed that the reason these laws are necessary he believes the governor intended to propose some form of vacancy decontrol which would encourage landlord harassment. "The governor has absolutely no reason to propose anti-harassment laws," Easton said, unless he also plans a proposal that would encourage harassment. "And that proposal would be some form of vacancy decontrol. I would love to be proven wrong on this tomorrow."

On the other hand, landlords, who have the most to gain if the rent-regulation system is dismantled, said Pataki's plan did not go far enough. They pointed out that his statement suggested that most people living in rent-regulated apartments would continue to be protected so long as they remained in those apartments.

"I was a little disappointed that he seemed to be implying that there was no end in sight for rent regulations," said Dan Margulies, the executive director for the Community Housing Improvement Program, a landlord group. "According to that statement, he is looking for lifetime rent laws."

One of the key questions left unresolved today was whether Joseph Bruno, the Republican and Senate majority leader who has been the main proponent of abolishing the current regulations, would move to a more moderate position now that the governor has taken a more specific stand. Bruno has called for phasing out rent regulations during the next few years for all tenants except the elderly, the poor and the disabled.

The position Pataki takes could seriously undercut Bruno, though many Democrats believe that the senator is merely the governor's stalking horse, taking an extreme position that will enable the governor to play the moderate between the extremes by eliminating some rent protections and and taking credit for saving all the rest.

Bruno also issued a statement late Sunday afternoon, commending the governor for proposing further luxury decontrol. But he did not back away from his demands for an eventual abolition of the current regulations.

"The time is now to make changes that have long been overdue," he said. "We must have a gradual and reasonable transition away from rent regulations to an open, competitive housing market in New York City."

Copyright 1997 The New York Times Company