t_ 1 COMMITTEE ON HOUSING AND BUILDINGS 230 2 ACTING CHAIRPERSON OGNIBENE: 3 protecting the rental market when there are people who 4 can afford to pay higher rates if they 5 MR. M. McKEE: 6 statement. 7 finish. 9 May I please finish my You asked me a question, I didn't get to ACTING CHAIRPERSON OGNIBENE: 8 How is it You answered it. ID :E er 0 u. 10 MR. M. McKEE: No, I gave you a partial ~ () 0 t; 11 answer. er w en ~ 12 ACTING CHAIRPERSON OGNIBENE: 13 that in a rent controlled apartment after the elderly 14 tenant would leave, that the capacity to inherit the 15 rent control aspect should be continued or that it 16 should be decontrolled? Do you agree a. :::, 0 er (!) >ID er 0 () 17 MR. M. McKEE: I disagree with the current 18 law which decontrols an apartment under rent control 19 upon vacancy, and if it's in a building with six or 20 more units it goes under rent stabilization with 21 certain provisions. w :i::: I- 22 ACTING CHAIRPERSON OGNIBENE: I understand 23 that, but I mean it is possible sometimes, and I've had 24 a lot of problems with senior tenants who have been 25 living alone but then someone moves in who was a L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 relative and they then absorb the benefit of that. MR. M. McKEE: 3 ID ::::!E a: 0 u. 4 successor tenant. 5 should be expanded. 231 . They become a legal We believe the rights of succession 6 ACTING CHAIRPERSON OGNIBENE: 7 indicated that for 1993 an affordable rent to a median 8 renter at 30 percent of income, that 30 percent of 9 income has been established by whom? 10 MR. M. McKEE: Well, frankly, You've also in my )<: (.) 0 t:; 11 opinion, it's an invalid standard but it's commonly 12 used. 13 was elected President in 1980 the standard that was 14 used was 20 percent of income, that was what low income 15 people were a: w (/) :5 0 I want to remind you that before Ronald Reagan ~ 0 "',;, "' N 6 0 'I> ~ a. :::> 0 a: Cl > ID a: 0 (.) ACTING CHAIRPERSON OGNIBENE: 16 17 I just wanted to know. I think that 30 percent is 18 MR. M. McKEE: 19 excessive for many people. 20 housing costs is something that many people can't 21 afford. w J: I- 22 I 23 commonly used. I think that 30 percent for just used 30 percent because it is 24 ACTING CHAIRPERSON OGNIBENE: Now under 25 that formula you have a rental of $475 but the asking L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 rent is $650. 3 approximately $175 in rent? 4 make up that difference? 5 232 Who should pick up the cost of MR. M. McKEE: Whose obligation is it to That's pointless. The 6 point here is to show that people going out into the 7 market, for whatever reason, because your family has 8 grown and you need a larger apartment or you have to 9 move because you can't get the landlord to make repairs 10 or whatever, people going out into the market and 11 looking for vacant apartments are finding over the last 12 decade an increasing affordability problem. 13 fewer apartments that are vacant and on the market are 14 affordable to the majority of tenants. Fewer and 15 Now if you look back at the same trend in 16 the 1970s, which I did a year or so ago, you will find 17 that the trend goes even farther back because in the 18 '70s a majority of apartments on the market that were 19 vacant were affordable 20 ACTING CHAIRPERSON OGNIBENE: We've had 21 testimony that the landlords are losing buildings in 22 rem at a substantial rate because they're not getting 23 enough income out of the property in order to sustain 24 the cost of operating the building. 25 that a person could pay $475 You're indicating when you say $650 I 1 COMMITTEE ON HOUSING AND BUILDINGS 2 have to assume that that's the asking price of the 3 landlord. How do they operate the building if the 4 5 233 rents are not producing enough money? MR. M. McKEE: 6 The asking rent is not only 7 related to the operating costs of running the building 8 but ACTING CHAIRPERSON OGNIBENE: 9 Also, the Ill :; a: 0 u. 10 $475 doesn't indicate what the tenants will pay if they 11 need housing. 12 fair to pay and I am assuming that $605 is what's fair 13 to receive. 14 you some information as a Council how do we bridge the 15 gap )<: (.) ~ en You're indicating that $475 is what's a: w en ~ 0 I'm trying to receive from you, get from ~ .,,0 .;, .,, C'II 6 0 "? ~ 16 MR. M. McKEE: I think the reason you see 0.. ::> 0 a: Ill a: 0 (.) '90s is that, unlike w J: I- 23 24 25 ACTING CHAIRPERSON OGNIBENE: Are you indicating that there is a very high vacancy rate? MR. M. McKEE: No. t_ 1 COMMITTEE ON HOUSING AND BUILDINGS 234 2 ACTING CHAIRPERSON OGNIBENE: 3 saying that the reason is that a lot of apartments are 4 remaining vacant is that persons can't afford to move 5 into them? MR. M. McKEE: 6 You're I didn't talk about the 7 vacancy rate, I talked about it at the beginning of my 8 testimony. The vacancy rate is down. ACTING CHAIRPERSON OGNIBENE: 9 Why is the ID :ii a: 0 10 vacancy rate down? LL :.:: (..) 0 t; MR. M. McKEE: 11 There are two different a: w (/) ~ 0 st 0 12 issues. 13 think it shows up in the Housing and Vacancy Survey 14 data, the main reason is because there was more 15 warehousing in 1993 than there was in 1991. The vacancy rate is down, in my opinion, and I II) ,;, II) N 6 0 "i' 16 ACTING CHAIRPERSON OGNIBENE: Are you 0. :::, 0 a: Cl 17 saying warehousing? ~ a: 0 (..) 18 MR. M. McKEE: I think more landlords are w J: I- 19 holding apartments vacant because they think the market 20 is going to turn back up, and there are signs that the 21 market is turning back up. 22 that's how I interpret the numbers. It may be speculation but ACTING CHAIRPERSON OGNIBENE: 23 We've had 24 testimony from landlords that they don't have any 25 money. 1 L 2 COMMITTEE ON HOUSING AND BUILDINGS MR. M. McKEE: 235 You also have had very 3 skewed testimony from owners. 4 Donald Trump or Sam Lefrak, you've only heard from 5 small operators. 6 find quite interesting, testified that more property 7 owners of color are buying more buildings. 8 regulation is so onerous, then why is that the case? 9 You haven't heard from But Mrs. Daniels, whose testimony I ACTING CHAIRPERSON OGNIBENE: If rent I have found [!l :; CI: 0 u. 10 that people don't really understand what they're 11 getting themselves into, is what I've found. 12 represented a lawsuit where the tenants bought their 13 building and six months later they were looking to sell 14 the building, and I know from personal ~ (.) ~ I've (/) CI: w (/) :5 0 'It 0 It) J, It) 15 MR. M. McKEE: That's not a reason to C\I 6 0 a,> ~ 16 dismantle the rent regulation system. Q. :J 0 CI: (!l 17 ACTING CHAIRPERSON OGNIBENE: 18 reason because the question that I fundamentally want 19 answered is that landlords are testifying here, and I 20 have no reason to disbelieve them, that they are 21 insufficient because the statistics demonstrate that 22 they've put a lot of money into their buildings, and 23 their heart and sweat, and giving them up to the city 24 and they're losing these properties, so I have to 25 believe that they don't have enough income to sustain It is a good >[!l CI: 0 (.) w J: I- \. t_ 1 COMMITTEE ON HOUSING AND BUILDINGS 2 these properties. 236 I'm asking you as a responsible citizen 3 4 what do we do to bridge that gap so we don't lose our 5 housing stock. MR. M. McKEE: 6 7 regulation system instead of weakening it. ACTING CHAIRPERSON OGNIBENE: 8 9 Strengthen the rent that? How do we do You just CD :ii cc 0 10 MR. M. McKEE: u. Unfortunately, the State :.:: u ~ (/) 11 Legislature has tied your hands. You have the power 12 here to weaken the laws but you don't have the power to 13 strengthen them, so this is really an unfair playing 14 field that we find ourselves on. cc w ~ 15 a.. You don't have the right, Council Member 16 Eristoff and Council Member Michels do not have the 17 right to put in the bills that we want to strengthen 18 the laws. 19 Republican-led State Senate for that, but we have to 20 come here and stop you from decontrolling rents. ::::, 0 cc Cl >CD cc 0 u We have to go to Albany and fight a w :i:: I- 21 ACTING CHAIRPERSON OGNIBENE: What you're 22 effectively doing is ruining housing in the City of New 23 York. 24 25 But the point that you have to confront is that we have a serious housing crisis in the City of L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 New York and while you come in here and give me 3 platitudes about what you think an effective rate is 4 for income, you have no viable solution to solving the 5 problem. MR. M. McKEE: 6 237 I disagree with you. I've 7 said it over and over, and I think, frankly, Council 8 Member, I believe that one's view of rent regulation is 9 closely related to one's view of the world, and I don't 10 expect to come here and change your opinion and you're 11 not going to change mine. 12 ACTING CHAIRPERSON OGNIBENE: 13 here to testify. 14 solution to a serious problem. I'm asking you for a legitimate 15 MR. M. McKEE: 16 ACTING CHAIRPERSON OGNIBENE: 17 And I gave you one. And that was what 18 19 But you came COUNCIL MEMBER ERISTOFF: Mr. Chairman, aren't we getting away from the point? MR. M. McKEE: 20 I gave you a number of 21 proposals. 22 Reform the real property tax system so that 23 You haven't responded to any of those. CHAIRPERSON SPIGNER: Let me ask a 24 question. 25 that any sort of vacancy increase is appropriate. You've already stated that you don't feel I 238 1 COMMITTEE ON HOUSING AND BUILDINGS 2 don't see that even if you were to increase 3 substantially the anti-harassment or anti-eviction, 4 under no way could you see assisting property owners by 5 granting them the right on vacancy to increase to any 6 level. I don't believe there 7 MR. M. McKEE: 8 should be any vacancy increases at all. 9 functional and effective system of rent regulation I believe a 10 should treat occupied apartments and vacant apartments 11 exactly the same. 12 certain reasons, because of operating costs going up, 13 for example, the rent increase should be the same for 14 the vacant apartment and the occupied apartment. 15 If the rents should go up because of And I think there are a number of 16 destructive effects of our system of rent regulation 17 which over the years has allowed rent increases upon 18 turnover that are greater than 19 20 CHAIRPERSON SPIGNER: What role do you see the role of rent stabilization 21 MR. M. McKEE: I believe in rent 22 regulation, rent control and rent stabilization, and I 23 certainly don't think the systems as they now exist are 24 perfect. 25 absolutely essential municipal service. I believe rent and eviction regulation is an I think the L 239 1 COMMITTEE ON HOUSING AND BUILDINGS 2 city would be unlivable, let alone affordable, without 3 it. CHAIRPERSON SPIGNER: 4 5 that in any way jeopardizing the housing stock? MR. M. McKEE: 6 7 No, I don't believe so at all. CHAIRPERSON SPIGNER: 8 9 So you don't see Council Member Eristoff. a:i :E a: 0 COUNCIL MEMBER ERISTOFF: 10 Thank you, Mr. LL :.:: u 0 I- 11 Chairman. m a: w rn :'S 13 0 st 0 And thank you for your testimony and 12 welcome, Mr. McKee. I 14 just wanted to follow up on a few things I() J., I() N 6 0 'I> 15 that were brought up earlier by my esteemed colleague 16 from the Borough of Queens, which has many one and two 17 family houses. 18 suggested that in fact rent regulation is not the 19 source of the housing distress we find ourselves in but 20 in fact that real estate taxes, among other costs, are 21 really one of the sources of distress. 22 that some landlords are having trouble meeting their 23 expenses? Cl. ::::> 0 a: (!) We had testimony earlier today that ~ a: 0 u w :I: I- 24 MR. M. McKEE: Would you agree I believe there is probably \. 25 a very small number of landlords who are not doing l_ 1 COMMITTEE ON HOUSING AND BUILDINGS 240 2 well. 3 think it is very much related to location. 4 Helmsley says, there are three rules in real estate: 5 location, location, location. I believe that, I think it's a minority, and I COUNCIL MEMBER ERISTOFF: 6 As Harry You would agree 7 then that although it may be a small number, wouldn't 8 you agree that one way of attacking the situation is 9 to somehow do something about those expenses and, if 10 so, then we should be looking at property tax as one of 11 the major culprits here? 12 MR. M. McKEE: Low income housing, and by 13 that I mean housing that houses low income people, and 14 that is whether it's a privately owned apartment 15 building or whether it's a low income tenant co-op or 16 whether it is a low income homeowner, low income 17 housing is threatened by our unfair real property tax 18 system, by our unfair and new system of water and sewer 19 charges. 20 And those are things that I think should 21 be done and I think you are going to see low income 22 housing lost, not just privately owned rental 23 buildings, but you're going to see more problems if 24 those two issues aren't dealt with. 25 COUNCIL MEMBER ERISTOFF: Let me explore L_ 2'41 1 COMMITTEE ON HOUSING AND BUILDINGS 2 and get your reaction to something that my colleague, 3 Council Member Michels, has begun to articulate and 4 that is, it's very interesting when we step back and we 5 look at who's advocating the so-called reform measures 6 or decontrol measures and we look at where they come 7 from and we look at the disparity in property tax 8 treatment and then we draw a correlation and we find 9 that, frankly, we have a subsidized population in CD ~ a: 0 10 certain communities that is in the forefront of those 11 who would take away one of the only protections that 12 exists against the overcharging that many high rise 13 residential communities now experience. 14 agree with that, generally 15 MR. M. McKEE: LL :,:: (.) 0 I- (/) a: w ~ 16 Wouldn't you I couldn't put it better than you just did. a. :::i 0 a: Cl ina: 0 (.) 17 COUNCIL MEMBER ERISTOFF: Thank you very 18 much again, and I thank you for your patience in 19 waiting all day. w J: I- It's been fun. 20 MR. M. McKEE: 21 COUNCIL MEMBER MICHELS: Mr. McKee, your First of all, thank you very 22 release is premature. 23 much for the work that you've done on this issue and I 24 appreciate what you've done over the years. 25 you've been one of the great leaders of tenants in the I think L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 city and I appreciate the work you continue to do. 242 Basically, I find myself in agreement. 3 4 think we proved it here today and many witnesses have 5 proven that there is no relationship between rent 6 regulation and abandonment. MR. M. McKEE: 7 8 I I think that's a given. The literature just proves the real estate claim. COUNCIL MEMBER MICHELS: 9 However, let's go 10 on the hypothesis that I have found, and I think you 11 have found, that the most stable communities in the 12 city, where there is less turnover, where people live 13 there, bring up their families, have been the areas 14 where we do have rent control and rent stabilization. 15 What's the explanation for that? MR. M. McKEE: 16 I believe that rent 17 control and rent stabilization or rent regulation in 18 general is the single most important mechanism we have 19 to preserve what is left of economic integration in our 20 city. 21 tell you in my neighborhood, which is Chelsea, we used 22 to have a lot more low income people living in the 23 neighborhood and many of them have been priced out, 24 harassed out, burned out. 25 And if you didn't have rent regulation, I can But the thing that's keeping the low L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 income people in that neighborhood, the ones who are 3 still hanging on, is rent regulation. 4 they would be gone because the landlords, boy, they 5 could certainly collect the 25 . percent vacancy 6 allowance in my neighborhood, I'll tell you that for 7 sure. COUNCIL MEMBER MICHELS: 8 9 than that. 243 And without it I think it's more I think we have seen the social fabric of 10 those neighborhoods in the city kept together and it's 11 resulted in integration 12 MR. M. McKEE: I think the other thing to 13 say about it is if you have rent regulation then 14 tenants have more disposable income than they would 15 otherwise have and they can support local businesses. 16 This is all part of the fabric of our system 17 tax, income taxes. 18 negative consequences for the city. sales I believe decontrol could have First, you should understand that in order 19 20 to collect one dollar additional real property tax, 21 five or six dollars goes from the tenant's pocket to 22 the landlord's pocket because it's not a straight 23 transfer. 24 one-sixth of that gets 25 immediate, as buildings are reassessed If you raise rents, only one-fifth or and it's eventual, not one out of L 244 1 COMMITTEE ON HOUSING AND BUILDINGS 2 every five or six dollars of increased rents goes into 3 city coffers. 4 pocket in order to get one dollar increased real 5 property tax to the city. Income tax, I think, I would certainly 6 7 support an income tax surcharge. COUNCIL MEMBER MICHELS: 8 9 So you're putting $5 in the landlord's But the sales taxes, we get a bigger bang for our dollar. MR. M. McKEE: 10 I believe you would have a 11 very detrimental effect on a lot of neighborhood 12 businesses that people support if they had to pay 13 market rents. COUNCIL MEMBER MICHELS: 14 15 Thank you very much. 16 MR. M. McKEE: Thank you. 17 CHAIRPERSON SPIGNER: 18 We're going to take a short break in the Thank you. 19 action to give the stenographer a chance to refresh 20 herself and we'll start again in three and a half 21 minutes with Dan Margulies. (Whereupon, at 5:45 p.m. a recess was 22 23 taken.) (Whereupon, at 5:55 p.m. the hearing with 24 25 resumed.) 1 L COMMITTEE ON HOUSING AND BUILDINGS 2 3 CHAIRPERSON SPIGNER: 4 Identify yourself for the record. 5 MR. D. MARGULIES: 6 Chairman, and thank you. 7 everyone. 9 a: 0 u.. Mr. Dan Margulies from CHIP. Good morning, Mr. It's been a long day for I appreciate the opportunity to speak. 8 m :l? 245 My name is Dan Margulies, executive director of the 10 Community Housing Improvement Program, CHIP. 11 trade association of apartment building owners. 12 have 2,500 members in the five boroughs. We're a ~ u 0 I- We C!) a: w ~ 13 I was trying to think about what to talk 14 about today that would be new and I'm struck by how ,,, ,,,J, g 15 much isn't, how much competition of old canards there ":' 16 are. 17 nonsense about rent regulation having nothing to do 18 with abandonment, based on these studies that say that 19 abandonment occurs in communities that don't have rent 20 regulation. 0 st 0 N And the thing that came up most recently is this Q. :> 0 a: (!) >m a: 0 u w :r I- 21 They have the same logic that says that 22 people who don't smoke get cancer so smoking couldn't 23 cause cancer. 24 connection. 25 It's nonsense. There's no logical Every patient is different. New York has different problems and had 1 COMMITTEE ON HOUSING AND BUILDINGS 2 different problems in the '60s than Boston. 3 buildings that were abandoned there were wood frame, 4 hundred year old structures. 5 they were abandoned. 6 and stone and they didn't fall down. 7 different patients and different problems. 8 regulation was certainty not the only problem but to 9 say that it had no impact was nonsense. 10 246 The They fell down; of course The structures here were brick There are Rent Many subjects have been dismissed. Lost 11 property taxes, everybody talks about whether it's $150 12 million or whatever a year. 13 you could collect some of the hundreds of millions of 14 dollars of delinquent taxes. 15 conditions in regulated housing compared with 16 unregulated apartments. Nobody mentions that maybe We have poor housing 17 Housing, according to your own vacancy 18 survey and to a number of city surveys, unregulated 19 housing is better maintained at the same rent because 20 owners feel that they're in control of their property. 21 You have reduced housing opportunities because the 22 benefits that rent regulation supposedly provides 23 encourages tenants to stay in their apartments longer 24 than renters normally do. 25 of empty nesters overoccupying space. It encourages the phenomenon It discourages L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 newcomers to the communities, it discourages young 3 people and it discourages economic growth. 4 know they can't find a place here. 247 Businesses The benefits seem perversely targeted to 5 6 the stable, advantaged, white middle class in the 7 Manhattan core. 8 between the regulated rents and the market rents are 9 greatest shows that we're talking about Manhattan. 10 Every study of where the differences You have devastation in poor and minority 11 neighborhoods where small property owners expected 12 homeownership to lift them up the economic ladder and 13 instead had regulations knock them down. 14 You have just the futility and absurdity 15 of a system of price controls that in 1993 achieved 16 average stabilized rents citywide of $593 per month as 17 compared with average unregulated rents of $636 a month 18 difference. 19 Sturm und Orang, all this lost property tax, 20 month difference between the average regulated and 21 unregulated rents. 22 For this we have all this debate, all this And, for $43 a for want of a better description, we 23 have a culture of tenant protection that protects drug 24 addicts and other undesirable tenants from eviction or 25 non-renewal of leases at the expense of good tenants L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 who deserve to enjoy their homes in peace and quiet. 3 These problems aren't new 248 and I 4 thought maybe I wouldn't talk about them. 5 explained it's not religion, there's no point in 6 arguing religion. 7 going to be converted, then there's no point in talking 8 about it. McKee If you believe it and you're not Then I thought I would. The Governor just proposed spending 9 10 i t is a system we're perpetuating 11 just proposed spending $37 million next year on rent 12 administration. 13 What do we get for the $37 million that no one else 14 spends? 15 rent reduced $30 a month and frozen because the 16 temperature inside their refrigerator was 43 degrees. 17 The DHCR didn't say what it should be, nor the 18 inspector adjust the thermostat to see if it made a 19 difference. 20 the Governor Every other state spends nothing. In one decision last month a tenant had their And in another case, DHCR issued two 21 orders on duplicate complaints one reducing the 22 rent and one not 23 day. 24 reduction, losing more than $3,000 a month, in a case 25 that goes back almost two years, because a DHCR based on two inspections the same I have a member suffering a building-wide rent L 1 COMMITTEE ON HOUSING AND BUILDINGS 2 inspector reported four dirty windows in a six story 3 building. 249 It happens every day. This is the system we're paying for. 4 I 5 represent building owners and I'm very concerned that 6 the owner-managers 7 buildings going with their own sweat 8 breed. 9 Institutional owners the hands-on guys who keep -- are a dying They're being killed by regulations and taxes. and this is happening all 10 over the place 11 over and they can't be bothered with marginal housing 12 and small buildings. 13 institutional owners are taking Most people agree that the city already 14 owns too much housing. 15 time when people who can still pay taxes would just as 16 soon turn the property over, particularly small 17 properties. 18 Yet I think we're approaching a Ultimately, I decided one problem is not 19 more important than another. 20 could go on and keep listing things forever. 21 control is 51 years old this month. 22 for retirement. 23 is vacancy decontrol. 24 opportunity now because of the economy. 25 unregulated market and the regulated market rents have The list is endless, I But rent It's time to plan The only way to get out of this mess You have a unique political The ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 come so close, the impact of decontrol now will be as 3 minimum as a could ever be. 4 now. The political time is The studies are all out there. 5 Thank you. 6 CHAIRPERSON SPIGNER: 7 8 9 250 Do we have copies? MR. D. MARGULIES: Yes, I gave a whole bunch of copies there. ID ::!: a: 0 u. I 10 CHAIRPERSON SPIGNER: Thank you. 11 Assemblyman Steve Sanders. 12 MR. H. MITTELMARK: 13 Mittelmark, representing Assemblyman Sanders. ~ (.) 0 !;; a: w ~ 14 a. :::> 0 a: Cl My name is Howard As you know, the State Legislature 15 recently completed a hard fought battle over just this 16 issue, trying to maintain the rent stabilization 17 regulations, and we were forced to make some 18 concessions last year to renew the emergency tenant 19 protection act. ~ a: 0 (.) w J: I- 20 While those concessions were largely 21 symbolic and protection for rent stabilized tenants 22 remained largely intact, it was still another instance 23 of attempting to chip away the law. 24 We can't let that happen here. In a city \ 25 where rents already exceed the ability of many tenants 1 COMMITTEE ON HOUSING AND BUILDINGS 2 to pay, where vacancy allowances reward those landlords 3 who force tenants out and reward landlords who neglect 4 their buildings, it would be appalling to increase that 5 reward. 6 I've ever heard, the thinking behind luxury decontrol 7 is that overpriced apartments need to be decontrolled. 8 In my neighborhood I heard the figure 900 in one of the 9 bills. 251 The thinking behind, the most absurd thing In our district $900 gets you a sixth floor 10 walk-up with a bathtub in the kitchen. 11 luxury apartment. 12 That's not a In Albany we're faced with the 13 continuation of legislators from upstate and the 14 suburbs whose interests are different from ours. 15 There's no such need here in New York City to modify to 16 rent controls that have been proposed not be allowed to 17 take place. 18 continue unchanged. Rent protection should be allowed to 19 Thank you. 20 CHAIRPERSON SPIGNER: 21 Maya deHaynau. 22 MR. M. DeHAYNAU: Thank you very much. Greetings. I have been 23 the owner for quite a few years in America. 24 come from another country once a upon a time and have 25 called with some other properties owners that have I have ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 suffered the consequences of rent control and the rent 3 stabilization. 4 Rent control is rent control. 252 In America 5 it is still taking root and continues its evil 6 practices and ideology and it is taking away, it is the 7 procedure by elected officials who are supposed to be 8 in service of American good and our democratic . 9 processes of free enterprise to take over the private 10 property by all kinds of means, by hook and crook, 11 blood-sucking, from those what were inadvertently, 12 innocent, not knowing that what this country is about 13 with these laws that are beseeching property owners 14 from all their actions. 15 It is so unfortunate, it is so unreal and 16 it is so harmful. 17 up to this country for exemplary democratic rules and 18 regulations, not the ones that we are emphasizing, and 19 all the time squeezing against those that work the 20 hardest, that save when they come here and work very 21 hard, cleaning homes, working with the best products, 22 which is not as damaging as 23 on this and that project, 24 political football is going to be used and maneuvered 25 by liberal Democrats who are running this city down the And while all the world is looking it's a million dollars just to figure out how this ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 hill. Now I am property owner. 3 253 I have suffered 4 from rent control. 5 and confusing and creating such a state of mind where 6 one doesn't want to be involved anymore. 7 to give up their house. 8 and sewer are increasing and again, faithfully, 9 undemocratically, taking whatever income there would 10 It has been implemented, mixing up Nobody wants Real estate taxes and water be. They say now they're going to hit you with 11 12 bigger and bigger assessments and bigger and bigger 13 extortion and then 20 percent interest comes upon this 14 real estate tax. 15 city takes over so that they can sell it to some of 16 their friends who are much richer than the small 17 homeowner, and the process goes on and on, spending 18 money. 19 Nobody wants to give it up but the Why should you be using so much of our tax 20 money to hurt the ones that are actually the backbone 21 of America, backbone of those that need the roof over 22 their head? 23 ready and prepared to continue and working and labor 24 organize and helping and serving because that's the 25 life, serve, serve, serve, as we could serve to our We are slaves to the tenants and we are ( 254 1 COMMITTEE ON HOUSING AND BUILDINGS 2 children, that's the mother and the father in us, and 3 we should value those people and appreciate lower real 4 estate taxes. Stop this rent control, decontrol. 5 When 6 an apartment becomes available and empty, let decontrol 7 take place. 8 are pro-democratic property owners from the free market 9 in America. I support the other measures of those that 10 CHAIRPERSON SPIGNER: Thank you. 11 CHAIRPERSON SPIGNER: Mr. Eristoff has a 12 question he wants to ask you. COUNCIL MEMBER ERISTOFF: 13 I wanted to make 14 a statement. 15 you about real estate taxes and one of the other 16 factors you mentioned that that has absolutely nothing 17 to do with rent control, in fact, they have to do with 18 the expenses incurred because you're being 19 discriminated against, you're being hassled by 20 bureaucracy, but don't take that out on the tenants. 21 I want to say that I totally agree with MS. M. DeHAYNAU: I'm taking it out on 22 politics that gives the tools to tenants to hurt and 23 harm and to work against property owners. 24 personally had a rent controlled apartment where a 25 tenant was living there in a three room apartment And I ------ ( .. ·255 1 COMMITTEE ON HOUSING AND BUILDINGS 2 paying about $400 and was moved to a four room 3 apartment before rent control. 4 more and said you're welcome because she said I am 5 getting too crowded. 6 I just let it be $50 After that started, this process of me 7 finding out, she said I owed her the money, after three 8 years I gave her $3,000 so she can be satisfied. 9 needed to go someplace else besides that. She I paid her. ID :::e a: 0 u.. 10 Now the paper comes, after five years, we are thinking 11 that there is something, fair market rent it should be, 12 but still you or she can go on now to the higher court, 13 Supreme Court, and have to write also a letter to the 14 attorney general. ~ u ~ en a: w ~ 0 st 0 IO J, IO "' 6 15 I'm bothered, I'm traumatized, I don't 0 "i' c.. 16 want to rent because I'm afraid. And I'm losing the 17 building because the finance commission with the help 18 of state, and the state would like to see you to the 19 point where it's being then pulled out from you, and I 20 am going to be homeless on account of these kind of 21 laws that are ridiculous, evil, improper, inhuman and 22 undemocratic, un-American. :::l 0 a: Cl >ID a: 0 u w J: I- 23 Thank you very much. 24 CHAIRPERSON SPIGNER: 25 Kenneth Schaeffer, on behalf of Assembly Member Ed Sullivan. ----------- ---- 1 ( COMMITTEE ON HOUSING AND BUILDINGS 2 3 MR. K. SCHAEFFER: 256 Good afternoon, Chairman and Council Members. Before I get into the prepared testimony 4 5 on behalf of Assembly Member Edward Sullivan, who is on 6 his way down from Albany, I 7 observation on a dialogue that's taking place between 8 the witnesses and the panel. 9 a tendency to get government out of housing is all that just want to make an It seems to that there's CD ~ cc 0 u.. 10 would be needed to solve the problem. 11 point out that long before there was publicly owned 12 housing or code enforcement there was unregulated 13 private housing. I just want to :.:: () ~ (/) cc w (/) :5 0 14 We ended up with a housing crisis that ~ LI) .;, LI) t\l 6 0 a;> 15 citizens were told just ending rent regulation and 16 public involvement is not a new idea. 17 that didn't work. 18 a crisis, but you have to resist just looking for quick 19 fixes. It's an old idea Q. ::> 0 cc Cl >CD cc 0 () And certainly there's a problem and w J: I- 20 21 22 Why luxury decontrol is a bad idea for New York. Proposals are being circulated to 23 deregulate more of New York City's housing stock, such 24 as the bill which would totally decontrol apartments 25 renting for more than $2,000 per month if occupied by ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 households with incomes above $250,000 annually. 3 Why is this a bad idea? 4 1• 5 257 Lack of apartments in the $2,000 range will trigger more competition for lower priced units. 6 The amount of regulated housing already is 7 far less than the need, as evidenced by the hundreds of 8 thousands of families on the waiting list for New York 9 City Housing Authority apartments and Mitchell-Lama 10 units. Any reduction of the number of regulated 11 12 units will result in increased competition for the 13 remaining units, and those most vulnerable will be at 14 risk of becoming homeless. 15 apartments in the $2,000 to $4,000 range, those of 16 moderate income will choose slightly less desirable 17 housing in the $1,500 to $2,000 range, creating a 18 downward squeeze. 19 2. If there is a scarcity of Landlords would be given a huge 20 incentive to evict tenants from apartments near the 21 $2,000 level. 22 Since the law currently allows a landlord 23 to increase the monthly rent by one-fortieth of the 24 amount spent on improvements to a vacant unit, on top 25 of the normal guidelines increases for a new lease, ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 landlords wiil face an enormous economic temptation to 3 displace existing tenants in all apartments renting for 4 $1,000 or more. 258 This has already begun as a result of the 5 6 limited decontrol enacted by the State Legislature last 7 year. 8 except to tenants claiming their income is $250,000 9 annually, whether it really is or not. Landlords would then refuse to rent apartments 10 11 3. This measure would drive well-off taxpayers out of the city and off of the tax rolls. 12 If households earning about $250,000 are 13 faced with a huge increase in their housing costs, some 14 will inevitably leave. 15 its most solid tax base at a time when it can least 16 afford it. 17 projected as taxes on the owners' increased profits. 18 The city will lose a portion of This could well exceed the revenue 4. This proposal does not address any 19 real need and will not contribute to the solution of 20 any genuine problem. 21 Proposals to deregulate higher priced 22 apartments do not respond to any part of New York's 23 housing crisis. 24 section of the wealthiest owners, at the costs stated 25 above to the housing market and the city's tax base. They would merely benefit a small ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 No one has argued that the owners of luxury buildings 3 are indigent and need public largess at this time. .. 259 4 Why is luxury decontrol an issue? 5 Luxury decontrol is a largely symbolic, if 6 not illusory, issue that fails to address the critical 7 problems with the administration of rent regulation in 8 New York, sends a very wrong message, and to the extent 9 that it has an immediate effect on the housing crisis, ID :i: a: 0 IL 10 will worsen it. :.:: u ~ (/) The critical problems with rent regulation 11 a: w (/) :5 0 12 in New York are (a) the continual rising of rents 13 beyond the ability of increasing numbers to pay for it, 14 as demonstrated by the Housing and Vacancy Survey, 15 partly due to loopholes in the stabilization law, and 16 partly to the ongoing recession, low wages and the 17 inadequate shelter allowance; st 0 "' .;, "' 6 N 0 ~ a. ::> 0 a: (!) > ID a: 0 u (b) the loss of regulated housing due to 18 w I I- 19 conversion and abandonment at a rate faster than it is 20 replaced; and 21 ( C) the lack of enforcement of laws to 22 protect existing affordable housing, specifically rent 23 overcharges and cost enforcement, due to inadequate 24 budget allocations and lack of will, as well as the 25 failure of housing court to provide useful relief to ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 the vast majority of tenants who must go unrepresented 3 by counsel. 260 4 Far from addressing, or even identifying, 5 these problems, the focus on luxury decontrol contains 6 an implicit agreement that the housing crisis is 7 somehow caused by wealthy tenants taking advantage of 8 benefits they do not need. 9 has no relation to the reality of New York City's 2.5 As the survey shows, this m :;; a: 0 10 million tenants. 11 housing by taking the ceiling off the most highly 12 priced units will benefit only a tiny privileged 13 section of landlords with no benefit whatsoever to the 14 overall system, only harmful effects. LL Enriching the owners of luxury :.:: (..) ~ a: w U) :s 0 st 0 II) ,;, II) "' 6 15 Similarly, the proposal for a 25 percent 0 ~ a.. ::::, 0 a: Cl 16 vacancy increase would cause immediate additional 17 homelessness by pricing more apartments out of the 18 reach of more tenants. 19 already factor in the costs of re-renting apartments. 20 The whole concept of rent regulation flows from the 21 fact that we are still in the midst of a severe housing 22 crisis, and rents must be kept as low as possible while 23 providing landlords a fair return. >m a: 0 (..) Rent guidelines increas~s w I I- 24 25 Vacancy increases violate this cardinal rule by pushing rents above the fair return level. ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 Vacancy increases are also particularly harmful because 3 they provide an economic incentive for landlords to 4 evict tenants when they might otherwise choose not to. 5 It tells the landlord, you can be human, but it will 6 cost you money. 7 will have to deal with the resultant homelessless? 8 don't think so. 261 Is this smart policy, when government I 9 New York's rent laws need to be preserved 10 without any of the weakening amendments that have been 11 proposed, each of which would make the housing crisis 12 worse with no corresponding benefit. 13 Thank you. 14 CHAIRPERSON SPIGNER: 15 Mr. Lee Sterling, American Property Rights Association. 16 MR. L. STERLING: My name is Lee Sterling, 17 executive director of the American Property Rights 18 Association. 19 Most of our members . are owners owning 20 apartments of 20 families or less. 21 and rent stabilization is causing a destruction of 22 their property, a loss of their investments and chaos, 23 as owners of property 20 of families or less cannot 24 cope with the rent laws. 25 And rent control The legal expenses are so high it's ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 ridiculous to expect them to be able to maintain their 3 property with the kind of rent laws that even the City 4 Councilmen do not understand, the Assemblymen do not 5 understand, the Senators don't understand. 6 that lawyers, 90 percent of the lawyers don't even 7 understand these laws. 8 that are supposed to help them out and they don't. 262 We find They take money from landlords We find that there's a conspiracy in the 9 10 DHCR to destroy the landlords, to steal from them. 11 can prove the conspiracy. 12 when it comes to rent increases or rent controlled 13 apartments, they're very long in deciding and it takes 14 years before they grant an increase. 15 increase is not retrospective, the increase is 16 prospective only, and on that basis the landlord waits 17 three, four or five years before getting his rent 18 increase. 19 retroactive, it takes maybe two years or a year and a 20 half. 21 I I can show how they make Why? Because ' the While the rents stabilize, which is We also find that rents are reduced and 22 the landlord is not given an opportunity, for example, 23 if a tenant makes an application, putting 20 or 30 24 items of reduction and rents that they're complaining 25 about, reduction in services, and the landlord answers ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 and tak~s care of it and if 19 out of the 20 are taken 3 care of, the landlord is not told this within seven 4 days or ten days. 263 5 What happens is the rent office makes a 6 reduction in rent and therefore what is happening is 7 the tenants now know that what we can do is put 8 multiple applications, one right after another, and get 9 reduction after reduction after reduction. And it's 10 very fast in reducing, will let a landlord apply for 11 restoration of the rents, it can take years, this is 12 the problem. 13 And then they came out with a decis~on 14 that if you get a reduction you can't collect your 15 maximum based rents until you get the restoration. 16 I showed them and it took me two years to do, show it 17 to them you can't do that, it's not the law. So they 18 finally came out with an opinion it's only on essential 19 services, but on non-essential services decreased. 20 It's all right to collect the MBR's. 21 prospective. 22 doesn't count. 23 into. And But that's It's what they did retroactive that And this is the process that they go 24 Now who are they picking on? There are 25 thousands upon thousands of owners who owned buildings \ 1 COMMITTEE ON HOUSING AND BUILDINGS 2 way back in 1943. 3 II would be over that they would get back their 4 property rights, they would be free. 5 35 years of age. 6 old. 264 (~ 7 They were promised after World War They were maybe Now they're 85, 86, 87, 88 years Some of them were here but they had to 8 leave, they had to leave. 9 they couldn't take it. They wanted to speak but 10 Now let's look at maximum base rents, the 11 MBR's, you have to take care of so many procedures and 12 if you don't dot your "I" and cross your "T" you don't 13 get the increase. 14 controlled tenants aren't getting the seven and a half 15 percent every year. 16 they make it so difficult. 17 That's why most of your rent This is what's going on because Now they know what the MBR is, and why 18 don't they just give the seven and a half every year. 19 Why should the landlord go through this red tape? 20 must we pay legal expenses? 21 politicians don't care. 22 Why But no, nobody cares, the Now what's happening, for example, Mrs. 23 Torranto, she couldn't stay here, she had a reduction 24 in rent of $10 a month because a porch was taken away. 25 There never was a porch. The landlord had a canopy so ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 the rain would not go into the landlord's apartment. 3 But there was a picture the tenants showed, a picture, 4 according to the rent there was a porch. 5 Department says there couldn't be a porch, there's 6 nothing on the outside. 7 In other words, to prove it you have to have the 8 original plans. 9 Department. . 265 The Building The landlord has to prove it. The plans were lost by the Building Go get back the $10 a month. Meanwhile, CD ::e a: 0 u.. 10 the MBR rent increases have not been collected. :.:: (.) ~ (/) 11 Now we talk about the five percent vacancy a: w (/) :s 12 and 13 0 v 14 CHAIRPERSON SPIGNER: Mr. Sterling, will you please 0 ll) J, ll) N 15 MR. L. STERLING: The five percent 6 0 ~ c.. 16 vacancy, you can't expect a five percent vacancy. Do 17 you know what it means when one out of 20 apartments 18 are vacant? 19 percentage of the landlords who are losing their 20 buildings. :) 0 a: (!) >CD a: 0 (.) It means that you'll have a large w J: I- 21 You don't want a five percent vacancy. 22 It's asking for a ridiculous, arbitrary figure and it's 23 not logical in economics and real estate, and that's 24 what you put forth as the basis before you can be free 25 to the American way. 1 COMMITTEE ON HOUSING AND BUILDINGS · 266 (~ 2 3 Now you talk about the MBR and the guy who what should be in the Rent Guidelines Board, the 4 maximum based rent is based on the assessed evaluation 5 of 1970-71. 6 percent since then. 7 rearrange the MBR's so the owners are beset with rent 8 stabilized rents, which are not legal, they're 9 unconstitutional, they're phony, and this is what you 10 11 Assessed evaluation has gone up maybe 300 The thing is you're refusing to politicians are responsible for. Now you say you represent the tenants, you 12 represent the people. 13 Nazis said, that's what the Communists said, they 14 represent the _ people. 15 property in Russia. 16 property of the Jews. 17 the property from these people. 18 kind of conscience do you have? 19 That's what the Germans and the That's how they stole the That's how the Nazis stole the And that's how you're stealing You have nerve. What And then another thing I want to bring 20 out, who is it hurting? 21 minorities, they're buying buildings now. 22 sudden you're saying would they have an opportunity 23 what are they buying? 24 and they're ending up with nightmares. 25 The blacks, Spanish and All of a They thought they bought a dream The Greenpoint Savings Bank keeps ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 foreclosing on blacks and Spanish left and right. 3 sold them buildings and the rents were supposed to be 4 legal when they sold the buildings. 5 the rents are legal that were sold to these blacks and 6 Spanish, they were fooled. 7 buying and they're being fooled. 8 of a sudden they're finding they owe $50,000 out of the 9 clear blue sky. Why? .. · 267 They Not ten percent of And now the Chinese are All of a sudden, all Because the part owner was CD ~ a: 0 10 collecting rents which were not legal. LL :.:: u ~ 11 Now those rents with triple damages, a: w en :'.5 ~ 12 you're not doing ' anything about it. 13 to give hearings, the DHCR is supposed to give hearings 14 to these landlords when you have a rent overcharge. 15 They don't give any hearings. 16 on. 17 discussion and all of a sudden the landlord finds 18 triple damages. 19 landlord is rich, and this is what you people They're supposed 0 ll') .;, ll') C\I This is what is going 6 0 ~ ~ The landlord can't present his case. There's no Cl. ::i 0 a: Cl >CD a: 0 u Sure, the landlord is rich, every w J: I- You haven't done anything. 20 All these 21 years you haven't done anything to help out the 22 situation. 23 by God help out the owners. 24 Where's your conscience? You want to help out the tenants, fine, but And you haven't done it. \ 25 And he goes ahead and he says, well, these 1 COMMITTEE ON HOUSING AND BUILDINGS 2 buildings were lost because of the taxes, the taxes 3 have been too much. 4 much. 5 million and $500 million in real estate taxes every 6 single year, overcharge. 268 ( We know the taxes have been too The landlords are being overcharged between $350 That's what happening. But go ahead, these people, 20 families or 7 8 less, can they get their legal help to reduce their 9 taxes. We've been trying to help them out. Do you 10 want a solution to this? The solution is you've got to 11 bring it to the free market. 12 did. 13 Houston, Los Angeles, all of them, now they have a rent 14 control law. 15 that we have in Los Angeles. All the other cities They have less than one percent vacancy. We'll live with that rent control law Did you 16 CHAIRPERSON SPIGNER: 17 MR. L. STERLING: Would you wrap up. And the cases, they 18 don't give them the right cases because they hide the 19 papers. 20 Those are the wrong papers. 21 the Section 335 papers. 22 bring in the papers. 23 They made it so that you couldn't even read the papers 24 to fill out, and this is maliciously done. You would 25 be surprised what is going on in the DHCR. You're I heard a landlord ask about a case at DHCR. What do you mean? I says, They go ahead and finally they I said you can't even read it. 1 COMMITTEE ON HOUSING AND BUILDINGS 2 destroying people. ( - 269 In conclusion, I'm saying this. 3 When you 4 go and you were saying to Yeltsin, get the free 5 enterprise system, you're too slow, you've got to be 6 faster. 7 enterprise. 8 American, be American. 9 destroying people, because you are destroying people, Well, by God, you've got to do it here, free That's what we need, free enterprise. Be Stop discriminating, stop al :i; a: 0 u. 10 people are losing their lives, and I can prove it, how 11 people are dying. ~ (.') 0 I- en Do something. a: UJ ~ 12 13 0 ,,t 0 CHAIRPERSON SPIGNER: Sterling. You're done, sir. 14 MR. C. MARINO: Thank you, Mr. Thank you. My name is Charles Marino II) .;, II) N 15 of the staff of Assemblywoman Nettie Mayersohn. 0 0 'l' a.. 16 New York City is currently in the midst ::> 0 a: (!) > 17 of a housing crisis of tremendous proportions, and the 18 most disastrous part of the crisis is that affordable 19 housing is no longer available to low and middle income 20 New Yorkers. al a: 0 (.') UJ ::i:: I- 21 I get a great many phone calls on issues 22 important to my constituents, but the calls for 23 information on housing are the most desperate. 24 calls come from a wide range of groups 25 couples who are seeking decent, affordable housing to The from young ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 elderly residents living on fixed incomes. 3 housing is now out of the reach of hundreds of 4 thousands of New Yorkers. 270 Affordable There are currently a number of proposals 5 6 before the City Council which seek to weaken rent 7 regulations, including a proposal which would permit a 8 25 percent increase when rent stabilized apartments are 9 vacated. 10 These proposals are short-sighted and disastrously ill conceived. 11 Proponents of such changes believe that 12 weakening the regulations would benefit some landlords 13 who have complained of hard times, but the fact is that 14 by raising the rents 25 percent on vacant apartments, 15 in addition to the usual rent guidelines increases, we 16 will be removing large numbers of affordable apartments 17 from the rental market. 18 that we will lose those families that we need to keep 19 in New York City if we are to remain viable. The result of this action is By continuing to chip away at the stock of 20 21 affordable housing, we are driving more taxpayers out 22 of New York, eroding our tax base, harming our 23 businesses, and weakening the region's already ailing 24 economy. 25 hospitable to working and middle income families. It is in our own interest to keep this city 1 ( COMMITTEE ON HOUSING AND BUILDINGS 2 -- 271 Our top priority must be the preservation 3 of affordable housing. We are all familiar with the 4 rapid decline of other great American cities that lost 5 their taxpaying base as a result of similar ill 6 conceived policies. I strongly oppose the legislation which 7 8 would allow a 25 percent increase in rents of rent 9 stabilized apartments when they become vacant and any 10 other legislation that would weaken existing 11 regulations. 12 fending off the most vigorous assault on rent 13 regulations that I have seen since the start of the 14 program. In rejecting these proposals we will be 15 Thank you. 16 CHAIRPERSON SPIGNER: 17 MR. J. GERSTEN: 18 Gersten and I 19 statement. 21 My name is Jonathan just didn't come with any prepared CHAIRPERSON SPIGNER: 20 Jonathan Gersten. You can take three minutes then. 22 MR. J. GERSTEN: Thank you. 23 I would like to address the fact that 24 treating housing shortage with price controls does 25 nothing to increase the supply of housing. It's like ( 1 COMMITTEE ON HOUSING - AND BUILDINGS 2 treating cancer with aspirin. 3 today, my main impression of these proceedings is, 4 seeing the venomous bigotry of the tenants against the 5 housing providers, I have this depressing feeling that 6 despite your efforts and efforts of other people 7 working for constructive changes, I have this terrible 8 feeling nothing is going to come of it. 272 However, coming here It was what Paris must have been like at 9 m ~ a: 0 u. 10 the French Revolution, it's mob rule. 11 tenants than there are landlords. 12 city doesn't matter. There are more :.:: (..) 0 1(/) What's good for the a: w ~ 13 0 st 0 14 If your constituents want it, if -Stanley Michels' constituents want it, we'll give it to them. If Stanley, are you within earshot? .,, .;, .,, N 15 COUNCIL MEMBER MICHELS: 16 MR. J. GERSTEN: I'm with you. 6 0 "i' ~ a.. If your constituents :::i 0 a: Cl >m a: 0 (..) 17 wanted free heroin, you would give it to them to be 18 reelected. w J: I- CHAIRPERSON SPIGNER: 19 20 Thank you very much. 21 Karen Stamm. 22 MS. K. STAMM: Good evening. My name is 23 Karen Stamm, managing attorney of the East Side SRO 24 Services Project. 25 I also am a member of the tenants advisory committee to And relevant to today's discussion, ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 DHCR. . 273 As you many of you know, my office 3 4 represents tenants who live in SROs, rooming houses and 5 lodging houses on Manhattan's East Side. 6 preserve tenancies and the buildings in which those 7 tenants live. 8 lead for our office is between ten and 20,000 persons. We work to I would say that the potential client Every year we work with hundreds of people 9 CD ~ er 0 u. 10 in over 60 buildings. 11 control are what allow our clients to remain in their 12 homes. 13 against eviction and homelessness. Rent stabilization and rent :.:: 0 0 I- en er w en :'.5 0 They are our most important tool in defending 14 Over 90 percent of our clients receive st 0 "'J, "' "' 6 15 benefits of either $416 a month from public assistance 16 or $532 a month from Social Security. 17 seniors. 18 ever increasing rents, which I would say average around 19 $350 a month. 20 budget. 21 population. 0 "i' ~ Many of them are a. ::::> 0 er (!J ~ er 0 0 They are having great difficulty paying their w J: I- 22 And they're all living on a fixed Obviously, they're a very vulnerable Now, we've lost over a hundred thousand As a 23 SRO units in the city over the past decade. 24 result, HRA surveys have shown that one-third of single 25 adults in shelters gave an SRO as their last address. 1 COMMITTEE ON HOUSING AND BUILDINGS 2 The pressure on the tenants to vacate is continuing. 3 There are no replacement housing facilities for this 4 group of clients. 5 by harassment. 6 and the rent control laws must remain as they are to 7 protect the remaining SRO tenants. ( 8 9 274 Many of these tenants were displaced Therefore, the rent stabilization laws Now, one thing people haven't brought up that I want to stress is that rent regulation laws 10 protect against arbitrary rent increases and they also 11 protect against arbitrary evictions or evictions 12 without cause. 13 weakening such as vacancy decontrol in any form will 14 increase the landlord pressure to vacate, it will 15 increase harassment and homelessness. 16 I'll get to that in a minute. Any I can tell you that in past years there 17 have been approximately 2,500 harassment complaints 18 filed every year at DHCR, 2,500, approximately, every 19 year filed at DHCR. 20 And the reason I stressed before that the 21 other side of rent regulation, the protection against 22 arbitrary eviction is so important is that you can't 23 effectively enforce the protection against arbitrary 24 rent increases unless you have coupled with it the 25 protections against arbitrary evictions, otherwise it's ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 very easy for a landlord to get around it and simply 3 say I'm going to raise your rent a hundred dollars or 4 whatever I want, and if you don't go along with i t I 5 can evict you with without cause. 275 The laws are written with those two main 6 7 branches, not just one, and that's what which is 8 the caution I have about Resolution 146, which is in 9 effect I think an illusion, and I want to point out to 10 the Council that it is merely a resolution. 11 Council doesn't have the power to enact 146 and 12 therefore I think we're kidding ourselves if we say 13 that we have a SCRIE-type protection for low income 14 tenants if we adopt it in principle now. 15 to allow the city to go ahead and gut the rest of the 16 rent control law. 17 The That's enough It's a blind, we don't know what Albany 18 will do. 19 those vulnerable people out, and even if it were in 20 there it's not enough, for one reason, it doesn't deal 21 with arbitrary evictions, and the second which is I 22 think the rent ceiling is probably too low. 23 the ceiling would come out to around $10,000 income a 24 year. 25 To do one without the other is to cast all I think Let me point out that SCRIE is $16,500 a ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 year for an eligible person, so I believe that the 3 calculation underlying Resolution 146 is 4 insufficient. 276 As for the other bills, obviously we 5 6 support Resolution 144 and 215. 7 can only express the strongest disapproval and the 8 strongest caution. 9 appear to affect low income, with SRO dwellers it may And besides that, I Luxury decontrol, while it doesn't 10 at some time very soon do exactly that. 11 uncommon that some charge large sums a day even for a 12 small room. 13 It's not The 25 percent vacancy allowance is higher 14 than anything that the Rent Guidelines Board has ever 15 enacted for a rent stabilization vacancy increase. 16 caveats written into some of the vacancy decontrol 17 bills, such as we won't decontrol or destabilize those 18 units which were rented by harassment, I think is an 19 empty promise. 20 Let me point out why. The That's after the 21 fact determinations. 22 don't have the facilities to do that kind of 23 processing. 24 create that kind of burden on them simply won't work. DHCR has made clear today they Complaints take four and five years. \ 25 As for the small building owners, my To 1 COMMITTEE ON HOUSING AND BUILDINGS 2 rooming house clients are especially at risk and in 3 rooming houses particularly we find that buildings have 4 over-mortgaged their mortgage to over seven or eight 5 times getting rid of its rent regulated tenants. 6 don't think the city should be in the business of 7 rewarding unsound investment decisions. 8 means you take the risk. 277 (~ CHAIRPERSON SPIGNER: 9 MR. N. STRAPOLI: 10 11 I Speculation Natale Strapoli. I was named after my grandfather, my name is Natale Strapoli. 12 I'm not going to try to rehash what we've 13 heard tonight. 14 controlled tenant. 15 Housing Authority as a supervisor for 30 years and in 16 my 30 years with the Housing Authority I never had nor 17 were we ever thought to harass tenants. 18 Housing Authority we never harassed the tenants. I am a landlord. I have one rent I worked for the New York City With the It's apparent that the tenant has the 19 20 right to harass the landlord without the landlord 21 having any say in the matter. 22 about it. 23 burden upon the landlord to try to resolve the problem. 24 25 He can't do anything He must hire an attorney, which is another I have a tenant right now whose sister tells me that I am harassing her. I don't understand ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 this, she doesn't live in the apartment, she lives 3 someplace totally different. .... -278 - I'm going to go on because, like I said, 4 5 there's no use hashing this all over again. 6 the application with the hardship application, which I 7 filed myself with the DHCR back in 1993, I filed it, it 8 took me four months to go through this application that 9 was written on the basis As far as couldn't understand it, [Il ~ a:: 0 u. 10 half the information wasn't there. 11 put out in Mayor Lindsay's days and I don't even know 12 if it was the proper application. The application was :.: t) ien:? a:: w en :5 13 0 st 0 In any case, this application was so 14 confusing it took me four months because I couldn't 15 hire an attorney to do these papers for me because then 16 I would have wound up losing my home if I had to hire 17 an attorney to do this. ll) .;, ll) "' g ~ c.. ::, 0 a:: C, >a:: [Il 0 t) 18 Like I say, what's the use of my w :i: I- 19 continuing to tell you the same thing you've heard all 20 along. 21 the rent controlled and stabilized apartments then what 22 they should do is somehow or other give the landlord 23 the benefit, some benefit where they will be able to 24 retain these buildings. 25 I honestly believe if you're not going to have In plain English, gentlemen, I bought 1 COMMITTEE ON HOUSING AND BUILDINGS 2 this, 3 concerned, I worked for 30 years plus another five 4 years I put in private industry with rent controlled 5 buildings. 6 bought that building. 279 I knew everything so far as housing was I should have had my head examined when I But I'll tell you what I'll do. 7 If any of 8 the rent controlled tenants that are here wish to buy 9 my house, it's for sale, if you can put up with the 10 rent controlled tenants that I have to put up with. 11 Thank you very much. 12 One more thing. The affordable New York 13 State Tenants and Neighborhood Association 14 Coalition, excuse me, I'll accept that rent any time. 15 I ' l l accept · this rent of $475. 16 I ' l l take ten percent off that and I'll take it. 17 18 I'll tell you what, CHAIRPERSON SPIGNER: Thank you very much, sir. 19 Sophie Kashtan. 20 MS. S. KASHTAN: Good evening. I am 21 Sophie Kashtan and I represent the Joint Public Affairs 22 Committee for Older Adults, JPAC, a coalition of older 23 adult representatives from over 120 senior centers and 24 community groups throughout metropolitan New York. I ' 25 JPAC is vehemently opposed to any efforts ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 to weaken tenant protection, decontrol apartments or 3 otherwise dismantle our current system of rent 4 regulation. 5 concerns of older adults in New York City. 6 insufficient supply of affordable housing can threaten 7 the ability of an older American to maintain 8 independent living, especially the low to moderate 9 income elderly, given the overwhelming desire of the 280 Housing is one of the most pressing The CD ::E a: 0 10 elderly to remain in their homes and the high costs 11 associated with the institutional care available, and 12 affordable housing is essential for their quality of 13 life. IL x'. () ~ en a: LJ.J en ::s 0 14 Seniors citizens comprise over 60 percent CD a: 0 () LJ.J :i: 1-- 21 Like all tenants, the key problem is the 22 gap between income and rent, and as seniors age the 23 problem increases. 24 fastest growing segment of our population. 25 is comprised predominantly of women who live alone. The over 85 age group is the This group 1 ( COMMITTEE ON HOUSING AND BUILDINGS 2 281 These individuals are especially 3 vulnerable to loss of income and income sources due to 4 the death of spouses and the need for costly medical 5 and long term care services~ 6 people need the protection of regulation more than ever 7 so they have money left over after rent, food and 8 medications. As incomes decline, older We are shocked and dismayed by the 9 co ::E a: 0 u. 10 constant attacks from state and city officials which 11 place New York City's fragile housing situation in 12 jeopardy. 13 finally passed the State Legislature on rent 14 regulations. 15 leaders in Albany to advocate for many issues, 16 including rent regulation. ::.:: (.) 0 tii a: w (/) ~ 0 st 0 Last year JPAC fought against the bill that Two day ago JPAC and I met with state l() .;, l() C\I 6 0 ~ c.. ::, 0 a: Cl 17 And now I am before my city legislators >co a: 0 (.) 18 fighting another battle to protect the tenants of New 19 York City. 20 evidence enough that there is still the need for rent 21 regulations. 22 constant struggle for survival. 23 let's make these laws permanent so we can enjoy our 24 retirement years instead of schlepping, which means to 25 drag to City Hall in the rain. w J: I- The fact that a housing emergency exists is Senior citizens are tired of this Once and for all, 1 COMMITTEE ON HOUSING AND BUILDINGS 282 2 I urge you on behalf of JPAC to pass the 3 Stanley Michels bill, Intro 215, which would give the 4 seniors the security they deserve to live their lives 5 in dignity and no fear of losing their homes. 6 Thank you. 7 CHAIRPERSON SPIGNER: 8 Please identify yourself for the record. 9 MR. R. MARTIN: Richard Martin. My name is Richard Martin. 10 I am a rent controlled tenant and I'm also an owner of 11 another building. 12 I have not been able to get out of my rent 13 controlled apartment to move into the building that I 14 bought, which was my dream, because I have a lot of 15 money every year that I've owned the building, 13 16 years. 17 the highest lost was $48,000. 18 I've also no less than $25,000 each year and Now, I must run this building for the most 19 expensive apartment, I must provide the services and 20 the convenience and the comfort for the people who are 21 paying $800 a month or $850 a month. 22 are paying less get the benefit of that kind of service 23 and I must maintain i t or I would nev€r get another 24 tenant at that high rate nor would I keep them. The people who \ ' 25 I believe that rent control and rent 1 COMMITTEE ON HOUSING AND BUILDINGS 2 stabilization is absolutely necessary. 3 abandon, 4 don't want tenants to be unconscionably given high 5 rents. 6 mine who have not had a rent increase in some time 7 because they've hit what I consider to be the maximum 8 that I can charge them. ( 283 I don't want to I don't want tenants to be harassed, and I As a matter of fact, there are five tenants of As a matter of fact, there was one woman 9 10 whose rent was reduced and she found a tenant for 11 another apartment and I reduced her rent again. 12 I wonder why I have an obligation for the ' 13 people who come off the streets who I don't know before 14 when I owe so much money that I can't answer my phone 15 because of the bill collectors and yet the tenants have 16 not suffered in any of this time. 17 good, clean apartment, they have plenty of heat. 18 have not had one violation on the building, and I have 19 not for years. 20 me or against any tenants. The tenants have a I I have had no legal suits pending again I have no vacancy. I have lived by the regulations and I lose 21 All I want is a chance. I want to apply for a 22 money. 23 hardship because a hardship would require a hardship 24 for every tenant in the building and there are already 25 some people who are paying as much as they can. The .. 284 · 1 COMMITTEE ON HOUSING AND - BUILDINGS 2 five apartments that have reached their maximum, 3 representing about 40 percent of their income, how can 4 I in justice give them an increase? What I only ask for is that when people 5 6 with low rent move out of their own free will that I be 7 able to replace them at market rents. 8 doesn't seem to be too much to ask. 9 my obligations. That's not, I've taken care of CD :. a: 0 u. I had a rent controlled tenant who hadn't 10 ~ (..) ~ 11 allowed anyone into the apartment since 1963 when her 12 husband passed away. 13 apartment, paid for her hotel while we were doing it, I 14 paid for her meals during that time, and I did not 15 increase her rent. 16 to take care of her. 17 fairness. 18 a vacancy you permit only the five percent which you 19 permit now, when a tenant moves out you are lucky if 20 you only miss rent for two months. rJ) a: w rJ) ::s 0 I spent $30,000 fixing up her ~ 0 "'J, "'"'6 She's an elderly citizen, I wanted 0 ~ ~ I'm only asking for some a.. ::, 0 a: (!) >CD a: 0 (..) With someone who gets let's say that in w :I: I- 21 By the time the tenants have planned to Then it 22 leave they usually stop paying their rent. 23 takes a month or two to fix the apartment up and find 24 someone new for it. 25 enough to get a new tenant in two months, with only But let's say that you're lucky 1 COMMITTEE ON HOUSING AND BUILDINGS 2 two months loss of rent. 3 your rent takes three years and four to just get back 4 the two months that you've loss. ... 285 A five percent increase in If you take action to put a tenant out, it 5 6 takes you so long to put a tenant out now I have 7 not put out a tenant in a long time and I would be 8 happy to talk about this but there isn't time. 9 somebody out you lose rent for many, many months. To get How ID ::e a: 0 u.. 10 much of an increase can you get to make up for that? 11 There's no incentive to get somebody out. 12 get an increase that makes up for the time that you 13 lose ~ () 1? You can't (/) a: w (/) ~ 0 st 0 14 CHAIRPERSON SPIGNER: Your point, sir, is I.I) .;, I.I) (\J 15 well made. I understand your frustration. 6 0 "i' 16 MR. R. MARTIN: All right, let me just [l_ ::::> 0 a: Cl 17 say two little things. I think you should make 18 regulations for the honest landlord and make other 19 separate punitive laws for those that are dishonest. fii a: 0 () w I I- ) 20 You should not assume that everybody is dishonest. If 21 a tenant is willing to come into one of my apartments 22 and pay $600, are they any less valuable for the city 23 than someone who can pay $300? 24 apartments are filled and the people are happy, I think 25 I'm providing a service and I think that's what's As long as my 1 COMMITTEE ON HOUSING AND BUILDINGS 2 happening. 286 ( ~ 3 Thank you. 4 CHAIRPERSON SPIGNER: 5 Kenneth Rosenfeld. 6 MR. K. ROSENFELD: 7 Chairman. 8 the opportunity to speak. 9 Thank you very much. Thank you, Mr. I know it's been a long day and I appreciate My name is Kenneth Rosenfeld, the director 10 of legal services for North Manhattan Improvement 11 Corporation, which provides free housing legal services 12 to residents of Washington Heights and Inwood. 13 also a tenant member of the Rent Guidelines Board and I 14 can appreciate what you're going through since as a 15 member of the Rent Guidelines Board we go through 16 something similar when we listen to testimony, so I 17 will be brief. 18 I am In this world of landlords, tenants and 19 allegations about rent control, and who's the minority 20 and who's the majority and who's being hurt and who 21 isn't, it's almost like entering Alice in Wonderland. 22 I hear people who are making an awful lot of money off 23 tenants, and I'm talking about the 12 percent of all 24 the landlords who own 71 percent of all the rental 25 properties being represented here by the RSA and ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 complaining that they're not getting enough money. 3 the list of famous landlords in that group is well 4 known to all of us. 287 And I hear that the rent stabilization code 5 6 and law do not benefit landlords yet they are assured 7 every year of increases to cover their costs. 8 complaining about vacancy rates, and I understand there 9 are proposals before the committee about vacancy rates They're 10 and eliminating them or limiting them at certain 11 rates. 12 I must point out that last year's Rent 13 Guidelines Board, the vacancy rates that were passed at 14 that time was a landlords' representative proposal 15 which was passed over the objections of the tenants' 16 representatives. 17 There is 18 turned inside out and upside down. 19 line is you can't get blood from a stone, and the stone 20 is the tenant population of this city. 21 vacancy decontrol, you can ~ay 25 percent increases on 22 vacancy. 23 apartments if you try to charge those rates. 24 25 I feel like we're getting I think the bottom You could say My question is who is moving into those We've had the experience of vacancy decontrol in this city, and I would like to point out 1 COMMITTEE ON HOUSING AND BUILDINGS 288 2 that the '70s was not the first time. 3 World War I it was the first time New York City 4 experimented with rent control and it lasted until 1928 5 and it was withdrawn in 1928. 6 market crash and the beginning of the Great 7 Depression. 8 correlative. Right after In 1929 we had the stock I won't argue that they were exactly The next time we tried it it was in the 9 10 early '70s when we found out we had to extend rent 11 stabilization to all of the apartments that had been 12 decontrolled. 13 be crushed. 14 tenants make 10,000 a year. 15 25 percent are on the qualified poverty level and can 16 qualify for public assistance. 17 It will happen here again. Tenants will And the poor tenants, 63 percent of the We've already heard that Landlords are able to finance an 18 incredible campaign to apply misinformation to this 19 process for a small minority. 20 people have incredible influence over this city and the 21 state, and instead of revising the rent stabilization 22 and rent control laws to make them work better, we see 23 an effort to chip away at them. Twenty-five thousand 24 And I submit to you that the communities 25 that will suffer the most under any reduction are not ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 the wealthier communities in the city, they are the 3 poor communities of the city. 4 attempting to pay who are on public assistance, 5 attempting to pay rents of eight and $900 a month, 6 doubled, tripled up. 289 I already have clients Washington Heights is well known for that, 7 8 a large immigrant population, a large poor population, 9 and whoever their landlords are, whether they be white, ClJ ::;; a: 0 10 black, brown, Latino, those people, the tenants cannot 11 afford those rents. 12 on those people by encouraging vacancy rate increases 13 of 25 percent, they are already so vulnerable, they · 14 will be out of their apartments. lL :.:: (.) 0 t- en a: w en :5 ..,. 0 And if we allow increased pressure 0 LO ,;, LO N 0 0 "? c.. 15 We do not want the shelter populations of 16 this city increasing, we do not want the homeless 17 population of this city increasing, and I think for 18 very good reasons, both the Mayor and the 19 administration, the Governor, Council Speaker Peter 20 Vallone, according to today's New York Times, has 21 considered a continuance of the rent control laws. 22 I wholeheartedly support those on the Council who 23 support that. ::::, 0 a: C!) >CJ a: 0 (.) w J: I- 24 Thank you. 25 CHAIRPERSON SPIGNER: And Thank you very much. 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 Andrew Hoffman. 3 MR. A. HOFFMAN: 4 good afternoon Good morning nope; Good evening. COUNCIL MEMBER MICHELS: 5 6 nope. 290 It's an eclipse. 7 MR. A. HOFFMAN: My name is Andrew 8 Hoffman, president of CHIP. I'm also the 9 owner-operator of about 2,000 rent stabilized or rent CD ~ a: 0 u.. 10 controlled apartments in the city. 11 approximately 15 hundred units for other people. 12 the third generation owner of residential real estate 13 in this city. 14 generation. 15 manage the family properties. I also manage ::.:: 0 0 1- (/) I'm a: w (/) 5 0 I am one of 21 grandchildren of my I'm the only one who is willing to try to v 0 lO .;, lO N 6 0 "i' 16 I don't know of any college graduates who 0.. :::, 0 a: "a:>- 17 would go into my business. 18 make more money in any other business with little or no 19 risk associated with the same risk associated with 20 owning residential real estate. Why should they? They can CD 0 0 w :I: I- ' 21 Over the past couple of years, the biggest 22 aspect of my business that has increased is the outside 23 fee, managed, out-management. 24 different people. 25 co-ops, and I manage for a lot of elderly owners who I manage for a lot of I manage for banks, I manage for 1 COMMITTEE ON HOUSING AND BUILDINGS 2 can no longer manage their own properties because of 3 the burdensome rent regulations. -- 291 One such building I manage is on West 20th 4 5 Street between Eighth and Ninth Avenues. 6 walk-up owned by a 7 I've been here too long. 8 regulations, low rents, they lost a couple of MBR's 9 based on just bad paperwork. It's 15 story 15 unit building, I'm sorry This building is plagued by We had take money out of 10 a woman's pocket every month just to provide heat and 11 hot water and spending services for the building. 12 because I'm a professional manager and able to deal 13 with the paperwork, I was able to get her MBR back. 14 was just about able to have her break even in this 15 apartment where rent averages $250, in Manhattan, a 16 beautiful building. 17 Just I Thirty years ago when her husband arrived 18 this family was able to make some sort of living off 19 this building and a couple of other buildings. 20 longer. This woman wants to sell this building but she 21 cannot. She wants to go out of business but she can't. 22 She wants to retire but she can't. 23 No She is going to die and this building is 24 going to die with her. This building is completely 25 unsalable due to the rent regulations that are in \ - ( - ~------------~ 1 COMMITTEE ON HOUSING AND BUILDINGS 2 effect. 3 purchase this building is not competitive. 4 as simple as a treasury bill, you buy a treasury bill 5 instead, the return on investment would be much greater 6 with little or no risk. . 292 The return on the investment if somebody would Something I've managed this building for two years. 7 8 I know the way this building operates, I can figure out 9 better than anybody how to make this building better. Ill ::;; a: 0 u. 10 I wouldn't buy this building. 11 this building from her with no money down and she would 12 give me the paper. She's wanted me to buy lo<:'. (.) ~ (f) a: w (f) :'.'5 13 a It's not worth the risk. I manage buildings for a lot of different 14 people, for banks, because a lot of people have gone 15 out and given the buildings back to the bank on 16 foreclosures. 17 in receivership buildings that are in the process of 18 being foreclosed on. 19 foreign companies who some six or eights years wanted 20 to own a piece of America. 21 what a piece of America they have and they are stuck 22 with these bad investments. '- Ill a: 0 (.) I manage some buildings for some w :I: I- 23 Now they're discovering I manage for a lot of small owners who 24 cannot deal with the regulations involved in running 25 their property. And now I'm managing a lot of co-ops, ( 1 COMMITTEE ON HOUSING AND . BUILDINGS 2 which was the only outlet for owners years ago to get 3 out of the business. 4 that were not heavily leveraged that the stabilized 5 rent, another would come close to the maintenance, are 6 left with an extreme shortfall. ... 293 I've been dealing with buildings These are buildings that are breaking 7 8 even. 9 expenses. They raise their maintenance just to cover their I have buildings with shortfalls. These CD :::; a: 0 u.. 10 people aren't greedy landlords making profits. !i<: () ~ en It's time to start a rational system, a 11 a: UJ en ~ 0 st 0 12 rational system of phasing out the regulations. 13 rent reform that Albany recently enacted was a start 14 but i t was only a symbol. 15 nothing. 16 thousand units that are going to be decontrolled. 17 need, the system needs more tax dollars. 18 accomplish that today. The It really accomplished It) ,;, It) "'6 I believe the figure out there is a couple of 0 ~ ~ a.. We :J 0 a: C!) You all can >CD a: 0 () UJ I I- 19 Thank you very much. 20 CHAIRPERSON SPIGNER: 21 Judith Goldiner, the Legal Aid Society, 22 23 Thank you. and Adriene Holder. MS. J. GOLDINER: My name is Judith 24 Goldiner from the Legal Aid Society and with me is 25 Adriene Holder from our Harlem office and our ( 1 COMMITTEE ON HOUSING AND BUILDINGS 294 2 representative from our Staten Island office. Today I'm here to speak in favor of the 3 4 proposed Local Law 215 and Resolution Nos. 144 and 146 5 and I'm here to speak in opposition to Local Law Nos. 6 207, 208, 217, 219, 220, 227 and 228. The proposed weakening of the rent 7 8 stabilization law would have a disastrous effect on low 9 income families and would increase homelessness because 10 it would result in increased rent levels. 11 City Council to renew the rent stabilization law 12 without further weakening of its critical tenant 13 protections. 14 We urge the Our clients are desperately poor. They 15 are individuals and families close to and in many cases 16 well below the federal poverty level. 17 for representation by the Legal Aid Society, a single 18 individual's annual income in most cases cannot exceed 19 $8,713; a family of four in most cases cannot have a 20 combined income greater than $17,938. 21 clients work at minimum wage jobs, but for others their 22 only source of income is public assistance. 23 To be eligible Some of our Since there are very few rent stabilized 24 apartments available at rents within the welfare 25 shelter guidelines or at levels that someone earning ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 the minimum wage can afford, low income persons who are 3 evicted are at great risk of becoming homeless. 4 295 For example, the Department of Social 5 Services provides only $312 per month for rent to a 6 mother with three children on public assistance. 7 nearly impossible for families to rent apartments at 8 that rent level, or even at a level that could be paid 9 if they used most of their food money for rent, as many It is CD ~ a: 0 u. 10 of our clients do. :.:: (.) 0 I- C/) 11 Elderly people on fixed incomes are a: w ~ a. ::, 0 a: Cl >CD a: 0 (.) 12 similarly caught in a bind between escalating rent 13 increases and paying for food, gas and electricity. 14 Many go hungry so that they can pay the rent and ensure 15 themselves a place to live. 16 Most of the clients served by the civil 17 division are one step away from becoming homeless due 18 to rent increases. 19 choices between eating and paying their rent. 20 become homeless, they have difficulty escaping the 21 shelter system because the rents remain above their 22 ability to pay. They are forced to make cruel w J: I- 23 If they To house a family in emergency shelter 24 because there is no affordable permanent housing 25 available for them, the city typically spends public 296 , 1 COMMITTEE ON HOUSING AND BUILDINGS 2 funds of approximately $3,000 per month. 3 families spend an average of six months in the 4 emergency shelter system, which could easily cost the 5 city $18,000 per family. 6 languish in the city's shelter system for more than six 7 months at a cost to the city of $36,000 annually per 8 family. 9 Homeless More than 2,400 families The quality of housing units affordable to 10 low income people is rapidly diminishing. 11 the city's rental market has hovered at a citywide 12 vacancy rate of four percent. 13 however, the vacancy rate was only 1.6 percent. 14 Cooperative conversion and warehousing of 94,000 15 habitable apartments, as estimated by Professor Michael 16 Stegman in the 1991 city Housing and Vacancy Survey, 17 have further reduced the supply of affordable rent 18 stabilized apartments in New York City. 19 For years, At low rent levels, The city 1991 Housing and Vacancy Survey 20 shows that low income rent stabilized tenants' 21 disposable income decreased by seven to 15 percent for 22 the period 1987 to 1991. 23 number of tenants who were severely overcrowded and who 24 were doubled up also increased. 25 in rent stabilized apartments rose by 85 percent During the same period, the Rents during the 1980s ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 substantially more than the rate of inflation. 3 Proposed Resolution No. - 297 146 urges the 4 State Legislature to enact a program modeled after the 5 Senior Citizen Rent Increase Exemption which would 6 shield low income households from rent increases. 7 a program would help poor tenants who are currently in 8 affordable apartments to continue to be able to afford 9 their apartments despite annual increases and major Such 10 capital improvement, MCI, increases. 11 families and individuals are being forced out of their 12 apartments as they become less and less affordable on a 13 limited income. 14 Currently, poor As detailed below, each of the proposed 15 local laws would result in a drastic weakening of the 16 rent stabilization laws. 17 the emergency circumstances which resulted in the 18 enactment of the tenant protection laws in the first 19 place. 20 There has been no change in In New York City, there is still an 21 extremely low vacancy rate and an even lower vacancy 22 rate for apartments at affordable levels. 23 the current protections, our clients cannot find 24 affordable apartments. 25 would be less and less likely to obtain affordable Even with With deregulation, our clients r· 1 COMMITTEE ON HOUSING AND BUILDINGS 2 housing. 3 298 The city simply cannot afford the increase 4 in homelessness that deregulation would cause. Already 5 the city is spending $500 million per year in homeless 6 services for families and individuals. 7 would skyrocket with deregulation. That amount 8 Proposed Local Law No. 207. 9 Proposed Local Law No. 207 would exempt 10 all apartments which become vacant after the effective 11 date of the proposed local law from the protection of 12 the rent stabilization law. 13 the rent stabilization laws, rents would be raised to a 14 level poor people could simply not afford. 15 rents have increased to a level that most poor families 16 and elderly people can barely afford. 17 Without the protection of Already With decontrol, there will be no limit on 18 the amount of rent a landlord can charge. 19 recent turnaround in the real estate market, there is 20 simply no justification to allow landlords to simply 21 charge any amount of rent that they choose. With the In addition, without rent stabilization 22 23 protection, a landlord can evict a tenant for any 24 reason. 25 i.e., a good reason, to evict a tenant. A landlord would no longer have to show cause, He could evict ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 a tenant for any reason or no reason. 299 Additionally, the rent stabilization code 3 4 forbids a landlord from reducing required services. 5 Vacancy decontrol would mean that a landlord could fail 6 to maintain required services, raise rents to 7 unacceptably high levels and evict tenants for no 8 reason. 9 The experience of civil division attorneys ID :le a: 0 u. 10 in Brooklyn Housing Court is that the protections of 11 the rent stabilization law often prevent poor people 12 from being homeless. 13 protected by the rent stabilization law, we can obtain 14 needed and necessary repairs. 15 apartments, we often cannot secure repairs because our 16 clients are too frightened of eviction to pursue their 17 defenses since they believe that the landlord will 18 punish them if they pursue repairs. ~ (.) i?rJ> a: w rJ> ~ 0 st 0 In addition, because they are In unregulated It) ,;, It) "'6 0 ~ Q. ::> 0 a: (!) >ID a: 0 (.) w I I- Vacancy decontrol will force more families 19 20 and elderly people onto the streets and into the 21 shelters. 22 tenants would be unable to move from their apartments 23 24 25 Moreover, the few remaining rent stabilized no matter how bad the conditions in their apartments became or how bad the neighborhood became because they would never be able to afford another r· 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 apartment. 300 . 3 Proposed Local Law Nos. 208 and 217. 4 Proposed Local Law 208 suffers from the 5 same flaw as Proposed Local Law 207. The provision 6 allowing vacancy decontrol only for buildings under 20 7 units does not ameliorate the catastrophic effect of 8 vacancy decontrol on low income tenants. 9 low income people live in buildings of 20 units or Since many 10 fewer, vacancy decontrol in these buildings will 11 further increase homelessness and its related costs. 12 Similarly, Proposed Local Law No. 217 13 would exclude from the rent stabilization law vacancies 14 in apartments renting for more than $900 per month. 15 our experience in Brooklyn, for example, many of our 16 clients live in apartments renting for more than $900 17 per month. 18 in roommates or sharing with other family members. 19 In They can only afford such rents by taking According to city statistics, there are 20 134,000 units which rent for over $900 per month. 21 Losing that many apartments would radically reduce the 22 housing opportunities renters have. 23 In the experience of our Harlem office, it 24 is not unusual to find poor tenants paying rents that 25 may be considered luxury rents. Through guidelines ~------- ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 increases, vacancy and MCI increases, landlords have 3 managed to restructure rents for vacant apartments in 4 Harlem to double or triple their prior levels. 301 Initially, landlords may have intended to 5 6 rent these high rent apartments to higher income 7 tenants. 8 higher income tenants. 9 apartments to higher income tenants, the apartments are However, they are often unable to attract Th~s, instead of renting the co ~ a: 0 u. 10 often rented to extended families or doubled up 11 households. :.:: (..) ~ (/) a: w (/) :s 0 st 0 12 Frequently, several generations live 13 together in a rent stabilized apartment because that is 14 the only way they can a}ford the rent. 15 extended families, it is not unusual to find several 16 persons working at low wage jobs to keep an apartment 17 renting at $900 or above. 18 income together to pay the rent. In such It) J, It) N g "? a. ::i 0 a: Cl >co a: 0 (.) These families pool their w J: r 19 Throughout the city, we represent formerly 20 middle class tenants who have lost their jobs during 21 the recession who take in roommates in order to 22 continue remaining in their neighborhoods whose rents 23 are at high levels. 24 25 Clearly, higher rents do not necessarily represent luxury rents and decontrol of these units ( ' 1 COMMITTEE ON HOUSING AND BUILDINGS 2 would harm low income tenants. 302 3 Lastly, allowing vacancy decontrol for 4 rents of $900 or more leaves a landlord with a huge 5 loophole. 6 put in sufficient one-fortieth individual apartment 7 improvements to raise the rent to $900 and then declare 8 i t decontrolled. 9 every apartment which becomes vacant, no matter how 10 With every vacancy, a landlord can merely Under Proposed Local Law No. 217, formerly affordable, would then become decontrolled. 11 Proposed Local Law Nos. 227 and 228. 12 Proposed Local Law Nos. 227 and 228 would 13 increase the vacancy allowance when rent stabilized 14 apartments become vacant to 25 percent over the former 15 rent. 16 less and less affordable. 17 numbers of low income people 'who simply cannot afford 18 their apartments and are forced into the homeless 19 system at great cost to the city. This would have the effect of making apartments Such a policy increases the Moreover, there is no justification for 20 As "Rent Stabilized Housing in New 21 such an increase. 22 York City: 23 Research," 1993, makes clear, the Rent Stabilization 24 Guidelines Board increases more than guarantee 25 landlords a reasonable rate of return and have exceeded A Summary of Rent Guidelines Board ( 1 COMMITTEE ON HOUSING . AND BUILDINGS 2 inflation every year. - 303 The one-fortieth individual apartment 3 4 improvements give a landlord an opportunity to raise 5 the rent during the vacancy if improvements are made to 6 an apartment. 7 income tenants in Brooklyn is that almost every vacancy 8 results in a substantial increase due to alleged 9 one-fortieth increases, so that the increases almost Our experience in representing low 10 always result in a more than 25 percent increase over 11 the former rent. 12 Indeed, the city Housing and Vacancy 13 Survey shows that rents for vacant apartments on 14 average increased by 42 percent from 1987 to 1991. 15 Thus, a 25 percent vacancy increase would give 16 landlords an unjustified windfall and cause more poor 17 tenants to be pushed onto the street. 18 In addition, should the city wish to aid 19 small landlords, the city could do so by offering tax 20 abatements and low income loans to maintain the 21 premises. 22 merely serve to make it more and more difficult for low 23 income tenants to find affordable housing. 24 25 To raise vacancy rents by 25 percent will Moreover, the rent stabilization law already has a procedure to raise rents if a landlord --------- ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 can show a rent hardship. 3 can avail themselves of the already existing 4 procedure. 304 Small (or large) landlords The proposal will also increase landlord 5 6 harassment of tenants because the gain to landlords of 7 forcing tenants out is so great. 8 landlord harassment is greater in small buildings. In our experience, Lastly, the proposal is not tailored to 9 CD ::;; a: 0 u.. 10 help only small landlords. 11 management companies own buildings with 20 units or 12 fewer. Many large landlords and :.:: u ~ en a: w en ~ 13 ....aa CHAIRPERSON SPIGNER: You've heard some 14 very harsh tales of landlords' inability to maintain 15 their property. 16 statements at all? I() .;, I() (\j Do you give any credibility to those 6 -~ Cl. :, 0 a: (!) 17 MS. J. GOLDINER: That has not been my >CD a: 0 u 18 experience in Brooklyn and it has not been our 19 experience in Staten Island or in the Harlem office. 20 What I see is rent overcharging, rent gouging and 21 landlord harassment of tenants. w :x: I- 22 23 CHAIRPERSON SPIGNER: Thank you very much for your time. 24 Marcy Boucher. 25 MS. M. BOUCHER: First, I must commend ( 1 COMMITTEE ON HOUSING AND BUILDINGS . 2 your stenographer for having been here all day along 3 with the rest of us who sat here and I must say I'm not 4 too commending of the Council Members who should be 5 here that we've been preparing and are not getting paid 6 to be here. 7 Council Members cannot be here for their own members' 8 meeting. I think it's deplorable that our own CHAIRPERSON SPIGNER: 9 305 Who is yours? 10 MS. M. BOUCHER: 11 I really feel I'm a small owner. Tom Duane. I've 12 also been a tenant and a tenant leader for three 13 buildings so I know it from both sides. 14 that I had much more rights as a small tenant than I do 15 as a landlord. 16 17 CHAIRPERSON SPIGNER: I tell you You just heard the previous speakers describe demonized landlords. MS. M. BOUCHER: 18 I know, I've definitely 19 heard. 20 sides and I think that should be duly noted. 21 don't think that you should assume that all landlords 22 are bad either and what I really find deplorable 23 Like I said, there are good and bad on both CHAIRPERSON SPIGNER: But I I don't think all 24 Council Members feel that way. 25 opinions coming from this side of the table. There is a diversity of I I 1 COMMITTEE ON . HOUSING AND BUILDINGS . 2 MS. M. BOUCHER: .306 What I would like to do 3 is stress several things. 4 things that a landlord couldn't do. 5 in my building, I have. been spit on, shoved up against 6 the wall, told not to come out at night because I would 7 be hurt. 8 brace, all by the same tenant. I find there's a lot of As a small owner I've had my super three months in a neck And I cannot have them arrested. 9 They !D :. cc 0 10 illegally moved into the building and so because they 11 had the key even though their name wasn't on the lease, 12 even though the lease was not good for a number of 13 years, they got in and lL )<:'. u 0 f- C/) cc w ~ 0 st 0 lO J, lO C\J 6 0 "i> a. 14 CHAIRPERSON SPIGNER: Ms. Boucher, if you 15 would contact our counsel, Mr. Baronci, I'm certain he 16 will refer you to some agency or some service where you 17 can get some relief. ::::, 0 cc C!l ~ cc 0 u 18 MS. M. BOUCHER: I'm on record so it is so w ::c: f- 19 stated. In addition to that, there are other 20 21 things. 22 There are tenants that do catering in their apartment, 23 that are against the vending laws of New York City, but 24 if I report them that's considered harassment. 25 I can't file harassment against tenants. I have tenants that have had a dog in the ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 building with nobody there that defecates and the 3 police are called and I eventually backed them up with 4 the Humane Society, but I got charged for harassment. 307 I've been charged with criminal harassment 5 6 for saying that, various things about me, saying that 7 when I have several ethnic groups in my building. 8 employ several black persons. 9 ethnic groups. I I also help out other I am in the process of helping out the 10 homeless. 11 against drugs. 12 a good and responsible community person. I have worked with neighborhood agencies 13 I've planted trees and I'm trying to be I don't care who or what ethic background 14 my tenants are as long as they are responsible. 15 However, 16 have never paid me rent. 17 penny of my disability money has gone into my building 18 of which I am in rem, getting ready to lose my 19 building. I have people in my building since 1985 that I am on disability and every I can't get the low cost loans or the 20 21 windfall programs because my tenants will not fill the 22 forms for me. 23 things with the agency that I can't get. 24 thing I do have is that if I get a vacancy I might be 25 able to get my rent which, by the way, went from 150, There are a lot of things with various The only ( 1 COMMITTEE ON HOUSING AND - BUILDINGS 2 210, 215, if I could get a vacancy, I might be able to 3 get a market level rent 4 CHAIRPERSON SPIGNER: 5 MS. M. BOUCHER: 6 CHAIRPERSON SPIGNER: 7 10 You mean That's a month. How large an apartment? MS. M. BOUCHER: 8 9 308 apartment. It is a one bedroom All my apartments are the same, one bedroom apartments. 11 Why shouldn't I buy a building? Why 12 shouldn't I have the American dream? 13 as a tenant be able to think you could go and buy a 14 building and live there peacefully with your family and 15 be able to collect rents and hopefully break even if 16 it's only five to ten percent? 17 you deserve it then why are you living in the United 18 States? 19 20 21 Why shouldn't you If you don't think that CHAIRPERSON SPIGNER: We've heard your testimony. MS. M. BOUCHER: What I'm concerned with 22 in the City of New York is crumbling. I was a flight 23 attendant with American Airlines and I flew to Detroit 24 and I see everything in this great city that I saw 25 happening in Detroit. Whether it's the crime, ( 1 COMMITTEE ON HOUSING AND BUILDINGS - 2 abandonment, the constant bickering, knowing nobody 3 wants to get along, and that city crumbled. - . 309 I don't want to see this great city 4 5 crumble. 6 against one another, nobody is trying to come up with a 7 solution. 8 want to have a rent where I can sustain my building to 9 provide good service to the tenants I do have. What I hear is that everybody is so much When I say I want a vacancy increase, I just You're Ill ::\? a: 0 u.. 10 not going to the tax roll for the city to 11 whole city is going to crumble and I think that the 12 City Council Members or any of the government should 13 have stopped with some bureaucracy or start with trying 14 to help our great city. the la::: (.) 0 !ii a: UJ ~ 0 ' a. :::> 0 a: (!J 16 Ms. Boucher. Thank you for your testimony. 17 Jenny Laurie. 18 MS. J. LAURIE: >- Ill a: 0 (.) My name is Jenny Laurie, UJ I I- 19 20 the director of the Met Council on Housing. Met Council supports the passage of Intro 21 215 and Resolution 144 which would renew the rent 22 stabilization law and continue rent control without any 23 weakening amendments. 24 other bills which have been submitted to this committee 25 for consideration. Met Council opposes all of the The other seven bills on the list ( 1 COMMITTEE ON HOUSING AND BUILDINGS . 2 would enact some form of deregulation. 3 had enough of deregulation, with the luxury decontrol 4 and gutting of the registration system that last 5 summer's state legislative changes brought. 310 Tenants have The rent regulations are vital to the 2.5 6 7 million people who live in regulated apartments in this 8 city. 9 precipitous rent hikes; they guarantee tenure or lease The rent laws protect tenants from unforeseen, [ll ~ a:: 0 10 renewals; allow evictions only for good cause; and 11 allow tenants recourse where landlords are not 12 providing services or repairs. LL. :.:: (.) 0 r a:: (f) w (f) ~ 0 13 The laws provide an even playing field for 14 tenants in a housing market that has extreme shortages. 15 The system is not a subsidy, like Section 8, but simply 16 limits the amount of profit the owners are allowed to 17 collect. ST 0 "' .;, "'"' 6 0 ~ ~ a.. :::) 0 a:: C!l >[ll a:: 0 (.) 18 The recently released Housing and Vacancy w :r: r 19 Survey report to the City Council shows that the rent 20 laws could be stronger, not weaker, as all your 21 proposals would have. 22 below the poverty level increased from 26.8 percent in 23 1990 to 29.9 percent in 1992. 24 overall suffered a decrease in income between surveys 25 of 12.3 percent adjusted for inflation. Renter households with incomes Renter households \... And the median ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 gross rent-to-income ratio (the percentage of total 3 income spent for rent and utilities) 4 percent to 30.7 percent. 5 -311 rose from 28.4 I would like to address myself to Intro 6 227 and 288, bills which would affect many of Met 7 Council's members. 8 committee express a concern for the small owners, who 9 we feel are in imminent danger of losing their 10 11 I have heard the Chairman of this buildings in tax foreclosures. Focusing for a minute on the smaller 12 buildings in low income neighborhoods, which is where 13 these endangered buildings are, I would argue that the 14 tenants in these buildings are as vulnerable as their 15 owners; more, in fact, because unlike the owners, they 16 have no assets. 17 Vacancy allowances promulgated by the Rent 18 Guidelines Board, much lower than the proposed 25 19 percent in Intros 227 and 228, have done much damage to 20 the affordable rental housing stock. 21 states that the portion of low rent units declined 22 considerably between 1991 and 1993, even after 23 adjusting for inflation. 24 proportion of units with gross rents less than $400 a 25 month decreased from 26.2 percent to 24.4 percent of The HVS report In March 1993 dollars, the 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 occupied renter units. - 312 (~ In addition, the figures for asking rents 3 4 are dismal. 5 for $300 to $399 is one percent; for apartments renting 6 for $400 to $499, the vacancy rate is 1.68 percent 7 (Table 5, U.S. Bureau of the Census, 1993 New York City 8 Housing and Vacancy Survey). 9 The vacancy rate for apartments renting Past HVS figures have shown that low 10 income people move the most compared to higher income 11 people, and so these units are the most affected by 12 vacancy allowances. 13 tremendous skewing that we see in rents so that the 14 same sized apartments in one building can have widely 15 different rents. 16 small buildings would aggravate the intense competition 17 for vacant apartments and would encourage harassment. 18 These allowances cause the A 25 percent vacancy allowance in Current harassment laws and enforcement 19 are a joke as any organizer will tell you. 20 worked with a tenants association in Harlem where the 21 tenant leader in a building with hundreds of violations 22 was sued for having a washing machine. 23 had the washing machine since moving in; the super had 24 helped her hook it up, and most other families in the 25 building had washing machines with the landlord's I recently This woman had ( 1 COMMITTEE ON __HOUSING AND BUILDINGS 2 knowledge. 3 not maintaining the building and the landlord figured 4 this was one way to silence her. 5 is in the mid-600's. . -· 313_ The tenants had the landlord in court for Her rent, by the way, The 25 percent vacancy allowance would 6 7 tighten an already too tight market, would encourage 8 harassment, and would not help the small owners in 9 neighborhoods where the people making enough money for al :i; a: 0 u. :.:: (.) 0 f- (/) 10 high rents are selling drugs. 11 There are a number of ways the Council a: UJ (/) :'.5 0 12 could help small owners: 13 property tax assessments and lower rates for Class 2, 14 perhaps with abatements for buildings serving low 15 income people; lower or cap the water and sewer 16 charges; force the Mayor to increase, rather than cut, 17 the budget for the low interest rehab loan programs 18 administered by HPD; fold the rent control MBR system 19 into the Rent Guidelines Board system with rent 20 stabilized units to lighten the bureaucratic load on 21 small owners. 22 help the small owners and tenants in low income areas. Equalize Class 1 and 2 "1" 0 "' ,;, "'N g ~ Q. ::> 0 a: al a: 0 (.) w I f- 23 All of these proposals would directly In summary, Met Council urges the 24 committee to pass the straight extenders, Intro 215 and 25 Resolution 144, out to the full Council for its vote on \ .314 ... 1 COMMITTEE ON HOUSING . AND BUILDINGS - 2 March 16, 1994. 3 regulated tenants in the city are depending on you. The two and a half million rent 4 Thank you. 5 CHAIRPERSON SPIGNER: 6 MR. W. ROMAN: I William Roman. I don't have any written 7 testimony. just wanted to try to keep to the time 8 line and make some comments about some of the things 9 I've heard here today and which I find somewhat co ::;; a: 0 10 disturbing. LL ~ (.) 0 t- en 11 First of all, I'm a board member of Met 12 Council on Housing and I've been involved in tenants 13 affairs for many, many years. 14 disturbs me about what's going on here is that all day 15 I have not heard from anybody here, any serious 16 discussion about the figures that the Census Bureau 17 provided to the city in terms of what they really mean 18 and what this Council should be doing. a: w en :5 ....00 I think the thing that LO J, LO (\J 6 0 "i> a.. :::) 0 a: (!) >co a: 0 (.) w :r: I- 19 Certainly, cautious people would take the 20 position that if you didn't want to cause some harm and 21 you weren't exactly sure about how to change the laws, 22 and most people would feel that they're not exactly 23 perfect, that you won't do anything at all. 24 have a number of bills besides Stanley Michels' bills 25 before the Council which I duly consider to be in And yet we \ ',, ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 support. 3 have been presented to the Council, the Census Bureau 4 based upon a huge sample. 5 reliability. - 315 They don't speak to any of the figures that It's renowned for its We talked before of every possible aspect 6 7 of New York City's housing and yet it's largely not 8 relied upon by the members of the Council to do 9 anything. Instead, we get anecdotal reports from small ell ::; a: 0 u.. 10 landlords by the Chairperson and by Council Member 11 Ognibene about how they come into their office and they 12 hear horrible stories about how hard it is to be a 13 landlord and then those members come into the Council 14 and other members and propose to do things to the rent 15 regulation law which have no, or based upon no 16 documentation whatsoever and, we're supposed to take 17 the word, the anecdotal word of some landlord who comes 18 in and cries poverty, totally unqualified. ~ (.) 0 I- (/) a: UJ (/) :'.5 ... 0 0 "'.;, "'N 6 0 "i> ~ c.. :::i 0 a: C!l >ell a: 0 (.) UJ I I- 19 And the bills reflect, the bills that are 20 being put forward, except for the Stanley Michels 21 bills, reflect exactly that kind of irresponsibility. 22 You're not saying to anybody that the 25 percent 23 vacancy, how many times it might occur, what i t will 24 address, who's going to get it. 25 bills, the same kind of defect exists. You're on the other \ And this ( 1 COMMITTEE ON .. HOUSING AND BUILDINGS 2 Council should not even entertain, I mean, you 3 humiliate yourselves by even considering such bills. 4 . . . 316 The general, everybody in this room 5 understands that the Census Bureau figures are accurate 6 because they represent and reflect the general economic 7 conditions that we've all been living with, tenants and 8 landlords, for a number of years now. 9 people are hurting and when people are hurting people Many, many (D :i: a: 0 10 ought not to do things that make more people hurt. 11 ought to be highly cautious. One LL :.:: u 0 1(J) a: w (J) ~ 0 st 0 lO J, lO N 12 And I think it needs, just to wrap up, it 13 needs to be said that there are many landlords who may 14 indeed have honest difficulty, but there are also many 15 landlords who have self-imposed difficulties. 16 And I remember being at the Rent 6 0 ~ 0.. :::, 0 a: (!) 17 Guidelines Board three or four years ago, this woman 18 landlord was very excited and came to me and said, 19 you're wrong, you're wrong, rent regulation is killing 20 me, I can't make a profit. 21 minute, what are you talking about, explain to me what 22 i t is you mean. 23 and she showed me the figures which she had brought to 24 the Rent Guidelines Board to show to the members on her 25 two buildings, and this is just by way of example, she >(D a: 0 u w I I- And I said, well, wait a And she said, well, just look at this, ( 1 COMMITTEE ON HOUSING AND BUILDINGS - 2 seemed to be an honest person. 317- · But I looked at those figures, her tax 3 4 returns she brought, she showed them to me willingly, 5 and in both of her buildings the amount of her mortgage 6 was in the 40 percent of her income. 7 she didn't even understand that nobody can buy a 8 building and pay 40 percent of the building's income in 9 mortgage and not sooner or later go under. I mean, you know, I really co ::. a: 0 u.. 10 don't understand that. :.:: (.) 0 1- So when a landlord or a bunch of landlords 11 (fJ a: w (fJ :'.5 0 12 come into your office, Mr. Spigner or Mr. Ognibene, I 13 would like to know, do you qualify, do you just 14 automatically believe what they say or are their 15 stories just grist for a frontal attack on rent 16 regulation. V 0 "'J, "'"'6 0 "i> ~ 0.. ::> 0 a: >co a: C!) 0 (.) 17 I, for one, am a strong believer in rent 18 regulation because when rent regulation was passed it 19 was specifically targeted to the speculation, to stop 20 rent gouging, to stop abuse in the marketplace, and to 21 protect the vast number of tenants in New York City who 22 are renters. w I I- 23 Thank you very much. 24 CHAIRPERSON SPIGNER: 25 MR. J. STANLEY: John Stanley. Good evening, members of ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 the City Council. -318 I thought I'd be board by this time but 3 4 one speaker after another gets better and better. 5 opposed to changing any of the rent regulations except 6 to make them stronger. 7 that I would like to cite as examples of what seems to 8 be the name of the game of landlords. I'm I have two buildings in mind One is on Third Avenue and 85th Street, 9 10 it's a 21 room rooming house, 20 rooms are vacant and 11 now the landlord is trying to make a final stroke to 12 get this Vietnam veteran who has lived there out. 13 the moment he has no heat but he also has only hot 14 water. A He has no cold water to drink. 15 I know this is very boring to you, sir, 16 but this is the sort of harassment that you think does 17 not go on. 18 But it does. Or come to my own building, an 1879 old 19 loft tenement, it was owned by one family from 1940 to 20 1978. 21 this building that was a rent regulated building. 22 i t was sold, in 1978, it was totally rent controlled. 23 The landlords swarmed over it to get it. 24 deter them to get this rent controlled building. Prospective landlords scrambled to get ahold of When It did not \ 25 It seems to me this building and landlord, ( .. - 319 1 COMMITTEE ON .. HOUSING AND BUILDINGS 2 being in the housing, what some of us come to think of 3 as housing racket, has nothing to do with providing 4 housing. 5 necessity of life. 6 Scotland there took place in what was called the 7 Clearance in which the English king sent troops to 8 clear the crofters out. It has only to do with making money off a In the 18th century in the north of And this is what is happening here in this 9 al ~ a:: 0 u... 10 city. Tenants are weakened with less and less legal 11 aid possible 12 made war on legal aid for the poor, and he has been 13 successful in helping his clients because it is more 14 and more difficult to find legal aid. ~ (.) 0 I- that terrible man, Ronald Reagan, en a:: LU ~ 0 V 0 "' .;, N "' 15 That is only the combat in the tenants' 6 0 "i' ~ a. :, 0 a:: (!) ~ a:: 0 (.) I am a veteran. I couldn't 16 struggle at Third Avenue. 17 possible pay 18 pension. 19 the rent of what is required. 20 landlords has succeeded in driving tenants out of the 21 building, the rent normally increases not by 25 22 percent, not by 50 percent, not by a hundred percent, 23 they increased it ten times. I'm a World War II veteran, have a The amount of my total income would not pay LU :r: I- 24 25 Now that the series of And, as has been mentioned here before, tenants were filled with such trepidation that they ( 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 dare not go to any city agency or to any other agency 3 to seek legal redress or to obtain justice here in this 4 land which is supposed to stand for justice. 320 Landlords have been whining, whimpering 5 Speak of the American 6 and hand-wringing here all day. 7 dream. 8 turned into a nightmare. 9 who are without housing, who are living in subway 10 They have the American dream but it has been Believe me, all the people tunnels, they know what the American nightmare is. They are not, by the way, homeless. 11 They Now remember right after the war we 12 are D.P.'s. 13 learned that phrase, displaced persons. 14 persons are displaced persons, only it was not, the 15 displaced persons in Europe were displaced by Hitler. 16 The displaced persons in New York City have landlords 17 as their Hitler. 19 This is what we are faced with. CHAIRPERSON SPIGNER: 18 Homeless Thank you very much, sir. 20 Jo-Ann Polise. 21 MS. J. POLISE: I feel like I'm part of a My name is Jo-Ann Polise and 22 theater of the absurd. 23 I'm a tenant in Stuyvesant Town and I'm the vice 24 president of the Stuyvesant-Peter Cooper Tenants 25 Association. 1 ( COMMITTEE ON - HOUSING AND BUILDINGS 2 - -321 I would like to start by saying that the 3 housing complex of Stuyvesant Town and Peter Cooper 4 have plaques in the middle of each of the complexes 5 boasting about how they were built to provide 6 affordable housing for people of modest means. We all know that there are not a lot of 7 8 jobs. 9 say to me, well, you're lucky just to even have a job. I can't tell you how many times I've had people co ::. a: 0 u. 10 But employers use this fact so people who come in as 11 new hires are given much lower starting salaries than 12 had been the case in the past, and merit increases are 13 practically nonexistent now. 14 just so lucky to just have a job. :..: () 0 ~ (/) a: UJ (/) :5 ... 0 But as I say, we're all 0 U') .;, U') "'c':, 15 Well, we all know that there's scarcity of 0 "? 16 decent housing as well, and landlords use that fact. 17 They know that if I can't afford an apartment and any 18 of these people can't afford it, there's any number of 19 other people who are willing to pay the outrageous 20 amount just so that they have a roof over their heads. 0.. ::::) 0 a: C) >co cc 0 () UJ ::c ~ 21 And you don't have to be a genius to see 22 that there's really something wrong with this picture. 23 But you have to stop and think about who this is 24 hurting. 25 in their corporate America because at the end of the This is not hurting the big guys who sit up \ ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 day they go home to Westchester, Long Island, 3 Connecticut and New Jersey. 4 .. 322 It's not hurting them. Who are you hurting? The secretaries, the 5 clerks, the mail carriers, you're hurting the backbone 6 of the city. 7 every morning who go to work, who pay the taxes, who 8 keep corporate America running. 9 You're hurting the people who get up And corporate America is going to leave if 10 the people who work in those places don't have a place 11 to live because they are, the real estate industry, the 12 Rent Guidelines Board and this City Council, you just 13 have to stop working in a vacuum, you have to realize 14 that people can't afford to live in apartments, that 15 they're just out of their reach. 16 And unless you're willing to continue to 17 offer people housing that they can afford, there's just 18 no where for them to go. 19 realize and recognize that the current system gives 20 landlords plenty of opportunity to circumvent the 21 annual rent guidelines, through individual apartment 22 renovation, through MVI's, which are really rent like 23 that for different maintenance. 24 do with improving the way I live. 25 And it's time for you to They have nothing to So I'm just asking this body to look at ( 1 COMMITTEE ON .HOUSING AND BUILDINGS 2 the whole picture and to stop the erosion of the rent 3 regulations in this city. 4 really, but you're hurting a vast number of people. . .. 323 You're not helping anyone, 5 CHAIRPERSON SPIGNER: 6 MS. D. SULLIVAN: Dawn Sullivan. My name is Dawn Sullivan 7 and I represent the East Side Tenants Coalition. 8 among our membership we have neighborhood associations, 9 block associations, senior citizen centers, tenant And co :E a: 0 u.. 10 associations and many, many individuals who care very 11 much about what's being discussed here. )<: (.) ~ (f) a: UJ (f) :s 12 13 0 I'm very tired and you are too and I ' l l try to be as brief as possible. 14 I urge you to consider the temptation of st" 0 ll) J, ll) C\I 6 0 '? 15 the real estate interests and act on behalf of the 16 public interest. 17 in their homes. 18 the real estate lobby to convince the public that rent 19 regulations hurt housing and that rich people live 20 cheaper. 21 tenants have high incomes. Rent regulations tend to keep people CL ::::l 0 a: Cl Millions of dollars are being spent by >co a: 0 t) UJ ::c I- 22 Only one-half of one percent of regulated Deregulating the apartments with higher 23 income tenants will not help the rental market. 24 will only bring in more profit to owners. 25 goes beyond an individual tenant, it is the housing It The issue ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 units that must be protected. 3 for regulated tenants at $19,000, and the average rent 4 of $551, you have a reason to pass a clean bill, no 5 amendments in this house. 324 With the median income I think you've heard a lot of sad sales 6 7 today but I really hope you'll listen to ours. 8 sorry that more members of the committee couldn't have 9 stayed and listened with us. 10 And I'm Almost every day I hear from tenants 11 scared of being priced out of their homes. 12 rent regulations is working, middle income tenants are 13 barely holding on. 14 know where I can find an affordable apartment. 15 always have to tell them no. Even if People are desperate and say do you And you High rents are driving out the very people 16 Jo-An mentioned some of 17 that make up the work force. 18 them. 19 sales personnel, clerks, waiters, professionals coming 20 in at entry level jobs, these people can't afford what 21 the industry calls market rents. I'll mention ones I have here, social worker, For example, in the rental market, even on 22 23 the low end in walk-up buildings, the renting price 24 currently is $900 for a small one bedroom and $800 for 25 a studio. With a person paying a third of their income ( 1 COMMITTEE ON - HOUSING AND BUILDINGS 2 in rent, which is pretty average nowadays, you have to 3 have an income of $32,400 to pay for a small one 4 bedroom and $28,800 to pay for the studio. 5 don't have it. 6 - -- 325 People just Whatever, I'm very concerned about your 7 bills and the 25 percent increase on vacancies. 8 don't think you can protect tenants adequately enough 9 on harassment. I There are some subtle forms of CD ::l: a: 0 u.. 10 harassment. 11 in when a tenant is not there and changing things in 12 the apartment. 13 prove. There's what's called gaslighting, coming ~ (.) 0 li; a: UJ CJ) :'.5 0 'CD a: 0 (.) 18 CHAIRPERSON SPIGNER: 19 (Written testimony submitted by Jack Thank you. UJ J: I- 20 Freund, Rent Stabilization Association of New York 21 City) : 22 The Committee on Housing and Buildings is 23 today considering the extension of a set of 24 anachronistic, counterproductive and ineffective rent 25 regulations laws. These laws have been responsible for ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 destroying the housing stock and the housing 3 opportunities of city residents for more than 50 4 years. . . ---- 3 2 6 I am therefore deeply gratified and on 5 6 behalf of the 25,000 members of the RSA who own and p 7 operate approximately one million units of rental 8 housing, 9 today's agenda the first serious proposals for reform I want to thank the committee for placing on CD :; a: 0 10 of the rent regulation laws in decades. Before 11 addressing those reforms directly, I think it is 12 important to understand the current crisis which makes 13 these reforms necessary. LL :.: (.) 0 I- C!) a: w ~ The city now faces a potential wave of 14 a. ::, 0 a: Cl iiia: 0 (.) 15 housing abandonment which could equal the devastation 16 which occurred in the 1960s and '70s. 17 city data, there are now 15,000 multi-family rental 18 buildings, primarily small, walk-up buildings, in tax 19 arrears. 20 which total approximately 28,00 tax delinquent 21 properties. 22 between 50,000 and 140,000 apartments are in danger of 23 abandonment. According to w J: I- 24 25 Two years of in rem actions are now pending Various studies have estimated that The abandonment potential affects the same low income, minority neighborhoods which have already 1 COMMITTEE ON HOUSING AND BUILDINGS 2 be decimated by social and economic deficiencies and 3 threatens what remains of the quality of life in these 4 neighborhoods. -321 In addition, at a time of budgetary 5 6 crisis, a new wave of housing abandonment will 7 conservatively cost the city $650 million annually in 8 lost taxes and increased expenditures 9 is desperately needed to fund essential city services 10 money which such as police, fire protection and education. The reform proposals before this committee 11 12 directly address the economic crisis of the housing 13 industry. 14 Board, the economic guardian of the city's housing, has 15 acknowledged that one out of every eight rent 16 stabilized buildings is in economically marginal 17 condition. 18 has identified the elemental problem: 19 insufficient to meet operating cost expenses in a 20 significant portion of the city's regulated buildings. Even the New York City Rent Guidelines Every study which has looked at this issue rental income is In a city such as New York, the culture of 21 22 rent regulation has developed like an ingrown toenail 23 and cannot be quickly and completely excised without 24 pain. 25 of rent regulations be eliminated overnight, even No one realistically proposes that this system ( 1 COMMITTEE ON - HOUSING AND BUILDINGS 2 though harsh medicine is sometimes the best remedy. · 328 To the contrary, the proposals before this 3 4 committee, ranging from a statutory vacancy allowance 5 of 25 percent to the decontrol of apartments across the 6 board as they become vacant, all share two 7 characteristics: 8 rental income, and they hold harmless all existing 9 tenants. 10 they address the issue of inadequate We would urge this committee to adopt the 11 most expansive of the proposals before you 12 the board vacancy decontrol. 13 provide economic relief to the housing industry, while 14 protecting all in-place tenants and moving the city 15 towards the free housing market which has always been 16 the statutory intent of the rent regulation laws. 17 across This proposal would This measure also has the advantage of 18 phasing out rent regulations over a long period of 19 time, estimated to be as long as 24 years, which would 20 mean that market disruptions would be minimal. 21 The more limited proposal for vacancy 22 decontrol of just those buildings containing 20 units 23 or less has the advantage of targeting exactly those 24 buildings which are in greatest danger of abandonment. 25 And the proposal for a 25 percent vacancy allowance, ( 1 COMMITTEE ON HOUSING AND . BUILDINGS 2 while not moving us closer to the goal of a free 3 housing market, at least addresses the issue of 4 providing increased rental income to sustain our 5 housing stock. 6 ·- 329 There are a couple of issues which are 7 commonly raised as objections to any proposal for 8 vacancy decontrol or increased vacancy allowances. 9 is that the incidence of harassment would increase. One No CD :a: cc 0 10 one, and certainly not the RSA, condones harassment of 11 tenants under any circumstances. 12 City has the most stringent anti-harassment laws in the 13 country, which probably accounts for the fact that 14 there are so few actual findings of tenant harassment 15 by the regulatory agencies. lL :.::: () 0 I- m That is why New York cc w 0 cc (!) ~ cc 0 () 17 rent increases, whether arising from decontrol or 18 vacancy allowances, decrease the supply of so-called 19 affordable housing units. 20 issue, yet there is a clear choice: 21 rents to rise to meet operating cost requirements, or 22 we allow rents to remain at inadequately low levels and 23 risk losing our housing resources to abandonment. 24 Some would counter with the illusory w J: I- 25 This is a more difficult either we allow suggestion that more nonprofit housing is the solution. --------- ( 1 COMMITTEE ON -HOUSING AND BUILDINGS 2 However, this ignores the fact that 20 percent of the 3 housing sold by the city to nonprofits is now also in 4 tax arrears. 5 same operating cost pressures as private owners, unless 6 substantial tax abatements and other concessions are 7 provided, depriving the city of the money it needs to 8 operate. 9 330 That is because nonprofits must meet the The real answer to this objection is co :::;; a: 0 u.. 10 another proposal which is on the table today, a 11 resolution calling for a SCRIE-type program for low 12 income renters. 13 residents whose income is insufficient to support any 14 rent payments whatsoever. 15 is to supplement incomes, not try to hold down rents, 16 making the property owner bear the burden and, 17 ultimately, placing the burden on every taxpayer. 18 The RSA strongly endorses the income :.:: (.) 0 I- (/) a: UJ (/) :'.5 0 st 0 There are a significant number of city In these cases, the answer LO ,;, LO C\I g "i> a. :::, 0 a: (!) >co a: 0 (.) UJ I I- 19 supplementation measure before you, as well as other 20 proposals for an increase in the shelter rent welfare 21 allowance, which would allow low income New Yorkers to 22 live in decent housing. 23 The committee also has before it several 24 measures which would rationalize the reform measures 25 which were enacted in Albany last year. These measures . . 331 1 COMMITTEE ON HOUSING AND BUILDINGS 2 attempted to introduce some equity into the rent laws 3 by decontrolling certain luxury apartments occupied by 4 wealthy renters. 5 of apartments occupied by households earning more than 6 a quarter of a million dollars a year, regardless of 7 the rent paid. 8 households if they pay $2,000 or more per month in 9 rent, but not if they pay less. One measure would allow the decontrol It makes no sense to decontrol wealthy A second measure would eliminate the 10 11 October 1, 1993 date as a trigger for the decontrol of 12 apartments renting for more than $2,000 a month. 13 October 1st date is purely arbitrary and does not 14 conform with the notion that high rent apartments 15 should not be regulated, whether they are high rent now 16 or in the future. The We urge the committee to approve these 17 18 amendments. 19 of apartments nor would they provide the required 20 economic relief for the housing industry, but they 21 would send a signal that government will not regulate 22 where it is not necessary nor will it protect those not 23 in need of protection. 24 25 They would not affect a significant number In this context, I should note that the recently released data from the 1993 Housing and ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 Vacancy Survey does not bear on any of the proposals 3 before the committee. 4 to 3.44 percent from 3.78 percent in 1991, this is not 5 a statistically significant difference. 6 drop in the vacancy rate for apartments renting for 7 $1,250 or greater from 10.15 percent to 4.47 percent 8 does not mean we can be certain that the vacancy rate 9 for this class of housing is less than five percent. 10 The new survey did produce some results 332 While the 1993 vacancy declined Similarly, the 11 which are very surprising and which appear illogical. 12 Unfortunately, the computer data tapes for the survey 13 have not yet been made available to the RSA, and so we 14 have not been able to analyze these results. 15 What is significant about the survey 16 results is that the citywide vacancy rate remains at 17 its second highest level in 30 years. 18 vacancy rate has remained below five percent, even in 19 the midst of the most severe housing recession in 20 decades, there is a question as to whether the vacancy 21 rate can ever rise above five percent and whether the 22 city can ever technically not be in a housing 23 emergency. 24 25 Since the There are sig~ificant questions about the way the vacancy rate is calculated which should be ( 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 examined before the Council routinely continues to 3 declare a housing emergency decade after decade. 333 In light of these considerations, I urge 4 5 the committee to act favorably on the proposals before 6 you today. 7 of life of its residents depends on a vibrant housing 8 market. 9 market which is quickly falling beyond any hope of 10 The city's economic future and the quality Instead, we have experienced a catatonic resuscitation. We urge you to take this opportunity to 11 12 breathe new life into the city's rental housing in 13 order to benefit the city's economy and its 14 residents. (Written testimony submitted by Attorney 15 16 General Oliver Koppell): 17 On March 31, 1994, the critical 18 protections for New York City rental tenants are due to 19 expire unless this body votes to renew them. 20 this statement to you today to urge that you renew the 21 rent control and rent stabilization laws in their 22 current form 23 protections in the laws 24 the necessary protections to the thousands of New 25 Yorkers who depend on these laws for habitable, I submit without weakening any of the tenant and continue to provide 1 COMMITTEE ON HOUSING AND BUILDINGS 2 affordable housing. 3 _334 As the newly selected Attorney General of 4 New York, I recognize more than ever that the 5 fundamental need for shelter requires effective and 6 meaningful legal protection from market forces. 7 the years, as a member of the New York State Assembly, 8 I have strongly supported the extension and 9 strengthening of the state's rent control and rent 10 11 Over stabilization laws. I firmly believe that these laws, with the 12 administration processes they provide, guarantee 13 fairness to both tenants and landlords and are the best 14 way to ensure that rental housing is not made 15 unaffordable t9 the working class and middle class. 16 In the face of a recent federal court 17 decision, however, I am even more convinced that 18 so-called marked forces can be used and will be used to 19 drive tenants from their homes if statutory protection 20 is not guaranteed. 21 In a decision by the Second Circuit Court 22 of Appeals in New York City just last week, the federal 23 Resolution Trust Corporation, RTC, was authorized to 24 seek to evict non-purchasing rent controlled tenants 25 who live on condominiums where the shares allocated to ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 their apartments were transferred to the RTC. 3 given the green light to evict rent stabilized tenants 4 in similar positions at the end of their leases, as 5 well. 335 RTC was Unfortunately, and I believe erroneously, 6 7 the court rejected the arguments made by my office, 8 which had been accepted by the lower court, that the 9 rent control and stabilization laws cannot be CD ::. a: 0 u.. 10 repudiated by the federal law which established the 11 RTC, which was intended to bail out failed savings and 12 loans. 13 determine the best course of conduct to protect these 14 and other rent controlled and rent stabilized tenants 15 who may be affected by the RTC. ~ (.) 0 ti; a: LU ~ 0 st 0 We are now reviewing the court's decision to LO ,;, LO C\I g ~ a.. ::, 0 a: (!) 16 No matter what is the outcome, however, 17 this decision makes even clearer that the millions of 18 New Yorkers who live in rent controlled and rent 19 stabilized housing need effective, enforceable rent 20 protection laws to ensure fairly priced housing and the 21 right to continued occupancy. >CD a: 0 (.) LU :I: I- 22 Without extension of this law as currently 23 drafted, millions of New Yorkers who are employed at 24 minimum wage or near minimum wage, as well as elderly 25 people dependent on Social Security for their economic 1 COMMITTEE ON HOUSING AND BUILDINGS 2 survival, are at risk. 3 the vast majority of those in rent controlled and rent 4 stabilized housing. 336 These working class tenants are In 1990, for example, the mean income for 5 6 all rent stabilized tenants in New York City was 7 $28,742. In addition, an increasing number of the 8 9 tenants of New York's rent stabilized units are 10 Hispanic and Asian households, frequently households 11 with children. 12 income earners taking advantage of government 13 regulation and landlord largess. 14 astounding 20 percent of the tenants in rent stabilized 15 apartments in 1991 received public assistance. 16 Some complain that tenants are high But in fact an Some question the administrative processes 17 in place pursuant to the law and complain they favor 18 one group or the other. 19 process for determining rent increases under the law is 20 a 21 system of administrative procedures established by the 22 laws does protect both landlords and tenants. 23 opinion, the existing law protects not only the tenants 24 who live in the housing, and the landlords who own the 25 premises, but also the public interest of the city at just and equitable one. I believe that on balance, the While not perfect, the In my ( 1 COMMITTEE ON _HOUSING AND BUILDINGS . 2 large. 3 337 As part of a government committed to 4 serving its citizens, we must preserve access to 5 affordable, quality housing. 6 existing rent regulatory structure is our best 7 opportunity to preserve that housing. 8 you to renew the rent control and ~ent stabilization 9 laws in the current form, without weakening amendments. 10 11 I believe that the I therefore urge (Written testimony submitted by Mickey Gensler, Skyview Tenants Association): 12 New York City has a major problem, crime. 13 I am not talking about street crime. 14 about the crime of unaffordable housing and the crime 15 in which the landlords put their hands in the tenants' 16 pocket. 17 I am talking Do not think that only tenants gain when 18 housing is affordable. 19 much of their pay on rent, this does not leave very 20 much money to buy other necessities, such as food, 21 clothing, et cetera. If they cannot buy these goods in 22 their neighborhood store, then the store cannot exist 23 and closes. 24 neighborhood and once promising neighborhoods have 25 fallen to this blight. When tenants have to spend too This destroys the fabric of the 1 COMMITTEE ON HOUSING AND BUILDINGS 338 (~ Sociologists point to the decline of 2 3 family life to the time when both parents had to go to 4 work to pay the rent. 5 It is an economic fact that as the price 6 of goods or services rises, more people can no longer 7 afford them. 8 tenants can no longer afford them, they must move in 9 with someone else, move out of the city, or become When rent rises above the price that 10 homeless. 11 the city placed welfare recipients in SRO's at enormous 12 expense, then everyone who worked in the city or lived 13 there had to bear the cost. The homeless are everyone's problem. 14 Here is a scenario: When The Rent Guidelines 15 Board meets to present the landlord with a subsidy by 16 granting them a rent increase. 17 satisfied some greedy landlords, so they devised a 18 scheme or scam to get more money. 19 if they did not take care of small maintenance problems 20 they would be rewarded with a major capital 21 improvement. 22 Somehow this rarely They realized that What is more, their political friends gave 23 them a bonus. 24 they could continue to collect it. 25 Machiavellian scheme. Even after the improvement was paid for, The MCI was truly a The tenant could pay for the 1 COMMITTEE ON HOUSING AND BUILDINGS 2 improvements so that the developer could reap a 3 windfall by going cooperative·. 4 did not even think about protecting the buyers in these 5 cooperatives. ·- . 339 The elected officials The landlords have decided that their much 6 7 thought out plan to get rid of rent stabilization was 8 too risky a proposition for even their most loyal 9 political friends, 10 i t slowly. 11 ounce at a time. so they devised a plan to get rid of They would get their pound of flesh an 12 Now they are back to further emasculate 13 the rent regulations, which do exactly what they are 14 supposed to do, they stabilize housing. 15 I say they have gotten much more than they 16 deserve. 17 people are being subsidized by the landlords with rent 18 stabilization laws, you might consider that there are 19 20 times as many people who cannot afford the rents 20 they are paying now. 21 Before you buy the canard that many wealthy Basically, most of the vacant apartments 22 in New York City are those warehoused or on vacancy 23 decontrol and are priced too high to rent. 24 25 What other business attempts to guarantee the merchant a profit? r 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 340 I can think of two good reasons for 3 denying any further weakening of rent laws: 4 the fair and prudent thing to do; two, while landlords 5 may fund political campaigns, when it comes to voting, 6 there are far more tenants, and unless they change the 7 laws, elections are won by the method of garnering more 8 votes. one, it is A free market only prevails when there is 9 CD :l? a: 0 10 competition. 11 When a businessman goes out of business, nobody says he 12 didn't make enough profit, they usually say that he was 13 a poor businessman. 14 landlords? There is no competition for apartments. LL X: (.) 0 I- (/) a: UJ (/) :5 ..,.0 0 "' .;, "' N ~ a. ::> 0 a: C, ?oa: 0 (.) (Written testimony submitted by Senator 15 16 Why doesn't that thinking apply to Franz Leichter): 17 My name is Franz S. Leichter and I 18 represent the people of much of Manhattan's West Side 19 and the northwest Bronx in the New York State Senate. 20 I am here today to support the renewal of New York 21 City's rent control and stabilization laws and to 22 oppose the bills that have been offered to weaken the 23 city's laws. UJ :r I- 24 25 Last June, the New York State Legislature renewed the state's rent control laws and enacted 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 several changes in the law that weaken the system. 3 worked to stop those changes, and I voted against the 4 final compromise. 5 341 I Those changes included luxury and vacancy 6 decontrol provisions, as well as additional rent 7 increases for improvements in apartments and diminution 8 of penalties for landlords who fail to file proper or 9 timely initial or annual registration statements. CD ::!?i er 0 u. 10 These changes were opposed by nearly the )I:: (..) ~ rn 11 entire New York City legislative delegation. 12 be truly ironic if the weakening of New York City 13 rental regulation laws at the insistence of Long Island 14 and Upstate Republicans was extended even further by 15 the Democrats who control the New York City Council • It would er LJ.J rn :5 0 'CD er 0 (..) 17 to landlords and those Republicans in the Legislature 18 who will no doubt redouble their efforts to expunge 19 rent regulation laws from the books in the new round of 20 battle three and one-half years from now. LJ.J I I- 21 Despite the short term relaxation of 22 market pressure to force rents higher in the last 23 couple of years, it appears the market is already 24 turning around and rents are again on the rise. 25 Clearly, our vigilance against attempts to weaken and 1 COMMITTEE ON -HOUSING AND BUILDINGS 2 eventually dismantle the rent control system must be 3 sustained if we are to protect the thousands of New 4 York City residents who pay among the highest rental 5 rates in the nation and depend upon rent regulation in 6 order to remain citizens of this city. ·-- 342 Therefore, I strongly urge you to pass 7 8 both Intro 215 and Resolution 144 and renew both rent 9 control and rent stabilization laws without weakening 10 their provisions. 11 12 (Written testimony submitted by Manhattan Borough President Ruth Messinger): 13 I unequivocally support Intro 215 and 14 Resolution 144, which will extend for three years the 15 rent stabilization and rent control laws for the 16 tenants of New York City. Rent regulation and tenant protections are 17 18 an essential component of the city's overall housing 19 policy. 20 units; over two-thirds of them are rental units. 21 Approximately half the rental stock is regulated 22 through rent stabilization (1,013,097 units or rent 23 control (101,798 units). 24 apartments are home to some two and one-half million 25 people. New York City has nearly three million housing These rent regulated 1 ( 2 COMMITTEE ON . HOUSING AND BUILDINGS 343 Every three years, the New York City 3 Housing and Vacancy Survey (HVS) is prepared for the 4 city using housing and economic data from the U.S. 5 Bureau of the Census. The 1993 HVS documents an eight 6 percent decline from 1991 in the number of vacant and 7 available for rent units. 8 vacancy rate at 3.44 percent. 9 five percent set by the State Legislature as the This puts the current This is well below the 10 threshold for determining a housing emergency. 11 also the standard that gives the City Council its 12 authority to renew the rent laws. 13 met and exceeded this criteria. 14 This is We have certainly The rent laws are an indispensable part of 15 the city's strategy for addressing its housing crisis. 16 For an increasing number of households, these laws are 17 a hedge against homelessness. 18 households of all incomes live in our rent regulated 19 stock, lower income households are clearly the main 20 beneficiaries. 21 While it is true that According to the 1993 HVS, 63 percent of 22 households living in rent controlled units and 48 23 percent of households living in rent stabilized units 24 earn less than $20,000 per year. 25 renter households with incomes below the poverty level The proportion of r 1 COMMITTEE ON .. HOUSING AND BUILDINGS 2 has increased and is now 30 percent. 3 the proportion of low rent units, those renting for 4 less than $400 per month, has declined to 24 percent 5 and now represent less than one-quarter of the total 6 number of occupied renter units. 7 344 At the same time, It was the shortage in the supply of 8 affordable housing that first prompted the State 9 Legislature in 1943 to introduce laws to regulate rents 10 and to preserve tenure and housing quality. 11 to address the crisis today must be comprehensive and 12 meaningful and include the rent, eviction and housing 13 quality protections provided by the current rent laws. 14 In this spirit, I urge you to vote in favor of Intro 15 215 and Resolution 144. 16 Strategies The many other bills before this committee 17 today seek to undermine and roll back the existing 18 regulations and protections. 19 and Intro 228, which have received a lot of attention 20 in the media today, would allow a 25 percent rent 21 increase upon vacancy. 22 is not based on the real costs of operating buildings. 23 For example, Intro 227 This increase is arbitrary and The New York City Rent Guidelines Board 24 sets annual rent adjustments, including vacancy 25 allowances, using data on landlord costs and ( 1 COMMITTEE ON .HOUSING AND - BUILDINGS 2 information and testimony from tenants and owners. 345 In addition, large increases upon vacancy 3 4 can act as an inducement for owner harassment and 5 illegal evictions. Therefore, I urge you to vote for Intro 6 7 215 and Resolution 144 to extend the existing rent laws 8 for all rent controlled and rent stabilized buildings. (Written statement submitted by Richard 9 10 Gottfried, New York State Assembly Member): I am Ass~mbly Member Richard N. Gottfried. 11 12 I represent Chelsea, Clinton, Midtown, part of the 13 Upper West Side, and Murray Hill. 14 I am sorry that I cannot be here in person 15 today, but I want to delivery testimony on an issue I 16 feel very passionate about. 17 proportion of rent controlled and rent stabilized 18 apartments. 19 My district has a large As always, there are forces that want to 20 destroy or undermine our rent control and rent 21 stabilization laws. 22 Now landlords are hoping the City Council 23 will weaken our rent laws even more. 24 being talked about are: 25 decontrol of apartments current under rent control and Some of the ideas minimum base rents, further r· 1 COMMITTEE ON HOUSING AND BUILDINGS 2 decontrol of vacated apartments. 346 The proposal for a vacancy increase in 3 4 rent is especially dangerous. It would give landlords 5 a rent increase without any relationship to the 6 existing rent, the landlords' costs, the services being 7 provided, or the landlords' profits. 8 a big profit would get the same increase as one who 9 wasn't. A landlord making Both rent control and rent stabilization are 10 designed to give rent increase based on costs. 11 proposal violates that policy. 12 This A vacancy rent hike would also be an 13 enormous incentive to landlord harassment, to force out 14 tenants. 15 is not a guess. 16 decontrol and vacancy increases have been used in the 17 past, that was the result. 18 not enough. 19 caught and punished. The elderly would be the main targets. It is based on history. This When vacancy Laws · against harassment are Only a tiny fraction of criminals are How can a public official seriously 20 21 propose a law to give landlords a financial incentive 22 to harass 23 citizens? 24 25 even assault defenseless senior Finally, a vacancy increase would be a cruel burden on families who are trying to scrape ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 together the money to move to better housing or a 3 better neighborhood. 4 beyond their reach. 347 This would yank that opportunity In Albany last year, the landlord lobby 5 6 succeeded in chipping away at existing rent laws. And 7 just last week, a federal court gave the Resolution 8 Trust Company permission to rip New York's rent laws 9 out from under tenants. Already, elderly tenants are 10 being told by the RTC to either move out or buy their 11 apartment for an unaffordable sum of money. 12 tenants are being made to pay for the mistakes of 13 failed real estate ventures of the 1980s, and it is 14 wrong. These Tenants are not receiving a free ride 15 In fact, it is 16 under rent control or stabilization. 17 usually the elderly, who have lived in their apartments 18 for years and years and seen their rent increased over 19 and over again as their incomes dwindle, that are the 20 most hurt. 21 Meanwhile, many landlords are getting away 22 with huge rent increases that go mostly into their 23 profits, and not into their buildings. 24 25 The issue before the City Council is especially unfair for tenants. The landlords and their 1 COMMITTEE ON HOUSING AND BUILDINGS 2 friends can argue for weaker tenant protection. 3 because of the 1971 Rockefeller legislation, the city 4 is barred from enacting any provision to strengthen the 5 laws. 6 as they are. ( 7 348 But So the only fair course is to continue the laws In Albany last year, the rent laws were 8 weakened by the State Senate, then renewed only minutes 9 before they expired. With the deadline for the City 10 Council to act soon approaching, I urge you to 11 disregard all weakening amendments and pass the New 12 York City rent laws as they exist today. 13 Thank you. 14 (Written testimony submitted by Assembly 15 Member Melinda Katz, 28th Assembly District, Queens): 16 Chairperson Spigner, members of the 17 committee, thank you for giving me the opportunity to 18 speak out on behalf of the renewal of our rent laws. 19 represent a district that is comprised of one of the 20 largest senior citizen populations in the city. 21 of them are on fixed incomes and many of them do not 22 qualify for a rent exemption. 23 jeopardy would be unconscionable. 24 what the consequences will be if the rent control laws 25 are not renewed. Many To put their homes in Yet this is exactly I 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 No system is perfect. The rent control 3 and rent stabilization laws aren't perfect 4 ask a rent controlled tenant who is now paying a bigger 5 annual increase than a rent stabilized tenant. 6 these laws, I 7 of tenants to remain in New York City. 8 Census Bureau survey confirms how severely New Yorkers 9 have suffered from the recession. just But submit, are what allow tens of thousands The recent It shows the current 10 median income for renters decreased from $20,000 to 11 $19,005 in 1992. 12 I would strongly suggest that a study be 13 undertaken to look at the feasibility of having a 14 uniform rent control system that would bring all 15 tenants under one system. 16 rent controlled tenant now pays a 7.5 percent increase 17 each year and a rent stabilized tenant pays five 18 percent. 19 tenant still pays a fuel surcharge and a rent 20 stabilized tenant doesn't. It doesn't make sense that a It doesn't make sense that a rent controlled I would further submit that I am going to 21 ~- 349 22 support a change in the major capital improvement, MCI, 23 program. 24 the numerous rent increases from the MCI's. 25 make sense to me that a landlord who is required to fix Tenants are being forced to move because of It doesn't --- -- ------- 1 COMMITTEE ON HOUSING AND BUILDINGS 2 a violation such as a leaky roof is rewarded with a 3 rent increase. 4 an MCI is granted, the increase is lumped into the base 5 rent instead of being listed separately. 6 renews their lease they get an increase on their base 7 rent and the MCI increase. 350 ,( 8 9 It doesn't make sense to me that when When a tenant Maintaining rent regulations is essential to the well-being of the city. I urge the committee to co ::E a: 0 u.. 10 vote for the continuation of the rent regulations. :.:: t) ~ 11 (/) (Written testimony submitted by Manhattan a: w (/) :5 12 13 0 ,q0 "'.;, "' (\j 8~ Community Planning Board 4): Manhattan Community Board 4 stands firmly 14 in support of New York's rent protection laws and 15 opposes any change in the law which would weaken the 16 protections provided to the city's rental tenants. 17 Further, we urge the City Council to take action to 18 make the protections of the current laws permanent. Q. :::> 0 a: Cl >co a: 0 t) w :i: I- 19 Our rent protection laws are all that 20 stand between being housed and being homeless for tens 21 of thousands of New Yorkers. 22 residents of the city cannot absorb the tremendous 23 increases in housing costs that would accompany changes 24 in our current laws. 25 freely upward, our middle class renters would be driven Low and middle income If rents were allowed to float r 1 COMMITTEE ON HOUSING AND BUILDINGS 2 out of the city and low income renters would be driven 3 out of their homes and into the streets. 4 351 Young people from throughout the United 5 States whose quest for fame and fortune draws them to 6 New York and enriches the cultural life of the city 7 and, ultimately, of the country; immigrants from abroad 8 whose ambition and hard work have fed our economy and 9 sent word 'round the world of the wonders of New York; 10 corporations and organizations considering New York for 11 potential headquarters location 12 find housing in New York out of their financial reach 13 and, as time goes by, the vitality of the city and its 14 leadership in the world will be diminished in ways 15 beyond our imagining. 16 all of these will Our rent protections were enacted in 17 response to a housing shortage of crisis proportions, 18 and the crisis has not abated. 19 especially damaging stresses on our housing stock. 20 Reagan-Bush government brought to a halt the federal 21 government's sharing in responsibility to develop and 22 build low and moderate income housing; the city's 23 misguided policies supporting luxury housing 24 development and the economic excesses of the early '80s 25 led to displacement, gentrification and warehousing. Indeed, the 1980s put The 1 COMMITTEE ON HOUSING AND - BUILDINGS And we have all seen the results: 2 352 boarded 3 up residential units and tens of thousands of New 4 Yorkers sleeping in shelters, on the streets and in our 5 parks. We are not unsympathetic to the struggles ·6 7 of small property owners but we know many who manage 8 their properties well and are able to more than cover 9 their operating costs. There are solutions for those 10 who are having trouble: 11 very low interest rehabilitation loans; training 12 programs are regularly offered by city organizations to 13 help them more effectively manage their buildings; the 14 New York Public Interest Research Group offers group 15 purchasing of fuel oil through which owners can realize 16 substantial savings over individual market prices. 17 HPD has programs providing Millions of New Yorkers benefit from the 18 current laws and would be harmed if those laws were 19 weakened in any way. 20 reap the benefits of the changes that have been 21 suggested by various members of the City Council. 22 Those few are powerful, we know. 23 organized and have the benefit of substantial economic 24 resources. 25 In comparison, very few would They are well Board 4 speaks for those without such 1 COMMITTEE ON HOUSING AND BUILDINGS 2 power and urges the Council to stand with us. (Written testimony submitted by Florence 3 4 Eng, It's Time, Inc.) Speaker Vallone, Chairman Spigner and 5 6 . 353 honorable members of the City Council: I represent It's Time, Inc., a CBO located 7 8 on the Lower East Side. It's Time, Inc. has served 9 community residents for over 27 years. I am here to CD ::. a: 0 u.. 10 express my organization's support for the continuation 11 of strong rent control and rent stabilization laws here 12 in New York City. :.:: () 0 1- (/) a: UJ (/) :5 Some of It's Time's clients are here with 13 .... 0 14 me today to support the extension of rent guidelines. 15 Others who could not attend this hearing have signed 16 petitions. 17 the City Council and to the Mayor. 18 collect more. 0 If) .;, If) N 6 0 ci> ~ I have here 1,200 signatures addressed to 0. ::, 0 a: (!) >CD a: 0 () We continue to Our clients are your constituents. UJ J: I- 19 Some owners are claiming the rent laws are 20 providing a subsidy, when in fact it's the opposite. 21 Rent stabilization minimizes market failure so that 22 renters do not fall into a need for subsidy. 23 to the 1990 census, 29 percent of the population in our 24 primary service area have incomes below 125 percent of 25 the poverty level. According ~· I 1 COMMITTEE ON . HOUSING AND BUILDINGS 354 The rent laws are aimed at minimizing the 2 3 effects of a housing shortage and, as you know, there 4 is a shortage in housing, reflected in the 3.44 percent 5 vacancy rate in 1993. 6 the Graduate School of Management and Urban Policy at 7 the New School for Social Research, found the vacancy 8 rate in our primary service area to be 2.35 percent in 9 1990. A study done for It's Time by Please see attached Table A. 10 The laws serve to stabilize rental prices 11 in a housing shortage, to keep housing financially 12 within reach. 13 and Vacancy Survey 1991, the median income of renters 14 has dropped compared to the income needed to pay median 15 rents. 16 ' According to the New York City Housing See attached Table B. If not for the rent laws, this would 17 create profiteering, excessively high rents, and the 18 withholding of services and repairs. 19 Housing is dramatically overcrowded. 20 Please see attached Table C. The population in our 21 service area grew at twice the rate of New York City as 22 a whole. 23 households with more than one person per room in the 24 primary service area jumped from 18 percent in 1980 to 25 26 percent in 1990. The New School study found that the number of \ 1 2 COMMITTEE ON HOUSING AND BUILDINGS 355 Chinatown is even more crowded, with an 3 overcrowding rate of 29 percent in 1990. This area is 4 the most crowded on the Lower East Side. There is 5 increased doubling and tripling up with friends, 6 relatives or strangers. 7 8 9 (Written testimony submitted by Florence Eng, Chinatown Tenants Coalition): Speaker Vallone, Chairman Spigner and [ll :::i: a: 0 u.. 10 honorable members of the City Council: 11 Chinatown Tenants Coalition. 12 support for the continuation of strong rent control and 13 rent stabilization laws in New York City. I represent the :.: (.) ~ (/) I am here to express our a: w (/) ::i 0 ,t 0 lO .;, lO N 14 We are a coalition of six community based It's Time, Inc., the Lower East 15 groups in Chinatown: 16 Side Local Enforcement Unit, CIVIC, the Chinese 17 Progressive Association, Asian Americans for Equality, 18 and the Chinese United Methodist Church. 19 Representatives from each group are with me today. 20 Many of your Chinese constituents are 6 0 ~ a.. :::, 0 a: (!) >[ll a: 0 (.) w I ~ 21 newly arrived immigrants and have low incomes. 22 According to the 1990 census, the Asian population has 23 grown substantially in the last decade. 24 New York for economic reasons. 25 better chance for their children. Many arrive in They work hard for a The rent laws ----- r -- -- -~ 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 protect them from sudden huge increases and owners who 3 withhold services and repairs. 4 is essential for community residents to concentrate on 5 caring for their children and their work. 6 7 8 9 356 Safe and secure housing Please renew the rent laws without weakening amendments. (Written testimony submitted by Harlem Taxpayers and Property Owners Association): CD :. a: 0 u.. 10 The position of the Harlem Taxpayers and ~ (.) 0 Ien 11 Property Owners Association with regard to vacancy 12 decontrol and rent regulations is as follows: a: w en :'.S 13 0 st 0 We would like the installation of vacancy 14 decontrol in buildings of 24 units or less, and allow 15 the units to be rented at market value. 16 needs to encourage tenants and investors to return to 17 the area and help rebuild the housing stock and bring 18 i t into the 21st century, instead of discouraging these 19 investment dollars from purchasing and renovating it. 20 The benefit of vacancy decontrol is that l() ,;, l() "'6 Our community 0 Cl) ~ 0.. :::J 0 a: (!) >CD a: 0 (.) w I I- 21 it creates a positive tenant environment due to the 22 fact that decontrol works to provide incentives to 23 landlords to improve formerly rent controlled units, in 24 the hopes of increasing the rental to a market value. 25 This regenerative effort improves the housing stock on ,- 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 an ongoing basis and encourages investments and the 3 flow of capital into the housing area. 357 { Since rent control has created the death 4 5 of the housing stock of the City of New York, we ask 6 that these controls be lifted. 7 reason that rent control came into being and support 8 the original concepts. 9 is a relic of a past reality and does not represent We understand the However, the original concept CD :;; 0: 0 u. 10 current or future housing requirements. :.:: (..) 0 1- The suggestion regarding the rent 11 (/) 0: w (/) :5 0 ' 0 0: (!) Unless the City of New York permits these 17 ~ 0: 0 (..) 18 communities to move into the 21st century so they can 19 encourage jobs and investment, all the rent controls 20 placed on these communities will not permit them to 21 survive. w I I- 22 23 24 25 (Written testimony submitted by Sandra L. Devita, Campus Hall Association of Tenants): Good afternoon. I am the president of the Campus Hall Association of Tenants, Inc. All of our ( 1 COMMITTEE ON HOUSING AND BUILDINGS 2 tenants are rent stabilized. 3 important in that it not only regulates the amount of 4 rent a landlord can charge, it also protects tenants 5 from unscrupulous landlords by requiring them to give 6 services. 358 Rent stabilization is When my current landlord became the holder 7 8 of unsold shares, the originally refused to provide 9 maintenance services. We had old ladies flushing 10 toilets with buckets of water because he refused to fix 11 toilets. 12 baths because he refused to repair plumbing fixtures. 13 The elderly and disabled were forced to live in 14 darkened apartments because he refused to repair 15 electrical fixtures and switches. 16 fall on them. 17 We had tenants who could not take showers or Tenants had ceilings And I could go on and on. Had it not been for the rent stabilization 18 code, despite DHCR being pro-large landlord 19 ignoring harassment, lack of services, and overcharging 20 hundreds of dollars 21 the protection of required services. 22 not be harassed out of their apartments. 23 stabilization is very important for this reason. 24 25 -- the tenants would not have had Tenants should Rent Without rent stabilization, our tenants would be forced out on the streets because of their r 1 COMMITTEE ON HOUSING AND BUILDINGS 2 inability to pay high rents. 3 the working class, single parents, young widows and 4 widowers with children, the unemployed, the 5 underemployed, the elderly, the disabled, and the 6 struggling middle class. 7 Therefore, we need rent stabilization. 8 some place to live. 9 important for this reason. 10 359 Our tenants are the poor, We are not wealthy. Everyone needs Rent stabilization is very Tenants should not be forced to prove 11 their income to remain rent stabilized. 12 landlords aren't forced to open their books and show 13 their real profit margin, tenants should not be 14 required to do so either. 15 years so that when they retire and their health started 16 to decline they can obtain the care that they need. 17 Why should the landlord have access to their tenants' 18 hard earned money? 19 important for this reason. 20 If the People work hard for many Rent stabilization is very The overwhelming majority of rent 21 stabilized tenants need their apartments to remain 22 stabilized because without it they would become another 23 face sleeping on the subway or in a doorway or in the 24 shelter system. 25 are forced out of their apartments because of the lack People either cannot pay high rents or 1 COMMITTEE ON HOUSING AND BUILDINGS 2 of essential services. 3 important for these reasons. 360 ( But, 4 Rent stabilization is very just as I am a forthright supporter 5 of retaining rent stabilization, there are people who 6 can well afford to have their apartments partially 7 destabilized. 8 of $2,000 they do not need rent stabilization. 9 wealthy can well afford to pay fair market rents. If a tenant can afford a rent of upwards The 10 These are the people who get all the tax loopholes, 11 while the struggling lower and middle classes pay all 12 the taxes. Let the wealthy pay their fair share by 13 14 paying fair market rents. 15 stabilization laws still protect these tenants in the 16 areas of required and base data services. 17 need this kind of protection to prevent unscrupulous 18 landlords from refusing services or lease renewals to 19 effect a move-out. But let the rent All tenants All tenants should be protected from this 20 21 type of harassment. Although these tenants would be 22 paying the fair market rent for their apartments, all 23 other parts of the rent stabilization code would remain 24 in effect. 25 this reason. Rent stabilization is very important for r 1 COMMITTEE ON .HOUSING AND BUILDINGS 2 361 In conclusion, rent stabilization is 3 important to many tenants for many different reasons. 4 Rent stabilization must continue to protect the rights 5 of all tenants for the right reasons and preserve the 6 lower rents for those who really need them. 7 Thank you. 8 (Written testimony submitted by Elaine 9 Schechter, Perry Street Block Association, Inc.): 10 My name is Elaine Schechter and I am the 11 president of the Perry Street Block Association. 12 also affiliated with a number of other community 13 organizations, although I am not representing them here 14 today. I am For example, I am on the steering 15 16 committee of the Greenwich Village Block Associations, 17 representing 23 block associations and at least 3,000 18 people. 19 Reform Democratic Club; I am a member and former vice 20 president of the West Village Committee; and I am a 21 Democratic County Committee member. I am on the executive board of the Village 22 Twenty-two years ago, when I moved into a 23 rent stabilized apartment on Perry Street, I wrote and 24 published "Perry Street: Then and Now." 25 an ethno- or social history of Perry Street from its This book is 1 COMMITTEE ON HOUSING AND BUILDINGS 2 wilderness days through 1972. In this book, I emphasized the diversity 3 4 362 especially the economic diversity that 5 historically characterized the population of Perry 6 Street. 7 truck drivers and manual labors. 8 however, during the last two decades, gentrification, 9 condo-fication, and co-op conversions have caused Professionals shared back yard fences with Unfortunately, 10 property values and housing costs on Perry Street to 11 soar astronomically. 12 especially the economic diversity 13 has declined. 14 regulated apartments now represent the less well-to-do 15 on Perry Street. As a result, the diversity of Perry Street Only those still living in rent I myself have personally been affected by 16 17 this gentrification. 18 multi-millionaire from Sands Point, Long Island, a 19 magnate who could well have afforded to purchase a 20 vacant, single family townhouse, bought my building at 21 half market value because it was full of rent regulated 22 tenants. 23 removing all the occupants but two 24 another long-suffering neighbor, who has an over three 25 year old DHCR harassment case against my landlord. Four and one-half years ago, a In less than one year, he succeeded in myself and ,/-.. I 1 COMMITTEE ON . HOUSING AND BUILDINGS · · 363 For the past four years, my landlord, 2 3 Arnold Saltzman, has been trying to evict me from my 4 home of 22 years. 5 fraudulent legal papers regarding the personal use 6 clause 7 when in fact he owned it in the name of a corporation 8 9 His tactics have included sending me he claimed he personally owned the building and by conducting a harassment campaign that included breaking into my apartment alleging the co :E a: 0 u. 10 need to investigate the source of a nonexistent leak :.:: (.) 0 I- en 11 changing my locks, and locking me out for three a: w en ~ 12 13 days. During a 13 month renovation for the 14 benefit of his daughter, who took over three and 15 one-half floors of the building, the following services - 16 were frequently interrupted without warning: a: 17 and cold water, electricity and gas. 18 lines were cut repeatedly, in one instance with a 19 clean, sharp instrument directly outside my door, which 20 was not within the construction area. 0 st 0 II) .;, II) N 6 0 ~ heat, hot Cl. ::::> 0 (!) My telephone >co a: 0 (.) w I I- 21 All the partitions separating the areas 22 under construction from the public hallways were 23 removed, and the windows were bashed out, so that 24 anyone could enter from the street or back yard and 25 roam the building at will. The entrance door was left ,,-,. I 1 COMMITTEE ON . HOUSING AND BUILDINGS 2 open and unattended every day during the long hours of 3 construction, and the intercom failed to function most 4 of the time, so that building security was reduced to a 5 virtual nil. 6 capped, and there are no fire escapes, during this 7 period we feared for our very lives. 8 9 . 364 And, since the sprinkler system was The most recent example of this ongoing harassment occurred in September of 1993, when my 10 landlord's son-in-law threatened to "pulverize" with 11 his "fists" my boyfriend, who was quietly reading a 12 book on my stoop while waiting for me. 13 14 15 I make these statements not to garner your pity but to make two points: First, vacancy decontrol, or an increase 16 in the vacancy allowance, would give unscrupulous 17 owners like my landlord 18 guilty last September to felony insurance fraud 19 totalling $610,000 20 longtime tenants like myself, who have deep roots in 21 their neighborhoods. 22 who, by the way, pleaded powerful incentives to remove For example, in order to achieve his own 23 brand of vacancy decontrol, my landlord deliberately 24 reduced the number of units in the building to four. 25 In 1972 there were seven units. Thus, the remaining -- -~ ------- 1 COMMITTEE ON HOUSING AND BUILDINGS 2 two apartments still occupied by rent stabilized 3 tenants, including myself, would be decontrolled if 4 vacated. - 365 For me, the result has been a nightmare of 5 6 unremitting harassment that has destroyed my peace of 7 mind, personal life, and ability to do my work. 8 stubborn victims would have surrendered long ago. Less When long term residents like myself are 9 co :E a: 0 LL 10 forced to leave, the very fiber of the community is 11 shredded. 12 mean neighborhood destabilization. 13 Second: ~ (.) 0 !ii Rent destabilization would absolutely also a: w en ~ 0 st My experience over the past four 14 years illustrates the extreme shortage of affordable 15 housing. 16 community involvement and neighborhood networking 17 would be the absolute first person to hear of vacant 18 apartments to which I could move, should I lose my 19 apartment. 0 I{) .;, I{) (IJ 6 0 "9 Cl. More than anyone I know, I with all my ::::, 0 a: (!) >co a: 0 (.) w :c I- 20 All my friends and colleagues in the 21 community know of my plight. Many friends are, in 22 fact, 23 have known for two decades. 24 only not heard of any affordable apartments, but I have 25 not, in fact, heard of any available apartments at all. small homeowners and townhouse landlords whom I Nevertheless, I have not \ _,. 1 2 COMMITTEE ON HOUSING AND BUILDINGS 366 Judging from the grapevine, the vacancy 3 and turnover rate 4 appears to be negligible. 5 that, as I wrote in my book, Perry Street is in many 6 ways a microcosm of Greenwich Village, and perhaps also 7 of New York City. on Perry Street, at least And it is worthy of note 8 Therefore, it is absolutely essential that 9 the New York City Council pass Intro 215 and Resolution 10 144, extending rent control and rent stabilization, 11 without any weakening amendments. 12 I and the Perry Street Block Association 13 want to thank those members of the City Council 14 sponsoring this bill: 15 Guillermo Linares, Helen Marshall, Martin Malave-Dilan, 16 and David Rosado. 17 Members, such as Tom Duane, Kathryn Freed, Ronnie 18 Eldridge and Andrew Eristoff, who have spoken out on 19 our behalf today. 20 hear you, and we shall remember. 21 Council Members Stanley Michels, We ~lso thank those other Council We on Perry Street are voters. We In closing, I call upon the rest of the I 22 New York City Council to follow these enlightened 23 colleagues' example by supporting Intro 215 and 24 Resolution 144, with no weakening amendment. 25 Street Block Association does not wish to have the The Perry 1 COMMITTEE ON HOUSING AND BUILDINGS 2 distinction of becoming the first block association 3 with a president-in-exile due to eviction from a rent 4 stabilized apartment. 5 control protections from eviction to rent stabilized 6 tenant would also help keep me in my home, where I can 7 continue to serve my community. 10 Therefore, extending rent (Written testimony submitted by Anita 8 9 367 Romm): We are faced with a housing crisis. 11 I would be the last to deny an honest profit to an 12 honest landlord, if there is such a thing, we must 13 insist that those landlords with special problems 14 should open their books. 15 While When greedy landlords put undeserved 16 levels of profits against the interests of people, this 17 is what causes the homeless problem. 18 the vacancy rate, but most vacancies are for apartments 19 ordinary working class mortals can't afford. 20 was young, most homeless people were alcoholic or lazy, 21 but today, when rents are rising above the inflation, 22 and co-oping has been going on, many people become 23 homeless through no fault of their own. 24 25 I hear talk about When I People need housing that they can afford on their incomes. Otherwise, they will have almost r 1 COMMITTEE ON HOUSING AND BUILDINGS 2 nothing to spend on other goods and services, and this 3 will cause loss of jobs. 4 snowball effect, and do you want to be responsible for 5 more people becoming homeless? 6 thinking of a "final solution" to the homeless problem. 7 8 9 (D ~ a: 0 u. 10 ~ (.) 0 I- 11 C/) a: w en ~ 12 13 0 st 0 14 ,,., .;, ,,., C\I 15 6 0 "? ~ a.. 16 ::J 0 a: C!l 17 ~ a: 0 (.) 18 w J: I- 19 20 21 22 23 24 l 25 This will have a Keynesian I hope that nobody is Rent regulation must stay. time to fool around with it. (Time noted: 368 9:30 p.m.) It is not the 1 369 2 3 4 CERTIFICATE 5 6 7 STATE OF NEW YORK 8 COUNTY OF NEW YORK ss. 9 CD :. a: 0 10 I, LINDA BAYLES, a Stenotype Reporter and LL :.:: (.) ~ 11 Notary Public in and for the State of New York, do (j) 12 hereby certify that the foregoing is a true and 13 accurate transcript of the within proceeding. a: w :s 0 14 I further certify that I am not related to CD a: 0 (.) 18 IN WITNESS WHEREOF, w ::i: I- 19 hand this Jo;-(... -- day of I have hereunto set my ¥------ 199.!j_. 20 21 22 /;( (. (2 ~ . ---- b!~_Q°'t---------- 23 LINDA BAYLES 24 25 1 370 .,I 2 3 4 5 6 7 C E R T I F I C ~ T I O N 8 9 CD :; a: 0 u.. 10 I, LINDA BAYLES, a Notary Public in and for :.:: (.') 0 I- en a: w en :5 0 V 0 "',;, "'6 C\I 11 the State of New York, do hereby certify the aforesaid 12 to be a true and accurate copy of the original of my 13 stenographic notes. 14 15 0 "? ~ 16 Cl. ::::, 0 a: C!) 17 >CD a: 0 (.') 18 w I I- 19 20 21 22 23 24 l... _., l 25 ___l~-(!;!¼-1/)/.! ---LINDA BAYLES