Expiring Rent Laws Again Head for Final Hours

On May 24, Governor Andrew Cuomo stood with leaders of both houses of the New York State Legislature to announce the outlines of a deal to extend rent regulations and tie them to a measure limiting property tax increases outside New York City.

Details were unveiled about the agreement on how to limit property taxes, a Republican proposal that most had expected would go nowhere in the Democratic-controlled Assembly. But when it came to rent protections, which are opposed by the Republicans who control the state Senate, it seemed as if little had been resolved. The current rent-regulation laws, which shield over 2 million tenants from steep rent increases and arbitrary evictions, are set to expire on June 15.

Cuomo said at the press conference that “the final agreement will have rent regulations and a property-tax cap,” but when asked what changes may be made to the rent laws, he said, “we are not announcing an agreement on that today, because we don’t have an agreement on that today.”
Senate Majority Leader Dean Skelos (R-Nassau) quickly tried to spin the announcement, saying that there was no understanding that the Senate would do anything more than extend the laws in their current form—leaving intact loopholes such as vacancy decontrol which let landlords deregulate tens of thousands of units every year.

Skelos had already stated his openness to extending the rent-regulation laws in their current form back in March, at a point when Democratic opposition seemed like it would doom the property-tax cap, as had happened in previous years. At that time, a deal on the state’s budget hadn’t even been worked out.

Did the prospects of winning stronger tenant protections brighten when the Assembly agreed to give Republicans the tax-cap bill they’ve been calling for? The implications of this deal remain very unclear. It’s possible that the announcement of an understanding in May was premature.

Deal or No Deal?
Few Democrats other than Cuomo have supported capping property taxes, so when Assembly Speaker Sheldon Silver (D-Manhattan) acquiesced, it surprised many. Outside New York City, property taxes provide the bulk of the funding for public schools, and they are also key to infrastructure projects and public services.

High property taxes are certainly a major issue in many communities, as they squeeze out working-class and middle-class families, just as high rents do in New York City. Like sales taxes, they inherently take a bigger toll on lower-income families.

The fundamental problem, however, comes from a school-funding formula that forces districts to raise the bulk of their budgets locally, usually from property taxes. That is one of the primary reasons why education resources are so imbalanced. Wealthier communities can collect more taxes to pay for better schools. Lower-income communities can’t.

Raising funds through property taxes also perpetuates this disparity by locking out families unable to afford to stay in better-off areas. Raising these funds through progressive income taxation would ease the burden on lower-income families and shift it to people who can afford it more.

The proposal unveiled in late May would limit property-tax increases to 2 percent annually. It was not accompanied by any other tax-code changes to make up for lost revenues, nor a plan to revise the school-funding formula and take the burden off local governments. It would be enacted amid a political climate of severe budget-cutting and avowed resistance to any new taxes by Cuomo and Republican lawmakers.

Democratic lawmakers and teachers unions argued that a tax cap alone would only force cuts that would hurt public school children and municipal workers. The bill would permit localities to override the cap with a 60 percent vote. Wealthy areas are expected to do so, while poorer areas are not. The New York Times called the tax cap “an invitation to disaster,” saying that a similar measure “ravaged California,” and that in New York, it “would do huge damage to already struggling schools and the state’s long-term economic competitiveness.”

The price for Republicans to get the bill, Skelos tried to argue, was an agreement to do what everyone already expected as the minimum on rent regulations: Extend the protections a few more years, and only for tenants who are already covered.

Both major landlord lobbyist groups, the Real Estate Board of New York (REBNY), and the Rent Stabilization Association (RSA), have said repeatedly in the past few months that they consider a renewal of the existing rent-regulation laws to be almost a given, and that they’re not fighting against that, only against measures to strengthen the laws.

“We think that the existing law as it is works well,” RSA president Joseph Strasburg told the newspaper City Hall. The article, published just before the agreement to link rent regulations with the property tax was announced, stated that “all sides expect the rent laws to be renewed next month.”

Within a day of the announced deal, Speaker Silver stepped up his rhetoric, telling the Daily News that simply extending the laws as they are is “not acceptable.” He maintained that that the Senate should pass what the Assembly did in April—a bill that would eliminate vacancy decontrol entirely, extend protections to the extremely vulnerable tenants in buildings that leave the Mitchell-Lama and project-based Section 8 program, and enact other pro-tenant reforms. He acknowledged that there would be negotiations on the content of the final bill.

With Cuomo, Skelos, and Silver on the same script for the first time with the tax-cap proposal, the public jostling over the content of the rent-regulation bill stands in sharp contrast. Cuomo’s nonspecific call to “extend and strengthen” the laws hasn’t instilled confidence among some Democratic lawmakers.

On June 1, members of the Black, Puerto Rican, Hispanic, and Asian Legislative Caucus held a press conference to express frustration with Cuomo’s vague statements that don’t indicate how he would revise the rent laws and his failure to make rent-law reform a top priority. That failure contrasts with his consistent stumping for the property-tax cap, ethics reform, and legalizing same-sex marriage.

“Keep us in our house and we’ll keep you in yours,” said Assemblymember Eric Stevenson (D-Bronx). “Take us out, and we take you out.”
Cuomo’s first major statement on rent regulations came in a two-minute policy speech, released via the Internet on May 16, where he declared support for rent regulations, but avoided mentioning any specific provisions to enhance them, such as repealing vacancy decontrol. “Please contact your state legislators and urge them to extend and strengthen our state’s rent laws,” he said at the close of the video, hoping to turn attention away from his role in the process.

At the June 1 press conference, Senator Adriano Espaillat (D-Manhattan) argued that Skelos would bend if Cuomo exerted pressure. “Muhammad Ali said, if you don’t think I’m heavyweight champion of the world, why don’t you get in the ring and tell me so…. I don’t think Skelos wants to get into a fight with the governor right now.”

Tenting Tenants
Tenant activists turned up the heat on the governor, pitching tents in areas they dubbed “Cuomovilles” in various city neighborhoods starting on May 24. The protests were geared at highlighting the depletion of affordable housing caused by deregulating apartments. The first site was in Downtown Brooklyn and lasted two days, followed by Woodside in Queens, and Chelsea, City Hall, and Washington Heights in Manhattan. Activists slept overnight in some locations.

Unlike with other hot-button issues, Cuomo doesn’t relish being perceived as the pivotal character in the rent-laws fight. His ties to real estate pose a conflict with his need to deliver on vital rent legislation for his Democratic base. He may be counting on a perception of the Senate as uncompromising and unmovable on this issue to lower expectations—or to cut a deal that involves some pro-tenant measures and some givebacks to landlords.

The idea that the Senate can’t be made to swallow a bill to strengthen rent regulations doesn’t fit with the image as a uniquely adept negotiator that Cuomo has worked to cultivate. Crain’s, joining the governor’s editorial cheerleading squad, recently praised the “masterful job by Mr. Cuomo” of breaking the Albany deadlock. When the state passed an on-time budget with steep cuts, numerous pundits declared that the intractable “three men in a room” deal-making culture of Albany (composed of the governor, the Assembly speaker, and the Senate majority leader) had been replaced with “one man in a room”—Cuomo alone. He got nearly everything he wanted in his budget, with few compromises, none regarded as significant.

The fight over the rent laws is one that Cuomo is eager to have go away. The role of tenants, therefore, is to make clear that the issue will not fade—and in fact will only grow larger—as long as we’re losing apartments through deregulation. As always, it’s essential that tenants send a strong message that we’re willing to fight for our tenant protections.