Cuomo, Legislature Dismiss Tenants: Rent Regulations Not Included in State Budget

Tenants lobby in Albany two days before the the budget vote.

Governor Andrew Cuomo’s budget is in—and it doesn’t include strengthening or renewing New York State’s rent regulations.

The Legislature finished approving it early in the morning of March 31, as protesters packed the state capitol. The budget, hailed as a shining example of tough-minded fiscal responsibility by New York’s corporate/political/media power elites, dramatically slashes funding for education and health care throughout the state, while ending a tax surcharge on people making more than $200,000 a year. It will almost certainly lead to significant layoffs of teachers and other state workers.

Tenants and some Democratic state legislators had urged Cuomo to include rent regulations in the budget, in order to avoid a last-minute showdown of the kind that weakened rent regulations in 1997 and 2003. The governor hinted that he might do that. But the state Senate’s Republican leadership and the real-estate lobby objected strongly, and Cuomo conceded that the issue was “too complex” to pick a fight on.

That was a big victory for the real-estate lobby, says state Senator Bill Perkins (D-Manhattan). He voted against the budget, calling it “reverse Robin Hood, catering to the most fortunate.”

“The omission is very troubling,” says Assemblymember Linda Rosenthal (D-Manhattan), sponsor of the bill to repeal vacancy decontrol. She thought that including rent regulation in the budget, which contained many items Republicans wanted, was the best way to get it through the Senate, because “it’s been clear for many years that the Senate Republicans have no interest in helping tenants.”

State Senator Liz Krueger (D-Manhattan) also voted against the budget. Her spokesperson, Katie Kincaid, said Krueger was “incredibly disappointed that rent regulation was not included” and also objected to the tax cuts for the rich and the cuts in funding for health care, education, and services for the elderly.

Inez Barron (D-Brooklyn) was one of the few Assemblymembers to vote no. She supported including rent regulation, but was particularly concerned that the budget still didn’t include extra education funds New York City won in a lawsuit against the Pataki administration, says chief of staff Viola Plummer.

What’ s Next?

Where does that leave tenants? With the rent-regulation laws expiring June 15, the objective is to avoid another scenario like that of 1997 and 2003, when the process went down to the last minute, and the Senate Republicans refused to renew the laws unless they were weakened. Also, with vacancy decontrol, fraudulent renovation increases, and the loss of Mitchell-Lama apartments decimating the city’s stock of affordable housing, tenant advocates insist that just renewing the laws is not enough—they have to be strengthened to prevent the system from eroding.

“We have to demand that this not be done on the 14th in the middle of the night,” says Rosenthal. “We have to start working on this now. The governor has said he wants to do this.”

How can that be accomplished? How can tenant activists prevent another last-minute extortion scenario—one that might lead to added loopholes, such as overriding the state court ruling that apartments in buildings that get J-51 tax breaks can’t be deregulated?

“It’s not going to happen from the goodness of the hearts of the governor and the Republicans,” says Perkins. “We are in a weak position now. We’re going to have to fight from that position and win anyway.”

“It’s not going to be decided solely on merit,” says Rosenthal. It might happen by political horsetrading, she says, such as in exchange for continuing the 421-a tax-break program for developers or capping property-tax increases for towns outside the city. The property-tax cap is less likely, she says, as some suburban legislators fear it would hurt local schools.

Kincaid has two words: “Governor Cuomo.” More than 90 Assembly Democrats signed a letter to Cuomo urging him to strengthen rent regulations. If the governor wants it to happen, legislators and staffers say, he’ll find a way to twist the necessary arms.

However, tenant issues have not been a high priority for Cuomo. He did not mention rent regulations in his campaign’s statement on housing policy last year, and real-estate interests were the biggest contributors to his gubernatorial race.

“Despite repeated statements from the Governor that were supportive of including meaningful rent reform in the budget, he ultimately acquiesced to the interests of wealthy landlords and the real-estate industry,” the Real Rent Reform Campaign said in a statement issued after the budget deal was announced.

Some legislators, including Krueger, had said they would try to block the budget if it cut taxes for the rich and did not include rent regulation. That obviously, failed to happen. The Assembly passed it overwhelmingly.

Plummer says that from what she heard, “it almost came down as a vote to support the leadership of the Assembly,” and that many members went along because they felt the cuts “could have been worse.”

Assembly Speaker Sheldon Silver may have also feared a political backlash. Cuomo’s budget, with its tax cuts for the rich coupled with “austerity” as a reason to attack teachers’ pensions and pay, resembles a less rabid version of Wisconsin Gov. Scott Walker’s, but the Legislature has been battered by scandals.

Yet the members who have done the most to give the Legislature its corrupt reputation have been the leaders in blocking pro-tenant measures. Longtime Senate Majority Leader Joseph Bruno resigned in 2008 after his indictment on corruption charges. Senator Carl Kruger of Brooklyn was recently indicted for collecting bribes. Former Bronx Senator Pedro Espada, now facing two sets of felony charges, was recently lauded by Rent Stabilization Association president Joseph Strasburg because his 2009 party switch scuttled the repeal of vacancy decontrol.

“The guy who saved this industry was Pedro Espada,” Strasburg, captured on an unauthorized video, told an RSA meeting in Brooklyn in March. “Everybody makes fun of him because he’s in litigation, but if it wasn’t for him, this industry would have been hit on all those issues.”

Strasburg added that “we took a very strong position last year to support the Republicans in order to get them back into power. Because we had the so-called experiment of two years with the Senate Democrats, who attempted to really hurt this industry.” In the last 48 hours of the 2010 campaign, he said, “RSA—and we’re not ashamed of it—we gave and donated and supported all the Republicans. We basically emptied our piggy bank in order to make sure they recaptured the Senate.”

“It’s corrupt in the broadest sense,” says Rosenthal. “It’s buying influence and buying votes.” But she says tenants can’t give up.

“Stay geared up,” urges Perkins. He was pleased to see so many protesters in Albany during the vote—but to win, he adds, the movement will have to grow “astronomically and quickly.”