Republicans Prepare Assault on Rent Laws

by Steven Wishnia

With New York State's rent laws due to expire in six months, Republicans in Albany are preparing to unleash an arsenal of proposals to weaken tenant protections.

"The people are not being benefited under the current law. We have to change it," says Bob Farley, counsel to the State Senate Housing Committee. He argues that eliminating rent regulations would actually bring lower rents and says "it would be irresponsible" for the state not to consider letting them expire.

Assembly Housing Committee chair Vito Lopez (D-Brooklyn) sees the impending battle as the "financial strength of landlord interests versus the political mobilization of tenants." "The more tenants are organized, the better it is," says Ben Powell, housing issues staffer for State Sen. Catherine Abate (D-Manhattan).

Rent regulations -- both rent control and rent stabilization -- affecting over a million New York City households expire June 15. To survive, they must be both renewed by the Legislature and signed by Governor George Pataki.

Despite Pataki's past opposition to rent regulations, some observers say the political consequences of completely eliminating them would be too much for him. "It's not politically possible," says Powell. "It would be too cruel, impractical." The specter of 82-year-old widows being tossed out in the snow when their rent gets jacked up from $250 to $1,100 might spook the governor's chances of getting re-elected in 1998.

But even if the Republicans in Albany accede to renewing rent laws, there are a host of changes they could push through to weaken them. These include vacancy decontrol, in which apartments become deregulated when the tenant moves out; decontrolling buildings with 20 or fewer apartments; lowering the threshold for high-rent decontrol from $2,000 a month to $1,200 or $1,500; eliminating rent controls on apartments occupied by tenants above a certain income; eliminating rent controls for all except the elderly; and requiring rent-striking tenants to deposit their rent with the courts.

Farley, counsel to the Senate committee chaired by Putnam County Republican Vincent Leibell, says repealing the laws completely wouldn't be a bad idea. Deregulation lowered prices in the airline industry, he says. If rent controls were eliminated, he contends, it would spark a building boom and the increased housing supply would bring lower rents.

How this would work in the real world is hard to understand. Land prices, mortgage rates, and construction costs -- the biggest expenses in building new housing -- wouldn't go down if rent regulations were eliminated. "How do you know they wouldn't?" Farley responds. And new housing in New York City is already exempt from rent controls unless the owner takes a tax break. He answers that developers are scared off by the possibility that their buildings might come under regulation someday.

Farley adds that he would "absolutely" endorse a means test for upper-middle-class and rich tenants. "We shouldn't have subsidized housing for millionaires," he says, adding that there are thousands of rich tenants paying artificially low rents. He disputes the most recent federal figures, a 1993 survey that found that of the more than 200,000 under-$400 rent-stabilized apartments in the city, only about 200 -- less than one-tenth of 1 percent -- were rented by people making over $100,000 a year. "I don't want to get into a statistical war with you," he says.

He also rejects as "pejorative" the idea that vacancy decontrol and the like constitute "weakening" tenant protections: "The purpose of our committee is to ensure affordable quality housing stock."

Assemblymember Vito Lopez says the loss of rent regulations would be "a catastrophe" -- and that pressuring the New York City Council to renew the local rent laws intact before they expire March 31 is a critical first step for tenants.

"If the City Council waters down rent protections, it will be very hard for us in Albany," says the Housing Committee chair. "If we go to Albany with rent regulation as it is, it's a powerful mandate. The Governor has no cover if the City Council renews rent controls."

In the political jockeying over the issue, the five Republican State Senators from New York City could tip the balance. One, Roy Goodman of Manhattan, considers preserving rent regulations intact "a priority," says staffer Rebecca Russell. The other four, Guy Velella of the Bronx, John Marchi of Staten Island, and Frank Padavan and Serphin Maltese of Queens, all come from conservative neighborhoods with fewer renters than the rest of the city and were all re-elected without Democratic opposition.

Another possibility, says Ben Powell, is that the Assembly will pass a "one-house bill" making major-capital-improvement rent increases temporary and strengthening anti-harassment laws, then use it as a negotiating tool. Rent regulations might also be part of the horsetrading likely when the Republicans try to cut welfare and fund building more prisons upstate, he says.

Unfortunately for tenants, the fate of rent regulations may come down to last-minute, closed-door negotiations among Governor Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver. Bruno's opposition to rent regulations is well known. Silver told the New York Times in November that he was willing to be flexible on the issue -- a word many tenants could interpret as code for "sellout." "I'm not knee-jerk on anything," the Speaker said.

Neither Bruno nor Silver returned phone calls.