Small Owners Say Rent Talks Overlook Their Needs

New York Times, June 15, 1997
NEW YORK -- While the rent debate in Albany has focused on how to let prices rise, thousands of small landlords around the city are complaining loudly that such an approach leaves them out in the cold.

For these owners, the issues are completely different and are largely overlooked, since demand for their apartments is not high enough for them to raise rents, even if the law allows them to.

Their main concern is not rent limits, but the other broad powers of the state's laws -- guarantees for lease renewals, procedures for tenants to complain about harassment and to wage rent strikes -- that they say are unfair and expensive, strangling their businesses. These landlords say they lose a small fortune every year because of deadbeat tenants who who tie them up in costly housing court proceedings.

But tenant advocates have put tremendous pressure on Democratic lawmakers to preserve these tenant protections, asserting that they are the bedrock upon which rent protection rests. Many of these housing laws, along with the rent rules, will expire at midnight tonight if lawmakers fail to reach an agreement on extending or changing them.

And so in dozens of neighborhoods outside Manhattan, small landlords fear that changes being discussed will leave existing tenant protection laws untouched.

"It's a different world in Manhattan," said Elliot Nachimson, who owns 60 apartments in a building in the Pelham Park section of the Bronx. "You go to the outer boroughs, and there are many regulated apartments that are already at market rent or above it."

According to recent studies of rent levels, there are several neighborhoods outside Manhattan -- including Bay Ridge and East New York in Brooklyn, Kingsbridge Heights in the Bronx, and the South Shore of Staten Island -- where regulated rents are higher than market rents.

In many other neighborhoods the difference is negligible, suggesting that landlords would not be able to charge more than they do now if limits were lifted.

As an example, Nachimson said, a tenant recently moved out of one of his stabilized two-bedroom apartments with a rent of $999.89. Under state law, he could raise the rent to $1160 for the next tenant, and he advertised the apartment in several newspapers at that price.

"Do you know what I got?" he said. "A thousand dollars."

But he wants to get rid of the rent and housing regulations, because at their worst, he says, they allow unscrupulous tenants with a grasp of the law to virtually commandeer apartments and go months or years without paying the rent.

For smaller landlords, the stakes are even higher. Lisa Silversmith, who owns eight rent-stabilized apartments in a brownstone near City College in Harlem, said she fought a tenant for nine months in court to recover $11,000 in back rent. By the time it was over, her legal fees were nearly $4,000.

"That's not the kind of hit someone like me can take," she said. "It's a lot of money. It could put me out of the business."

Consequently, small landlords are watching with great interest one key Republican proposal that would force tenants in rent disputes to deposit back rent into an escrow account, so it could be recovered more easily if a landlord won the fight in court.

Mayor Rudolph Giuliani, who advocates preserving the rent laws, has singled out that proposal as the only change he supports.

Tenant advocates, while acknowledging some of the abuses of the system by renters, contend that even the laws currently on the books fall short of protecting tenants in a city with scarce housing.

And they worry that vacancy decontrol, even weak forms of it, will encourage landlords to harass tenants -- especially those who complain or take landlords to court -- into leaving apartments.

Michael McKee, a leader of the New York State Tenants and Neighbors Coalition, calls Gov. George Pataki's proposals to discourage harassment, which include criminal penalties, "window dressing."

"Really what they're acknowledging," he said, "is that there will be increased harassment under vacancy decontrol. I think these proposals will do nothing to stop it."

But small landlords say they merely want to be able to evict problem tenants more easily, and would like to make it more difficult for tenants to bring complaints against them. And, most important, they do not want to be forced by law, as they are now, to offer lease renewals to tenants who threaten their businesses or make their lives miserable.

"It's crazy that a system makes you let somebody like that live on your property," Nachimson said. "If things like that aren't changed up in Albany, then they've done nothing for us."