Rent Laws Saved – Mostly

by Peter Duffy
The Resident, June 20, 1997
Last Minute Rent Compromise is Sigh of Relief for City Tenants, But Worries About Specifics of Legislation Remain

For the record, Sal Albanese predicted it.

"I think Pataki backs off," the mayoral candidate said two hours before rent regulations were scheduled to expire at midnight, June 15. "I was watching [cable news channel] New York 1 and you could see in his body language that he was going to give in."

Albanese was standing with hundreds of tenants in front of Pataki’s Third Avenue office, participating in a candlelight vigil in the hours leading up to the laws’ demise. As it happened, the laws did die, but 15 minutes past the deadline an announcement came from Albany that a deal had been struck. "We have a conceptual agreement," said Assembly Speaker Sheldon Silver at a press conference, in his characteristic low grumble.

East Side State Sen. Roy Goodman’s prediction was a little off. He had said an agreement would be reached between 11:30 p.m. and midnight. He wasn’t too worried about his miss the following day.

"I am extremely pleased," said Goodman. "This was a team effort which involved an aroused constituency and a group of capable tenant leaders and basically myself — the anchorman within the Republican majority trying to hold back the tides."

"It’s a great big sigh of relief," said Upper East Side Assemblyman Pete Grannis, a Democrat, echoing the thoughts of tenants throughout the city. "Everybody came to their senses last night and realized we just can’t go over the edge."

Tenants had been on the edge for months, ever since Senate Majority Leader Joseph L. Bruno made his December 1996 declaration that he would end rent law "as we know it." He said that rent laws had a devastating effect on the health of the city’s economy, but others pointed to the sizable contributions he received from the real estate industry as the motivation behind his position. Bruno repeatedly vowed not to give in, preferring to let the laws die rather than to capitulate to the Democrats.

But the result was not quite what he had planned. Even Gov. George Pataki’s more moderate vacancy decontrol plan — which was the subject of an all-out media advertising blitz in the weeks leading up to the laws’ expiration — didn’t fly. In the end, the compromise was closer to Silver’s original plan, which was to keep the laws as they were.

The agreement gives landlords the option to impose a 20-percent rent increase on a vacant apartment if the tenant lived there for at least eight years (the expired law allowed 14- to 16-percent increases). The landlords would then get an extra six-tenths of a percent increase each year.

The luxury decontrol limit was set at $175,000, down from the current $250,000. The new income limits only apply to apartments renting for at least $2,000.

In addition, tenants will be required to put rent in escrow accounts during landlord disputes, and landlords will be subject to new penalties for harassment.

And building owners who want to demolish a building with three or fewer occupants are able to demolish as long as they relocate the tenants. (The expired law made it very difficult to remove holdout tenants.)

The laws expire in six years.

On Tuesday, bill drafters were busy writing the legislation, and legislators had not yet had a chance to vote on the measure, which is expected to easily pass both houses and be signed by Pataki.

Dawn Sullivan of the East Side Tenants Coalition was worried about a number of provisions of the legislation, including the mandatory rent deposits, the luxury decontrol measure, and the elimination of barriers to a building’s demolition.

"The kinds of things [landords] are getting is almost overwhelming," said Sullivan. "The whole thing was done so badly."

Sullivan, one of scores of tenant leaders who spent nearly every waking hour fighting for the preservation of the laws, was dismayed by the last minute nature of the compromise and called for a "blue-ribbon" panel to study the issue.

The Upper East Side is second only to the Upper West Side for the most rent regulated units in the city of New York.

Councilman Andrew Eristoff worried about the impact of lowering the luxury decontrol ceiling to $175,000 and placing the rent limit at $2,000 a month. At least half of the apartments effected by the new luxury decontrol limit, according to some estimates, are located on the Upper East Side.

"I view the settlement as a modest victory for tenants," Eristoff said. "The system remains largely intact and the vast majority of tenants will be unaffected by changes in the law."

Goodman said that the compromise "is not a perfect bill," but stressed that "its fundamental thrust is to guarantee absolute peace of mind for every tenant for six years."

Goodman, a Republican, played an important role in the fight as one of only two Republicans in the GOP-controlled Senate who favored the Silver plan. But he and East Side Assemblyman John Ravitz, also a Republican, had been criticized by some tenant groups and legislators – like Grannis — for not working hard enough to convince his upstate colleagues of the importance of the laws. On Monday, Goodman noted that he had succeeded "despite the naysayers."

Ravitz said that, despite "those elected officials who said we were impotent," his and Goodman’s efforts to communicate to the Republican "did get through."

"It’s very unfortunate that we had to put people through this six-month roller coaster ride," he said. "Bottom line: I think hopefully a lot of fears are going to be alleviated [by this compromise]."

The process came down to three men in a room hammering out an agreement. In the back of Pataki’s mind, undoubtedly, was his re-election campaign next year and the prospect of 2.5 million angry tenants within the city.

At just past midnight, he abandoned his oft-repeated demand for the implementation of his vacancy decontrol plan.

The Republicans tried to kill the laws, but the political forces of the city wouldn’t let it happen.

"I am pleased that a compromise was worked out," Councilman Gifford Miller said. "I am extremely disappointed that we had to go through so much trouble and anxiety because of the radical agenda of the govenor and the state Senate. But I guess it goes to show the influence of ordinary people is sometimes as great as it should be."