New York's 50-year-old system of rent controls and
tenant protections is in danger of extinction. The
state's rent-regulation laws, a patchwork system
that includes rent control and rent stabilization,
covering over a million apartments in the city,
expire on June 15, 1997. To survive, they must be
renewed by both the Assembly and the
Republican-con-trolled State Senate and be signed
by Governor George Pataki. In the past, Pataki and
key GOP leaders have opposed rent regulations, or
endorsed the "alternative" of gutting the system
by allowing "vacancy de-control"--eliminating
regulations on apartments once the current tenant
moves out. In June 1995, a top state housing
official said Pataki would "wipe out" rent
regulations, which he com-pared to "Communist
policies from a failed society." He was fired, but
a spokesperson for the governor backed his
position. If rent regulations die, tenants will
not only lose protection from massive rent
increases. They also bar your landlord from
evicting you without tak-ing you to court for not
paying rent, letting death-metal bands rehearse in
your living room after midnight, and the like.
Without these protections, you could be thrown out
for reasons as arbitrary as the landlord getting
sick of your face. The law affects both of the
city's systems of rent regulations. Rent con-trol,
dating back to World War II, covers 185,000
apartments, virtually all tenants who have been
living in the same apartment since before July
1971. Rent stabilization, established in 1969 to
control rent-gouging in build-ings built after the
war, covers 1,050,000 apartments, most of the
city's renters. These systems have held down rents
on many of the city's apartments, even during the
'80s real-estate boom. But they have three major
loopholes that have opened the way for the
mon-ster rent-inflation of the last 15 to 20
years. The first is vacancy decontrol of
rent-controlled apartments. Imposed in 1971 by
Governor Nelson Rockefeller,
it caused an eruption of harassment of tenants, as
landlords could get double or triple the rent if
they could drive them out. In 1974, the Emergency
Ten-ant Protection Act put the decontrolled
apartments under rent stabilization. For other
rent-controlled apartments, it allowed the
landlord to raise the rent to market rate once the
tenant moved out, putting them under rent
stabiliza-tion at the new rent. This is the
history of most Lower East Side apartments. The
second is the Individual Apart-ment Improvement
Program, also known as the "1/40th rule." It
allows landlords who renovate apartments to raise
the rent by 1/40 the cost of the job; a $20,000
renovation can bring a $500-a-month increase. This
rule has been the key to gentrification on the
Lower East Side, where virtually every vacated
apartment gets renovated. The third is that it's
easy for land-lords to get away with illegal
increases. If they raise the rent on an apartment
from $500 to $1,000, how is the new tenant going
to know it? How many tenants know that they can
sue to challenge the overcharge? Even if they do,
the State Division of Housing and Community
Renewal (DHCR) takes around five years to process
over-charge complaints. Under Pataki, it has
changed its procedures to make it easier to
dismiss them. The result, as is blatantly obvious
to anyone who's looked for an apartment in the
last decade, is a colossal afford-able-housing
crisis in New York City. It is virtually
impossible to find even a small studio for under
$500; two-bed-rooms go for well over $1,000 in
Man-hattan and $800 in the outer bor-oughs. But
landlords aren't satisfied. The well-financed
self-interest of the real- estate industry and the
free-market fa-naticism of right-wing ideologues
have fueled a propaganda campaign pro-moting
several myths about rent regu-lations. Some of
these myths are attempts to convince tenants that
they might be better off without rent con-trols.
Others are half-truths intended to hide that the
city's biggest landlords would get a monster
windfall if there were no limits on what they
could charge.
Myth #1.
Rent regulations cause abandonment. In
real life, most aban-doned buildings are in the
city's poor-est neighborhoods, where landlords
would have trouble collecting signifi-cant rent
increases even if they could charge them. Detroit
and St. Louis, which never had rent controls, have
suffered massive abandonment; Ber-keley and Santa
Monica, California, which limit rents, haven't.
The one area where this complaint is legitimate is
that DHCR, the state agency that processes
landlords' hard-ship complaints--applications to
in-crease rents on the grounds that they're not
making a minimum profit--is notoriously
inefficient (almost as bad as it is at processing
tenants' rent overcharge complaints).
Myth #2.
Rent regulations "skew rents" and give the rich
bargain apartments. Real-estate shills portray the
typical rent-regulated tenant as a rich widow
paying $386 a month for an eight-room apartment on
the Upper East Side, while a single mother in East
Harlem is paying $750 to share a small one-bedroom
with two kids. "These bargain rents are not
available to New Yorkers looking to move," writes
Joseph Strasburg of the Rent Stabilization
Association, city landlords' leading lobbyist. In
real life, according to figures from the 1993
federal Housing and Vacancy Survey, the median
income for rent-stabilized tenants in the city is
$19,000 a year. Of the 212,000 rent-stabilized
apartments that still rent for less than $400,
only about 200 are occupied by households that
make over $100,000 a year. In contrast, half the
tenants paying less than $400 have incomes below
$10,000 a year, and 80 percent make under $25,000.
One-third of these people--about 70,000
house-holds--pay more than half their income in
rent. Deregulation wouldn't deliver bar-gain rents
to the "deserving poor." It would simply allow
landlords to raise the rents on apartments that
haven't slipped through the loopholes.
Myth #3.
Ifrents were deregula-ted, free-market competition
would lower them. This is what Paul Atana-sio, a
Giuliani appointee to the city Rent Guidelines
Board, claimed in 1995. He hung up when I asked
him how this would actually happen. Deregulation
wouldn't reduce con-struction costs, and it would
probably increase the cost of land by encouraging
speculation. And if eliminating rent controls
might reduce rents, why would landlords be pushing
so hard for it?
Myth #4.
Deregulation would help small landlords most.
Small landlords show up at every Rent Guidelines
Board hearing bearing "We Need $500 a Month MINIMUM"
picket signs. (Lower East Side right-winger Krystyna
Piorkowska is a regular.) Yet 12 per-cent of the city's
landlords own 70 percent of the rent-regulated
apart-ments--a group of less than 3,000 owners,
with an average of 238 apart-ments each.
Deregulation wouldn't dis-tinguish between Donald
Trump and an immigrant widow with one six-unit
building in the Bronx. Many small land-lords say
that getting breaks on their taxes and water bills
would help them more than being allowed to charge
higher rents. Myth #5. Measures like vacancy
decontrol wouldn't hurt tenants, be-cause they
wouldn't affect people who stay in their
apartments. And a law mandating the slaughter of
all children born after July 1, 1997 wouldn't
affect kids already conceived. Aside from being
a titanic incentive for landlords to harass
tenants, mas-sive vacancy increases would bar all
but the richest tenants from moving. What about
couples who break up or couples who get together?
What about people who have kids or whose kids move
out? This propaganda campaign has been abetted by
the city's newspa-pers, which have all backed
deregula-tion in various forms. (The News is owned
by developer Mort Zuckerman, the Times has strong
ties to the real-estate industry, and the Post is
ideologically right-wing.) It is also helped by
the real-estate industry's contributions to key
politicians. Much of the $4.6 million that Mayor
Rudy Giuliani had raised for his re-election
campaign as of February came from real-estate
bigwigs. Donald Trump gave $7,000. Leaders of the
Rent Sta-bilization Association chipped in $7,700,
the maximum city campaign- finance law allows
single donors to give, as did real-estate magnate
Jack Rudin and Grand Central Partnership chair
Peter Malkin. The RSA was also the biggest single
contributor to Lower East Side City Councilman
Antonio Pag‡n's campaigns in 1991 and 1993.
The Mayor, however, is taking a cagier course. In
May 1995, the Rent Guidelines Board set off a
storm of protest by proposing massive vacancy
increases. Rudy took the hint, declared his
support for rent controls, and reined the board in
at the last minute. But in general, he seems to be
trying to push through the largest increases he
can give landlords without sustain-ing political
damage. He's packed the RGB with landlord
supporters, and the increases it approved June
24--the biggest ones allowed for stabilized
apartments since 1989, letting land-lords raise
rents up to 16 percent on vacant apartments--came
directly from City Hall. (Over 200 angry tenants
surged into the aisles after the board's vote,
chanting "Rudy Must Go!" and disrupting the
meeting for half an hour.) With the State Senate
dominated by upstate and suburban Republicans and
Pataki unfriendly to rent controls, tenants may be
facing a grim future. (Giuliani, who has to face
city voters five months after the laws expire, is
much more vulnerable to pressure.) In the past,
Senate Republicans have held the rent laws hostage
to extract concessions on weakening them (like the
1993 deregulation of high-rent apartments) and
other issues. But there are some encouraging
signs. In April, landlords in the Nassau County
city of Long Beach--who had been warehousing
apartments in an attempt to void the city's rent
controls by increasing the percentage of
vacan-cies--tried to push vacancy decontrol
through the City Council. Hundreds of angry
tenants protested, and the Council tabled the
measure "for eter-nity." In May, more than 2,000
tenants traveled to Albany to warn legislators not
to weaken the rent laws.
(Two tenant organizations worth checking out are
Metropolitan Council on Housing: 102 Fulton
Street, New York, NY 10038, and New York State
Tenants & Neighbors Coalition: 505 Eighth Ave.,
18th Floor, New York, NY 10018-6505. Both charge
$20 a year ($10 for low-income people) to join.
Met Council runs a tenant-advice hotline from
1:30pm to 5pm on Mondays, Wednesdays, and Fridays:
Call (212) 693-0550.)