TENANT BRIEFS
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
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