DHCR Adopts Anti-Tenant Code Changes
By Jenny Laurie and Kenny Schaeffer

In the face of bitter complaints and public protests about the process and the content from tenant groups and elected officials, the state Division of Housing & Community Renewal adopted a revised rent-stabilization code on December 20.

Initially proposed last summer after close cooperation between Gov. George Pataki’s administration and landlord groups, implementation of the code was delayed in the face of strong objections, and the changes were not released until after the November elections.

Administrative agencies like DHCR are required to adopt regulations to flesh out the details of the statutes they are charged with implementing and enforcing. However, they are not allowed to go beyond the law or adopt provisions that are inconsistent with the law. Many provisions in the new code appear to go beyond the agency’s authority, and will be subject to court challenges.

Gov. Pataki’s housing aides said that the intent of revising the code, which had not been updated since 1987, was to reflect changes (read “weakening”) of rent and eviction protections imposed by the state legislature in 1993 and 1997, as well as court decisions in the intervening years. But an examination of the code shows that the revisions are also an attempt to create numerous additional loopholes in the enforcement of the rent-stabilization laws.

The new code contains many provisions that will make it easier for landlords to raise tenants’ rents, overcharge new tenants, evict unwanted tenants, and reduce services in buildings they own. The most serious provision is a simple change in language that defines the “legal regulated rent” as “the rent charged” by the landlord, rather than the rent registered by the landlord with the DHCR, as provided in the previous code. This change will have a profound impact not only on disputes between tenants and landlords in Housing Court and in cases before the DHCR over rent overcharges, but on the overall rent levels in the city. It attempts to sidestep the entire concept that the rent “charged” is only “lawful” if it does not exceed the limits on rent increases set by law.

Met Council board member Seth Miller, a tenant lawyer with the firm of Collins, Dobkin and Miller, thinks this change is in complete violation of the law and would allow landlords a free hand in setting rents. He expects this code change to come up in cases that have already been heard in court and are now on appeal.

“We’re hoping that the courts will declare that the code revisions concerning registration are illegal,” he says. “I believe that it was not the city’s intention when it adopted the state laws in 1974 that landlords be allowed to set rents unilaterally. I also believe that the city has the power to do something about it.”

The new code changes make it much harder for tenants to get a rent reduction when they complain about a service reduction. They now have to allow the landlord 45 days to answer, and they are expected to file heat and hot water complaints with the city Department of Housing Preservation and Development first. It will also be harder for tenants to successfully challenge a landlord’s application for a rent restoration or an increase under the Major Capital Improvement rent-increase system. Tenants must now get an affidavit from an engineer or architect in order to prove that a landlord’s assertion about the adequacy of work done is not true.

The administration has added another new provision that makes harassment by tenants of landlords grounds for eviction. Even without this provision, landlords tried to “chill” tenants who assert their lawful rights by portraying themselves as victims of tenant “harassment.” This new and ill-defined provision will only encourage such retaliation.

According to Miller, these changes all have one thing in common: “The real intent of these provisions is to allow landlords to spend the tenant down to the ground. Tenants will be forced to go to court to fight overcharges, hire architects to challenge rent increases and to hire lawyers to defend themselves against baseless charges that they harassed the landlord.” Tenants who don’t have this kind of money will be forced to concede to higher rents or to give up apartments.

Other similar changes include: making it harder for tenants to defend themselves in primary residence cases, allowing tenants to withdraw complaints with the DHCR that will waive the rights of all future tenants; and limiting the amount the elderly or other low-income tenants can receive from roommates.

The Pataki administration claim that its intent in adopting the new code was merely to bring it into line with recent changes in the law is most clearly revealed as hollow and disingenuous with respect to high-rent and high-income deregulation. With regard to deregulation of vacant apartments reaching a rent of $2,000 a month, the code completely ignores the provision enacted by the City Council under Peter Vallone last spring in Local Law 13, requiring that the first incoming tenant following deregulation to be notified of his right to obtain a rent history and to file an overcharge complaint.

With respect to high-income deregulation—which is limited to households with annual incomes over $175,000 and rents over $2,000—the code pointedly ignores recent Court of Appeals decisions in cases where apartments were deregulated due to the tenant’s failure to document their income in time. The court has required DHCR to set up a procedure to reopen default determinations against families whose incomes are below the limit, but who simply did not respond on time to the confusing documentation demands, due for example to illness or temporary absence from the home.

The implementation of the new Pataki rent-stabilization code will no doubt result in years of court challenges, while hurting tenants without the resources to fight in court. With the governor giving every indication that he intends to seek a third term in November 2002, tenants will have an opportunity to express their reaction to this assault on tenants’ rights and affordable housing at the polls.