A Molehill of Rent Reform
EditorialGov. George Pataki and legislative leaders have reached an agreement on rent regulation that does nothing to dismantle the cumbersome bureaucracy that has crippled the housing market in New York State since World War II. But the agreement does at least make some good changes in the existing rules. That is fortunate, since the State Legislature is unlikely to have the stomach for another rent regulation fight for a very long time.
New York Times, June 17, 1997
Despite Governor Pataki's attempt to portray the final deal as a compromise, the package is really a victory for the tenants and the Assembly Speaker, Sheldon Silver. Like a particularly canny game bird, Mr. Silver knows how to stay perfectly still for a long time until his enemy gets tired and goes away. By saying and doing nothing, the Democratic leader brought the Republicans around to a deal not very far from the one he had hoped for all along.
The bill does include reforms that should make life a little easier for landlords, especially those with small apartment buildings. Housing Court judges will now have to require tenants engaged in rent strikes to pay their rent into an escrow account, so it will be available if the court rules against them. The smallest landlords will be able to collect the part of their rents that is not in dispute while a case drags itself through the process. Tenants with bargain-basement rents will no longer be able to turn their leases over to children, grandchildren and great-grandchildren endlessly. "Inheritance" rights will be limited to a single generation.
Mr. Pataki's proposal for a vacancy decontrol system that would free units from regulation as their present tenants leave was unfortunately rejected by the Democrats. The Governor, who came under so much fire that he was refusing to even utter the words "vacancy decontrol," settled for a hike in the amount landlords may raise rents when a unit becomes vacant. Mr. Pataki now claims that under this new system three-quarters of all regulated apartments will reach market rate the first time they are vacated. That seems unlikely.
Still, the new program is an improvement, particularly since it makes special provisions for apartments held by one tenant for a long time or renting at rates so low that normal increases make little impact.
The agreement avoids symbolic gestures that create a good impression while making the situation worse. The "luxury decontrol" provision eliminates rent protections for people making $175,000 a year -- but only if their apartments rent for $2,000 or more. That is because weeding out the handful of very wealthy tenants throughout the system would have generated a flood of additional paperwork in a bureaucracy that has yet to clear landlord-tenant disputes going back 10 years. The one thing the state's private housing does not need is more rules, procedures and landlord-tenant fights.
The final package is so modest and sensible that one must wonder why in the world it was necessary to shut the government down for months and terrify tens of thousands of New York tenants. A less dysfunctional state legislature would have passed many of these reforms by unanimous agreement during the normal course of business.