Rent Guidelines Board Targets Poorest Tenants

In Monopoly, the “Pay Poor Tax of $15” Chance card is one of the least damaging debits in the game. But in a city where landlords are charging Park Place rents and tenants can barely afford the likes of Baltic Avenue, $15 a month can be serious.

On May 7, the New York City Rent Guidelines Board voted 6-2 to propose a “poor tax” of $15 per month on apartments renting for $400 or less, in addition to the standard renewal increases applicable to all tenants. On June 22, at Brooklyn Borough Hall, the RGB will vote on the final guidelines, which will affect about 700,000 rent-stabilized families when they renew their leases or sign new ones between October 1, 1998 and September 30, 1999.

The poor tax has been in effect since 1995, meaning that any apartment eligible for it now has already had at least two surcharges of $15 or $20 built into the permanent rent.

The clear impact of these increases is to eliminate the stock of low-rent apartments, without regard for what will happen to the families living in them or who need them. According to a survey released April 28 by the federal Department of Housing and Urban Development, the nation lost 900,000 low-rent apartments between 1991-1994—and New York City has the worst housing crisis in the country.

But Edward Hochman, appointed chair of the RGB by Mayor Giuliani, has in previous years stated that he believes he must vote for rent increases simply to keep profits inflated, and that the RGB cannot take into consideration the consequences its actions will have on poor families and senior citizens in New York.

Not looking at the foreseeable consequences of your actions is the law-school definition of negligence. There are 600,000 households in the city living at or below the poverty level, and many of them live in rent-stabilized and rent-controlled apartments in the five boroughs—the apartments that will be affected by the supplemental increase. The “poor tax” bears no reasonable relation to any legitimate governmental purpose. The RGB also proposed hitting all rent-stabilized tenants with 2% increases for 1-year leases and 4% increases for 2-year renewals, even though owners’ costs have stayed the same, fuel costs are down 15% and mortgages rates are at an all-time low.

Landlords don’t need these increases and tenants cannot afford them. Income for the bottom four-fifths of all families has decreased 16% in the last two decades, and New York City’s unemployment rate is almost 9%. Rent levels should not rise automatically with no rational basis for it.

Under the weakening of rent laws last year in Albany, vacant apartments can now be deregulated virtually at the owner’s option, by claiming “improvements” which drive the rent above $2,000 a month. For those apartments which remain subject to rent stabilization, landlords can now charge new tenants an extra 18% for a 1-year lease and 20% for a 2-year lease, and more if the previous tenant lived there for eight years or longer.

These vacancy increases are particularly destabilizing and threaten the already inadequate supply of affordable housing. They permanently inflate rents, even though the nominal losses by owners from the transition between tenants are already factored into the general lease-renewal increases, as the RGB’s staff counts them as part of the industry’s aggregate costs.

Vacancy increases also give owners a strong incentive to displace existing tenants, at a time when tenants’ ability to defend themselves from eviction is jeopardized by Governor Pataki’s veto of funds for civil legal services and for the City-Wide Task Force on Housing Court, which provides information to the 90% of tenants who cannot obtain counsel in Housing Court.

Before the RGB’s final vote on June 22, there will be a public hearing, also at Brooklyn Borough Hall on Tuesday, June 16 (see below). Tenants and supporters of affordable housing should sign up to testify by calling the board at (212) 385-2934 ext. 11 or just showing up on June 16.

A large tenant turnout is needed on June 16 and June 22. For more information on Met Council’s campaign to prevent unjustified rent increases for 1,000,000 rent-stabilized apartments, or to get on our mailing list, call (212) 693-0553.