Upscale Areas' Tenants Would Be Hit Hardest, Studies Say

New York Times, May 7, 1997

ALBANY, N.Y. -- Offering the first clear glimpse of his strategy for resolving the bitter debate over state rent laws, Assembly Speaker Sheldon Silver strongly suggested Tuesday that he would support increasing government tax abatements and subsidies to landlords in exchange for preserving the rent rules, which the real estate industry has been pushing hard to abolish.

Silver, a Manhattan Democrat, also said he wants to link all talks on reducing homeowners' property taxes to the rent issue, raising the specter that he would block Republican tax-cut proposals if the rent laws were not preserved.

Though the Assembly Democrats have also called for cutting homeowners' real estate taxes, the issue is considered politically more important to Gov. George Pataki and to suburban and upstate Republican legislators, who have been the strongest advocates of ending rent protections.

The remarks by Silver represent the first wrinkle in what has until now been the Assembly Democrats' unconditional support for extending the rent laws unchanged. Those laws, which are scheduled to expire June 15, restrict rent increases on 1.1 million apartments.

Silver's comments also came on the heels of criticism against him from Republicans and even some Democrats that his intransigence in defense of rent laws has prevented a compromise.

Monday, former Mayor Edward I. Koch, a Democrat, blamed Silver for holding up the rent talks, and accused him of frightening tenants by refusing to budge. But aides to the speaker insisted that he did not speak out Tuesday in response to attacks.

In his comments, Silver said he understood the need to help landlords.

"Most of the builders and developers in the city of New York and throughout the state are willing to accept regulated rents in exchange for low-interest loans or some kind of real property tax reductions on their developments," Silver said after a speech on the rent issue Tuesday.

"There is nothing inappropriate in having an overall housing discussion," Silver said in explaining why he wanted to link talks on property tax cuts, tax rebates for builders and the rent regulations.

Pataki, who has called for gradually ending many rent protections but has been vague about how he would do that, declined to comment Tuesday about Silver's proposals.

But Republican Senate majority leader Joseph Bruno, the Legislature's leading proponent of abolishing the rent laws, sharply attacked Silver's efforts to link cutting property taxes with preserving the rent laws.

"The speaker's continued intransigence on negotiating a reasonable transition out of rent regulations increases the likelihood that state laws will expire on June 15," Bruno said in a prepared statement. "Rather than holding hostage property tax relief for continued rent regulations, the speaker should be talking about a responsible compromise."

Joseph Strasburg, president of the Rent Stabilization Association, a landlords' group, rejected Silver's call for extending current rent laws in exchange for expanding tax abatements and subsidy programs for developers. Though his group would support expanding those programs, he said they still would want to end most rent protections.

"The problem with Albany is that most issues get resolved by linking to other issues," Strasburg said. "This is an issue that should stand on its own merits."

Strasburg said he thinks Silver was issuing veiled threats about holding property tax cuts hostage to pressure Pataki to push his fellow Republican, Bruno, to a softer position on the rent laws. Bruno has called for ending rent protections for most people in two years, though he would accept a longer period. Pataki has made property tax cuts a top priority.

"He knows that in order to limit changes in the system, the only ability the Assembly has is to trade off on other things that are important to the governor and Senator Bruno: property tax cuts," Strasburg said.

Silver's strategy carries some significant political risks. Cutting property taxes for homeowners is an enormously popular program among Democrats as well as Republicans outside New York City.

Linking the rent laws to negotiations on the budget is also likely to encourage Republicans to block Democratic programs to pressure them to accept major changes to the rent laws. Assembly Democrats have proposed softening the impact of the new federal welfare law. The Republicans may reject those measures unless Silver agrees to rent-law concessions.

Silver said he was prepared to discuss expanding several housing programs as part of the negotiations on rent, including tax abatements and direct subsidies for developers who build new units for low and middle-income people, as well as loans or grants to groups that rehabilitate low-income housing.

The Assembly has already passed legislation calling for increased spending on many of those programs.

Copyright 1997 The New York Times Company