Bleak House: Summary of Findings


This report describes the findings of an investigation conducted
by the Assembly Housing and Oversight, Analysis and
Investigations Committees on the Division of Housing and
Community Renewal's (DHCR's) administration of New York's Rent
Stabilization and Rent Control Systems. Following the findings of
the report are a listing of seventeen specific recommendations
for how DHCR could improve its operations.

The committees found that three years after its takeover of New
York's rent regulation system, DHCR is an agency in chaos.
Telephones are often either not answered or constantly busy.
Large amounts of mail sent to DHCR are not acknowledged or
responded to. When tenants and owners receive answers from DHCR
the information provided is often incorrect. DHCR routinely loses
important evidence and documents sent in by tenants and owners
and, in some cases, entire case files.

Large numbers of tenants and owners have been denied the rights
guaranteed them by law simply because it is often impossible for
DHCR's constituents to communicate with the agency or for DHCR to
process cases without losing evidence and files. Many tenants and
owners find dealing with DHCR a Kafkaesque nightmare. Among the
reasons for the disarray of the system are the fact that DHCR has
moved its own offices fourteen times and administered the rent
administration program with little automation equipment.

The committees found that DHCR Commissioner William Eimicke and
other DHCR officials have been knowingly providing false
information to the Legislature and the public about the status of
the agency's case backlog. The false information was apparently
provided to present a misleading picture of DHCR's efficiency in
resolving its inherited workload.

The committees found that DHCR has been violating the provisions
of the Rent Stabilization Law and Code and its own due-process
procedures in its processing of the case backlog. Some violations
have occurred because of DHCR's rush to dispose of its workload.
Other violations have occurred simply because of the general
disarray of the agency.

The committees also found that DHCR has improperly dismissed or
given favorable treatment to rent overcharge cases involving
certain realty and management companies-which entered into
agreements with the State Attorney General's Office. These
improprieties apparently occurred because DHCR staff did not
understand the legal effect of the agreements such firms had
entered into.

DHCR rent examiners receive no training prior to assuming
important case processing duties. DHCR provides examiners with no
standard instructions on most policy issues they confront in
their work and the Committees found instances where DHCR
officials had made key policy decisions without consulting any
agency personnel with expertise in the subject area effected by
the decision. There is often mass confusion about which tasks
DHCR officials are assigned to perform.

In an attempt to correct the massive errors of DHCR's initial
case-processing system, tenants and owners with the resources to
do so have been appealing DHCR decisions and suing DHCR in court
in record numbers. Almost one third of initial DHCR decisions are
reversed or modified when they are appealed through DHCR's
administrative procedures and this figure may actually
underestimate the errors made by the agency. DHCR is also being
taken to court on rent regulation issues on the average of almost
three times daily.

DHCR officials and the Administration have made virtually no
efforts to change the structure of the laws DHCR is charged with
administering. Commissioner Eimicke says he has advocated a
policy of legislative non-involvement in rent regulation issues
because "there's no hope of success" in getting such legislation
enacted into law. DHCR officials and the Administration have
publicly maintained that the $60 million appropriated by the
legislature to fund DHCR has been adequate to meet DHCR's needs.
The agency has been hurt, however, by waiting almost two years to
adopt a basic code of regulations to run the system.

The committees found that the massive disarray of the rent
regulation system causes hardship for thousands of people every
year. In the worst cases, DHCR directly contributes to the
displacement and homelessness it is charged with preventing.

DHCR is at a crucial crossroads. The agency's response to the
charges raised in this report and that continue to pour in from
tenants and owners will, to a large extent, determine the future
viability of rent regulation in New York State.