Cuomo Openly Sides With Landlords; Wants No Changes to Rent Laws, 421-a

Andrew Cuomo finally said something about the expiring rent laws. On April 21, the governor told reporters that both the 421-a tax break for developers and the rent laws covering New York City and Nassau, Westchester, and Rockland counties should be renewed. Both laws expire June 15. 

Then in an April 24 speech to the Association for a Better New York, chaired by real estate developer Bill Rudin, Cuomo told the assembled business elite that the turmoil resulting from federal probes into legislative corruption might make it hard to accomplish more than renewing 421-a and the rent laws without any changes. “We can’t live without 421-a,” Cuomo told the ABNY members. “Many people want changes to 421-a, and in truth there’s a good case to be made that 421-a does need changes.” He said he would be better able to negotiate if Albany was in “a little bit more of a stable situation.”

The governor is right that the arrest and indictment of former Assembly Speaker Sheldon Silver (D-Manhattan) and investigations of other legislators have upended the 2015 legislative session. Senate Majority Leader Dean Skelos (R-Nassau County) and his son were arrested May 4 on corruption charges. Cuomo is of course wrong that nothing can be done to strengthen our rent-protection laws—the reality is that he has no interest in fighting for that ouutcome.

The governor’s words had to be music to the ears of the real-estate moguls at the ABNY breakfast. A renewal of 421-a is their major goal this year. The landlords would also be happy to see the rent laws renewed in their current weakened form, leaving intact the loopholes that have enabled them to convert 400,000 affordable units to market-rate status over the past two decades.

Tenant organizations have urged the legislature to let 421-a expire. The program gives developers about $1.1 billion in property-tax breaks each year. Less than 10 percent of the apartments built under it are below market rate, and it continues to subsidize glitzy, multimillion-dollar penthouses for sketchy foreign gazillionaires.

Tenant advocates—vigorously demanding that the rent laws be strengthened, not simply renewed—are furious at Cuomo’s carrying water for his real-estate cronies. As Tenant/Inquilino went to press, tenants were preparing to picket the governor’s Manhattan office on May 6, and additional actions were in the works.

 

Heastie stakes out a position to Cuomo’s left

A few days after Cuomo’s ABNY appearance, new Assembly Speaker Carl Heastie (D-Bronx) indicated that he will not be satisfied with a straight rent-law extender, telling reporters, “I’d like to see some enhancements.” He said that the Assembly Democratic conference would discuss rent “pretty soon.”

The role of party conferences in Albany is important to understand. Each party in each house meets every week behind closed doors to discuss what to do about hot issues. Everything is off the record, so legislators can speak candidly. If the topic is especially torrid, staff members are told to leave the room.

It is essential that when this discussion takes place, a large number of members speak up, urging the Speaker to hold firm in negotiations for stronger rent laws. We should be able to ascertain how serious they are by asking friendly members what happened afterwards. 

To win significant concessions, Heastie must use real leverage. There are always things the other side wants in the end-of-session rush. If Heastie does not hold hostage other bills that the Senate and governor want, it is hard to see how he can win much. If he simply goes into negotiations with Cuomo and Skelos, he is likely to end up with a straight extender, or the kind of token “reforms” we won in 2011, the last time Albany renewed the laws. The 2011 renewal bill left vacancy deregulation in place, but raised the threshold for it from $2,000 a month rent to $2,500, a meaningless change that Cuomo and Silver tried to spin as a great tenant victory.

Heastie appears more responsive to Democratic Assemblymembers than Sheldon Silver was. While he was negotiating changes to the state budget, he came back to his conference to consult with them. If the dictatorial Silver had still been Speaker, he would have cut a budget deal with Cuomo and Skelos and then presented it as a done deal.

That is why it is so important for tenants to be pressing their Assembly representatives, even those who are known to be pro-tenant, reminding them that for us to win this year, the Assembly must play hardball—must hold hostage things the other side wants—and must be unapologetic about doing so.

It is probable that serious negotiations on rent will not start for a few weeks, so there is time for tenants to weigh in with their Assemblymembers. 

 

Vacancy deregulation must be repealed 

The most important goal for tenants is to repeal vacancy deregulation, and to re-regulate the units we have lost. Unless we can stop the hemorrhage, the entire universe of rent-regulated apartments will be phased out over the next few years.

Vacancy deregulation creates a strong incentive for landlord abuse and harassment, so as long as landlords can deregulate vacant apartments, they will. First, the big landlords (the Rudins are a perfect example) will spend whatever it takes to get the legal rent on a vacant apartment to the threshold—and many of their stabilized apartments already rent for more than $2,500, so they don’t need to spend anything.

Second, dishonest landlords simply treat vacated units as deregulated. If the new tenant does not file a complaint within four years, they get away with fraudulent deregulation.

Finally, vacancy deregulation enables the predatory business model in which landlords pay unreasonably high prices for rent-regulated buildings, then use every aggressive method possible to force tenants out. None of Albany’s recent enforcement mechanisms will stop them. The only thing that will is removing the incentive-ending their ability to wrest huge profits from these deals if they can empty the buildings.

For all these reasons, tenants must make their representatives in Albany understand why they must fight for the complete repeal of vacancy deregulation. The repeal bill, sponsored by Andrea Stewart-Cousins (D-Yonkers) and most Senate Democrats, and Linda Rosenthal (D-Manhattan) and 44 other Assembly Democrats, would also reregulate any apartment currently renting for less than $5,000 in the city or $3,500 in the three suburban counties. Reregulation would also give basic protections to tenants living in these deregulated units, including the right to an automatic lease renewal.

Tenants are also supporting bills to repeal the automatic 20 percent statutory vacancy bonus; to close the preferential-rent loophole that allows landlords to jump rents hundreds of dollars when tenants renew their leases; to make Major Capital Improvement rent increases temporary surcharges; to reduce rent hikes for Individual Apartment Improvements; and other reforms.

 

Weeks to go

Time is very short. Every reader of this newspaper should take action. Get in touch with your legislators, even if they support tenants and even if you have done so already. Write a letter to Governor Cuomo. Recruit your neighbors. Show up for the rally and march across the Brooklyn Bridge on Thursday, May 14. Get on a bus to Albany on Tuesday, May 27 and/or Tuesday, June 9. And show up at your Rent Guidelines Board meetings. 

For more information, get in touch with Ilana Maier at (212)979-6238 or ilana@metcouncilonhousing.org