RGB Study Finds Landlord’s Profits at 10-Year High
by Jenny Laurie

Landlords will get 0% increases this year if the Rent Guidelines Board follows its own research. A study measuring landlords’ income showed their earnings were up 11.4% from 1996 to ‘97, the highest they have been in years. Landlords are paying the lowest interest rates on borrowed money in 17 years, according to the 1999 Mortgage Survey. And, no surprise to tenants, rent increases were the highest they have been in years as well.

The research shows that landlords’ costs have stayed flat or gone down (fuel went down by 6.2%) and that they are earning more money than they have in the last 10 years. More research, to be released later this month, is expected to confirm these figures: Operating costs have gone down, interest rates have gone down, rent collections have gone up, rents have gone up, vacancies have gone down, and landlords are making a bundle.

At the RGB’s first meeting of the year on April 13, board chair Ed Hochman announced that Mayor Rudolph Giuliani had dismissed Ken Rosenfeld as tenant representative and replaced him with Jeffrey Coleman. Rosenfeld, a tenant attorney at Northern Manhattan Improvement Corporation, was appointed by then-Mayor David Dinkins six years ago, and had been serving after his term expired. Originally appointed with Leslie Holmes, a Legal Aid attorney who died tragically two years ago, he had continued to serve tenants with passion and broad intelligence. To many of us watching the RGB over many years, Ken and Leslie formed our favorite team: They understood the numbers and the politics, and were compelling and passionate in their advocacy.

With the firing of Ken Rosenfeld, tenants lose a fiery advocate with years of experience representing low-income tenants in housing court.

Rosenfeld’s replacement is Jeffrey Coleman, an attorney at the Wall Street firm of Hughes Hubbard and Reed, to serve with David Pagan (appointed after Leslie Holmes’ death, he is the director of Los Sures, a housing organization in Williamsburg). While Coleman has no formal experience with tenant issues (except that he is a rent-stabilized tenant), it is now obvious to all watching that he has read and absorbed a tremendous amount of the background material and understands issues important to tenants. He was so confident, having recently read and memorized board transcripts, that he was able to quote back to other board members their statements from 1998. He clearly comprehends that the landlord members, Harold Lubell and Vincent Castellano—especially Castellano—are exaggerating blowhards.

“I’m a litigator,” Coleman explains, and made it clear that he will be aggressive and smart in his advocacy for the tenant position. The public members are the same as last year: Agustin Rivera, who was appointed by Edward Koch, and Giuliani’s three 1998 appointments, Bartholomew Carmody, Edward Weinstein and Justin Macedonia.

The big push this year for Met Council and other organizations will be the elimination of the “poor tax.” This is the additional increase, or surcharge, on apartments renting for under $500. This increase has had a devastating impact on apartments occupied by very low-income people (and those available for low-income people in poor neighborhoods). The surcharge on low-rent apartments, imposed during the Koch administration, eliminated during the Dinkins administration and reinstated under Giuliani (proving that landlords are making a profitable investment when they spend their money lobbying City Hall), has almost eliminated rent-stabilized apartments renting for under $500 a month, even as poverty remains epidemic and the city’s waiting list for public housing is now 10 years long. Between 1981 and 1993, the total number of apartments renting for under $450 a month (in constant 1993 dollars) declined by over 400,000, and between 1993 and 1996, the percentage of apartments renting below $400 declined from 23% of the total stock to just 13%.

While several RGB members have said that they are concerned about the damage done to landlords by low-rent tenants, they have shown little concern for the over 250,000 rent-stabilized families who pay more than half their income for rent. The poor tax adds to this burden, forcing poor families to take money away from food, clothing, and medical care. The RGB has also taken little notice of the windfall going to landlords from the state’s statutory vacancy allowance of 20%, which ensures that vacant apartments can be rented for very high rents even in extremely poor neighborhoods. In the wealthy neighborhoods of the city, landlords are getting deregulated rents over $2,000 a month for newly rented apartments.

Tenants interested in being heard on the issue should write the Mayor and plan to testify before the board in June.