With a handful of landlords and 200 tenants watching in Police Plaza Auditorium on June 23, the city Rent Guidelines Board set the lease-renewal increases for rent-stabilized apartments at 2 percent for a one-year lease and 4 percent for two years, down from the current 5 and 7 percent. But before that happened, the RGB’s five Giuliani-appointed, right-wing, free-marketeering public members threatened to allow vacancy increases bigger than the 20 percent allowed in the new state rent laws.
Prior to the meeting, it was assumed that the new state vacancy allowance of 20 percent would completely substitute for the RGB’s vacancy allowance. But board members claimed that the law allowed them to let landlords charge even more for vacant apartments. After extensive and inconclusive argument, including telephone appeals to City Hall, the city Corporation Counsel, and Assembly Speaker Sheldon Silver’s Albany office, they voted not to allow higher vacancy rates.
Worried that the new law precluded landlords from charging extra for sublets, the board instead adopted a 5 percent "sublet allowance" that would be imposed if the 20 percent rate was found not to apply to sublet situations.
Unlike the last two years, when it was clear to experienced observers that City Hall was actively dictating the RGB’s rates, the five Giuliani-appointed members seemed to have no instructions on how they should vote. Uncharacteristically, long-term public member Agustin Rivera moved for no vacancy allowance, on the grounds that the state Legislature had set that rate.
--William Rowen
The July 11 demolition of a Lower East Side rooming house has left at least 30 people homeless--and numerous questions about the city’s plans for its site, which had long been marked for preservation as affordable low-income housing.
A city demolition team began pulling down the four-story, 28-unit city-owned building at 26 E. First St. after the Buildings Department declared it structurally unsound. A piece of the ceiling had collapsed into the first-floor stairwell during the July 9 thunderstorm. As in the February demolition of a nearby squat, police blocked tenants from retrieving their possessions. "They’re going to destroy our stuff," cried nine months pregnant Carmen Ayala, 22. City moving crews placed some tenants’ belongings in storage, but much of their furniture--and possibly several cats--was buried in the rubble.
The building had been slated for rehabilitation as an SRO by the Cooper Square Committee under a 1992 agreement with the city. However, rival neighborhood groups and the Giuliani administration have pushed for more market-rate housing in the area. In 1995, HPD withdrew $10.5 million Cooper Square was supposed to get to build mixed-income housing on a site one block south. City housing officials later said that site would instead be used for luxury housing, according to Cooper Square organizer Christian Valerio.
Valerio said that now, luxury developers across the street would benefit from the removal of the SRO. "It was an opportunity to get 28 poor families out," she said.
And what will be built on the lot where the SRO once stood? "I don’t know what the future plans are for the site," said Cassandra Vernon of the Department of Housing Preservation and Development.
--Steven Wishnia
George Pataki’s Division of Housing and Community Renewal has decided not to appeal a court decision nullifying the 3 percent Maximum Base Rent city-wide adjustment for 1996-97.
The DHCR will not challenge a unanimous March ruling by the Appellate Division of the 3rd Department, in which it reversed a lower court’s decision that the 3 percent increase limit affecting rent-controlled tenants was lawful. The state had the right to appeal the ruling, but attempts to determine why the Pataki Administration and DHCR declined to do so were not successful.
A tenant leader who is familiar with the case stated that, "Because Pataki is in favor of much higher rents for regulated tenants everywhere, as evidenced by his recent gutting of protections, the question for Pataki was not whether to appeal the MBR, but rather when to implement a much higher rate." Whatever rate is set will be retroactive to January 1996 for most rent-controlled tenants.
During processing of the case at the Appellate Division, DHCR argued that 3 percent could become 32.5 percent if the court were to agree with the landlords. The 3 percent will remain in effect until DHCR sets a new rate.
Now that the landlords have prevailed, the base rent of tenants who pay increases under the MBR system could rise precipitously. Under the 3 percent limit, a lot of controlled tenants whose collectible rents were at or near MBR as they entered the 1996-97 cycle were spared the full 7.5 percent annual increases.
A anonymous source within DHCR stated that the Pataki Administration was exploring how the agency might avoid a public hearing on a new MBR increase that might embarrass the Governor and further reveal how anti-tenant his policies are--just in time for the 1998 election.
--William Rowen
The state law appears to bar any vacancy increase other than the 20 percent, but Governor Pataki declined to explain why he thought the two could be imposed together. The 29 percent increase would apply to two-year leases starting on or before Sept. 30, before the new RGB guidelines, which do not include a separate vacancy allowance, go into effect. One-year leases would go up 27 percent.
The issue of adding the two rates became public when a state Division of Housing and Community Renewal internal memo describing how landlords could charge both increases was made public in early July. All the major New York City media picked up on the situation and played the story for what is was--a blatant willingness by Pataki’s DHCR to maximize rent increases for landlords.
Despite intense criticism from public officials and tenant leaders, the Governor stuck to the DHCR policy. Even before the internal memo became public, hotline advisors at the agency’s Gertz Plaza office in Queens were counseling tenants and landlords that the two rates could be added.
Tenant organizations and legal service attorneys are discussing court challenges to this and other changes in the law and DHCR policy.
--William Rowen