Posted by Anna on February 25, 2000 at 09:50:51:
February 25, 2000
RESIDENTIAL REAL ESTATE
Tenant-Leaning City Council
Prepares to Continue Rent Rules
By DENNIS HEVESI
ith little echo of the protracted, headline-stirring
bombast of the 1997 rent-regulation struggle in
Albany, the New York City Council is to hold its first
public hearing this morning on legislation required to
extend rent control and rent stabilization for 1.1 million
city apartments for three more years.
Given the powerful voting bloc represented by that
measure of housing stock, all groups concerned,
including the city's leading landlord group, have
predicted that the Council will pass the extension by its
March 31 deadline, along with one change that would
protect the rights of tenants moving into deregulated
apartments.
Placed on the back burner, however, were several
proposals to strengthen rent protections. Those
proposals came as a new housing survey indicated
that the city's vacancy rate dropped to 3.19 percent
from 4.01 percent over the last three years -- with 5
percent the statutory level required for declaring a
housing emergency and extending rent regulation.
Calling the legislation time-sensitive, Councilman
Steven DiBrienza, a Democrat from Brooklyn, said,
"You extend the baseline system with the protections
as they are and then, in the long range, you fight for
the other improvements."
In 1969, the City Council created rent stabilization,
intended as a less restrictive system than rent control,
which now applies to buildings of three or more units
built before Feb. 1, 1947, and occupied by the same
tenant since July 1, 1971. Rent stabilization applies to
buildings of six or more units built before Jan. 1, 1974.
Under rent control, rents are set through a complex
formula administered by the State Division of Housing
and Community Renewal. For years, increases have
consistently been 7.5 percent a year, with a $15 a
month surcharge for those apartments with rents under
$500. Under stabilization, rent increases for one- and
two-year leases are set by the Rent Guidelines Board,
appointed by the mayor. In recent years, the increases
have been roughly 2 to 3 percent.
Today's hearing at City Hall, and another scheduled for
March 6, will be held amid lingering bitterness over
past Council votes that tenant advocates have argued
severely weakened the system.
"Oh, yes! Oh, yes!" said Michael McKee, associate
director of one tenant organization, New York State
Tenants and Neighbors, when asked whether his
members would be turning out in force for today's
hearing. "We've been phone-banking just to get people
there."
In 1994, the Council passed a law that allows
apartments to be decontrolled when the rent reaches
$2,000 a month. Laws that allow a landlord to renovate
a vacant apartment and then add one-fortieth of the
renovation cost to the apartment's monthly rent, when
combined with a statutory vacancy increase of at least
18 percent enacted by the Legislature in 1997, are now
readily pushing rents beyond that $2,000 level.
"What we're seeing now," Mr. McKee said, "is that for
apartments that were renting for $800 before a
vacancy, it's very easy for a landlord to get over $2,000
a month" -- and see it decontrolled.
Jack Freund, executive vice president of the Rent
Stabilization Association, the city's largest landlord
group, protested the direction the Council appeared to
be taking.
"There's no question that the City Council will extend
the rent laws because of a housing shortage," he said.
"But it would be irrational for them to do so without also
taking steps to create additional housing. The R.S.A. is
proposing that the Council focus instead on a broad
new middle-income housing initiative, primarily for the
boroughs outside Manhattan, that will create sorely
needed housing and eventually end the housing
shortage. We are a little sorrowful that the City Council
can only muster a knee-jerk reaction."
No statistics were available on how many apartments
had been deregulated specifically because of the
vacancy decontrol law. But the 1999 Housing and
Vacancy Survey, compiled by the federal Census
Bureau for the city's Department of Housing
Preservation and Development, showed that there
were 1,122,872 rent-regulated apartments in the city in
1996, and by last year that figure had dropped to
1,098,939, a 2.1 decrease. Breaking out rent-controlled
apartments from those overall totals, the survey
showed that there were 70,572 rent-controlled
apartments in the city in 1996 and 52,562 in 1999, a
25.5 percent drop.
As part of his proposed extension package, the City
Council Speaker, Peter F. Vallone, has included a
measure that would require landlords to give a detailed
explanation of how they achieved the $2,000 rent level
required to decontrol an apartment.
Of Mr. McKee's concerns, Mr. Vallone said: "Mike
McKee needs an issue, so he'll find one if there's not
one there. Suffice it to say we sharply disagree."
Mr. DiBrienza, conceding that his legislation would not
come up for consideration by the March 31 extension
deadline, said he was proposing that rent-controlled
apartments no longer be administered by the state, but
by the Rent Guidelines Board, which sets stabilized
rents.
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