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.