Poor Tax Defeated
By Kenny Schaeffer

The Rent Guidelines Board’s 5-4 vote against imposing a $15 a month surcharge on apartments renting for under $500 a month is a victory for tenants. In each of the last seven years, the RGB has imposed a "poor tax" of $15-25 on low-rent apartments, contributing to the loss of half the apartments renting for under $500 since 1993.

The poor tax has been the focus of intense resistance since the years when Leslie Holmes and Ken Rosenfeld were the tenant members. Last year, four RGB members voted against it: tenant representatives Jeffrey Coleman and David Pagan (executive director of Los Sures in Brooklyn), and public members Agustin Rivera and Bartholomew Carmody.

But of the three new public members appointed by Mayor Rudolph Giuliani the day of the preliminary vote on May 9, two appeared to be clearly responsive to City Hall: David Rubenstein, the city’s deputy budget director, and new RGB chair Steven Sinacori, a 30-year old lawyer from Queens who is a former aide to Giuliani’s chief of staff.

The one possible swing vote was Mort Starobin, who voted for the poor tax his first day on the job, but then stayed outside speaking to Met Council members for over an hour, and he ended up "guaranteeing" that the poor tax would "go down." Six weeks later, his prediction came true.

The median annual income of households paying rents of $500 or less is $15,000, meaning that 100,000 families living in under-$500 apartments can only afford a rent of $375 or less under the federal 30%-of-income standard. On June 5, the RGB heard testimony from Patrick Markee of the Coalition for the Homeless that the poor tax had contributed to the loss of 200,000 apartments renting for $500 or less since 1993, leading to an increase in homelessness to over 27,000 people, including over 11,000 children, in shelters on an average night, levels not seen since the Koch administration. Michael McKee of New York State Tenants & Neighbors spoke about its disparate impact on low-income households and communities of color, and Liz Krueger of the Community Food Resource Center testified about the increase in hunger, as measured in expanding use of free-food pantries throughout the city.

History Repeats Itself: First Farce, Then Tragedy

As the June 20 final vote approached, leaks and rumors confirmed that the poor tax was in trouble, Rivera and Carmody (who actually are from the business community, as all of Giuliani’s "public" appointments have been) were believed to be pressing for an increase to 4% and 6%, in place of the preliminary guidelines of 3% and 5%, if the poor tax were defeated. Hours before the vote, word came from sources on and around the RGB that it would vote in favor of 4% and 6%, with the poor tax as well. The story was that Giuliani’s housing commissioner, Jerilyn Perrine, was insisting on those increases.

It is impossible to know whether Mort Starobin voted his conscience or was implementing a decision by Liberal Party hack Bob Harding, the deputy mayor who calls the shots on the RGB on Giuliani’s behalf. Or both. In any case, the final vote mirrored the original preliminary vote on May 9: 4% and 6% and no poor tax, before Starobin called for a "do-over," claiming he misunderstood what he had voted on.

But if the May 9 vote was a farce, the June 20 vote was a tragedy, in that further unaffordable rent increases are being imposed on more than 2.3 million New Yorkers because of City Hall’s receptiveness to the real-estate industry. On June 22, Lisa Colangelo in the Daily News reported that the additional percentage-point increase was the result of intense landlord lobbying of City Hall.