Judge Blocks RGB Guidelines Court Condemns Refusal to Release Rent-Increase Study
by Steven WishniaState Supreme Court Judge Louis York has temporarily barred the Rent Guidelines Board’s 1998-99 rent-increase guidelines from going into effect, on the grounds that board chair Edward Hochman unfairly suppressed a report on how much rents have gone up under the 1997 rent law.
In a ruling handed down July 1, Judge York upheld a suit by tenant representatives Kenneth Rosenfeld and David Pagan. The two claimed that the RGB members would not be informed enough to vote on the guidelines unless they had access to the “Recent Movers Report,” an April survey of 2,200 tenants who had rented apartments after the 20% vacancy surcharge allowed by the 1997 law went into effect.
The decision suspends the RGB’s June 22 vote on the 1998-99 guidelines, which affect about 1 million rent-stabilized apartments. The board voted 5-3 to allow lease-renewal increases of 2% for one year and 4% for two years for rent-stabilized apartments, and extended the $15-a-month “poor tax” to apartments renting for less than $450 a month. The expanded poor tax — for the last four years, it only covered apartments renting for $400 or less — will affect about 75,000 tenants, according to tenant representative Kenneth Rosenfeld.
Hochman claimed that the report was incomplete and based on outdated data. Tenant supporters suspect he suppressed it to hide how much rents have risen under the new law. “Giuliani doesn’t want this information to get out,” notes Met Council’s Gloria Sukenick. “He wants to protect Pataki.” In the ruling, Judge York criticized Hochman for “cynical maneuvering” and said the study was “precisely the kind of report the Board should consider.” He ordered both sides to submit final papers within seven days. “I don’t think the facts are in dispute,” said Rosenfeld, who described the judge as “really pissed.” Hochman told Newsday that the suit was “frivolous, strictly to advance a political agenda.”
If Judge York issues a permanent injunction, the city will probably appeal it. The decision came after a typically tumultuous RGB final-guidelines meeting, held at Brooklyn’s Borough Hall. About 100 tenants showed up — and they were angry, shouting “POOR TAX!” every time a board member said “low-rent supplement.” Washington Heights activist Jeanie Dubnau was perhaps the loudest; Hochman tried to have her ejected several times, but she refused to leave.
Three of the four Giuliani-appointed public members voted in a bloc with the two landlord representatives. Public member Agustin Rivera and tenant representatives Rosenfeld and David Pagan dissented. The board’s newest member, Justin Macedonia, a corporate lawyer appointed only a few days earlier, abstained.
The RGB voted for the rent increases despite its own studies showing that landlords’ costs had only increased 0.1% last year. As landlord member Harold Lubell was explaining that most tenants could afford to pay more rent and that landlords deserved more money because there’d been 35 inches of brickwork-eroding rain since January, he was almost drowned out by shouts of “Open your books.” “I have a right to speak,” he said. “We have no voice,” a tenant shouted back.
Rosenfeld and Pagan argued against the poor-tax increase as regressive, with Rosenfeld citing a 1993 Housing and Vacancy Survey figure that tenants in the Mott Haven section of the South Bronx were already spending an average of 47% of their income on rent. Lubell claimed that there is “no evidence the people in low-rent apartments are the poorest people.” After shouts of “Yes they are,” he got to the bottom line: “It is not the owners’ responsibility to subsidize.” Public member Edward Weinstein voted against setting the poor-tax threshold at $400, saying it should go to $500. “You’ve just done damage to a million people,” Legal Services lawyer Olive Karen Stamm fumed at Lubell after the vote. “I’m going to wake up tomorrow morning with a clear conscience,” he replied.
At the end of the meeting, the board voted 7-2 — Rosenfeld and Pagan dissenting — to send a letter to the Police Department criticizing its failure to eject tenant hecklers. The only person thrown out was a landlord who tried to punch Arlen Reynoldson, a video cameraman for the New York State Tenants and Neighbors Coalition.
Rosenfeld and Pagan filed their suit on June 18. The “Recent Movers Report” was finished in May, but Hochman withheld it. On June 2, the board voted 5-3 not to release it; Hochman waited until there were five votes against releasing it and then voted for it.
“I believe that report we haven’t been given will tell us rents are rising exorbitantly,” Rosenfeld told the June 22 meeting.
Hochman — the only board member to see the study — has adamantly refused to release it, despite demands from tenant advocates and the media. He says it would give a distorted picture, because the new tenants’ rents are compared to 1996 rents for the same apartments, as the state Division of Housing and Community Renewal hasn’t yet issued the 1997 figures. “I will be damned if I do another report like this so fools can make unfounded accusations,” he told Tenant.
Those “fools” are Rosenfeld and the tenant movement, and the “unfounded accusations” are suspicions that the report was suppressed because it would document that rents in New York City have gone up dramatically since Governor Pataki signed the weakened rent laws — a suspicion easily raised by the slightest glance at any real-estate listings.
Hochman told the June 22 meeting that the information in the report was “absolutely unimportant and unnecessary.” Tenants in the audience responded with chants of “Release the report” and “No vote tonight.”
On June 19, Judge York ordered the board not to vote until the report was released, but Hochman and the Giuliani administration appealed. A few hours before the June 22 meeting, Appellate Division Judge Betty Ellerin reversed York, allowing the vote. Hochman agreed to release the raw data from the survey, and to hold a second meeting June 24 to reconsider the guidelines after board members had had a chance to see it.
The raw data turned out to be hundreds of forms packed in boxes, with no information on how much the previous tenants had been paying. “It gave practically no information whatsoever,” Rosenfeld said at the June 24 meeting; the forms only contained the date of the move, the new rent, and a DHCR computer code. While more than half the forms he saw listed rents over $1,800, he said, RGB staff told him Hochman had ordered them not to give out any of the DHCR data.
Only six RGB members showed up for that meeting. The board voted 4-2 not to reopen debate on the guidelines, with Rosenfeld and Pagan in the minority. In other guidelines, the board voted 5-3 to impose a 5% surcharge on tenants subletting their apartments. It set renewal increases for lofts at 1.5% for one year and 3% for two years, and skyrocketed the “fair-market rent guideline” for vacated rent-controlled apartments (used to determine whether the first new tenant in those apartments can challenge the rent increase as excessive) to $650 or 80% over the old maximum base rent, whichever is greater.
The board voted 5-3 for a 2% increase on rooming houses and no increase for hotels, lodging houses and SROs. Olive Karen Stamm, who represents SRO tenants, criticized the increase. “People have this misguided idea about mom-and-pop rooming houses,” she says, noting that many are owned by big landlords like the Goldman estate and Barry Levites of the Bronx. This sector is one of the few areas where Hochman is sympathetic to tenants, but it is rapidly shrinking, especially in gentrifying areas. For most of the people affected, says Stamm, “the only issue for the landlords is whether they can get rid of them.”
Considering the public members’ general lockstep behavior in voting rent increases, giving them the report might not have made any difference even if it did show that rents had skyrocketed. Rosenfeld disagrees. “I believe that the new members would have gotten a better understanding of what’s going on in the rental market,” he says. “At least we would have had a better chance of convincing them.”
Report or no report, tenants in the real world still have to deal with a limited housing supply, an overheated real-estate market, and the consequences of weakened rent regulations. As the 4 train rolled under Lower Manhattan after the June 22 meeting, a formerly homeless man was expounding on the subject: “A studio’s going for $475,” he declaimed. “How the fuck you gonna make that if you don’t make but $180 a week?”