If We Lose Our Rent Protection Laws, Andrew M. Cuomo Will Be to Blame

About a dozen protesters blocked traffic in front of Gov. Andrew Cuomo’s Third Avenue office May 29, demanding that he support stronger rent laws.EARTH TO PLANET ALBANY: Merely renewing the rent and eviction protection laws in their current weakened form guarantees that they will erode to insignificance over the next few years. If that happens, the finger of blame will point directly at the governor of New York State.

In early June, with less than two weeks remaining before the June 15 expiration of the state laws that limit rent increases and protect tenants from arbitrary eviction, reporters and politicians were predicting that the legislature and governor would not be able to agree on any changes. The result would be what is known as a “straight extender” for another period of time. 

Indeed, Governor Andrew Cuomo has openly called for renewing the laws without changes, claiming that the turmoil resulting from the Sheldon Silver and Dean Skelos scandals makes it impossible to negotiate revisions. The reality is that he has no interest in preserving rent regulation. By repeating the call for a straight extender, he has openly aligned himself with his real-estate buddies. Instead of proposing to end rent regulation, as they have in the past, prominent landlord advocates have stated that the current laws are “working well” and should be renewed. Working well for landlords, they mean. 

In typical Albany style, whatever finally passes will be a deal worked out behind closed doors by the “three men in a room”—the governor, new Assembly Speaker Carl Heastie (D-Bronx), and even newer Senate Majority Leader John Flanagan (R-Nassau), who took over when Skelos stepped down following his arrest on corruption charges.

With Cuomo and Flanagan both hostile to the idea of stronger rent protections, it falls to Heastie to negotiate for tenants. He has stated that strengthening the rent laws is his most important priority. But doing that will require him to refuse to pass things Cuomo and Flanagan want unless they agree to his demands on rent. Otherwise, it is hard to see how the Speaker can win anything significant.

The major priorities for the tenant movement are repeal of the vacancy-deregulation amendments that have already cost New York City and Nassau, Westchester, and Rockland counties 400,000 affordable apartments; re-regulation of these deregulated units; and closing the loopholes that landlords use to jack up stabilized and controlled rents to unaffordable levels.

These loopholes include the 20 percent bonus increase for vacant apartments; permanent, compounded rent increases for building-wide major-capital and individual-apartment improvements; the preferential-rent scam, which allows landlords to raise stabilized rents by hundreds of dollars upon lease renewal; and archaic provisions that require rent-controlled tenants to pay much higher rent increases than stabilized tenants. Tenants want to repeal the vacancy bonus; make major-capital-improvement rent hikes temporary surcharges; stretch out the amortization period for apartment-renovation increases to 84 months and make them temporary surcharges; require landlords to renew stabilized leases based on the lower, preferential rent; and change the rent-control system to reduce increases.

Senate Republicans will vigorously oppose all those changes. They have received millions of dollars in campaign contributions from New York City landlords. And there is no reason to believe that Governor Cuomo will support tenants.

The Real Rent Reform Campaign sent a letter to Heastie on May 29, urging him to stand strong, and to use leverage with his counterparts to win stronger rent protections. (See: Excerpts From R³ Letter to Assembly Speaker Carl Heastie.)

R3 and other tenant groups have stepped up public pressure on Cuomo. On May 28, a small band of protestors stopped traffic for 10 minutes outside the governor’s New York City office, unfurling a banner urging him to support stronger rent laws. Tenants were also planning a June 3 sit-in outside his Albany office, with dozens, as well as some elected officials, intending to get arrested for civil disobedience. 

 

End-of-session issues

Other issues and factors that might figure in to any end-of-session deal include:

The scandals: The indictments of both legislative leaders, and rumors that others are being investigated by U.S. Attorney Preet Bharara, have made many legislators nervous. Senate Republicans in particular have expressed misgivings about horse-trading over the rent laws, as real-estate money is at the heart of both the Silver and Skelos scandals. How can we negotiate when we don’t know who might be wearing a wire? While this fear is a factor, it by no means is an adequate excuse for Andrew Cuomo to destroy the rent laws.

421-a: This boondoggle also sunsets June 15. A tax break for construction of new housing, it costs New York City more than $1 billion per year in lost revenues, and the lion’s share of benefits goes to luxury condos such as the $100 million penthouse in the One57 tower at 157 West 57th Street. The program produces a tiny number of “affordable” apartments, but once the tax benefits expire, the landlord can raise the rents to market rate. Renewing it is a major priority for the Real Estate Board of New York, and, unfortunately, also for Mayor Bill de Blasio, who apparently believes that he cannot build affordable housing without REBNY’s help. 

In early May, de Blasio proposed several reforms to 421-a. While the mayor’s plan contains some good points—he would eliminate condos from eligibility, eliminate the separate “poor door” option, and require a percentage of below-market units in all subsidized buildings—it has fatal flaws. It would increase the required percentage of below-market apartments from the current 20 percent to 25 or 30 percent, but apartments that rent for up to $2,750 a month would qualify as “affordable,” with many fewer for poor and working-class people. The plan would also extend the tax benefits to 35 years, vastly increasing the cost of the program—and tenants would still be evicted when the subsidies end. 

REBNY is supporting the plan. Labor unions are unhappy that builders would not be required to pay construction workers the “prevailing wage,” which de Blasio and REBNY claim would make it impossible to build affordable housing. Gov. Cuomo has embraced this criticism, trashing de Blasio’s plan as “unfair to workers” and a “giveaway” to rich developers. Both are true observations, but it’s hypocritical for Cuomo, who has been showered with real-estate contributions, to make them.

Cuomo’s property-tax cap: This 2011 law engineered by Cuomo caps real-property tax increases outside New York City at 2 percent per year. The tax cap is essentially a gimmick; intended to protect homeowners from being hit with large hikes, it has hurt smaller and poorer school districts. It expires next year, and Flanagan and Cuomo want to make it permanent. But many legislators are unlikely to support such a move unless the law is amended to relieve local school boards of unfunded mandates, requirements the state imposes on them but provides no financial help for compliance. 

Cuomo’s education tax credit: The governor wants to take $150 million per year out of state funding for public education by allowing taxpayers to deduct contributions to private or religious schools from their income taxes. He is aggressively pushing this idea as “parental choice.” It’s actually a scam to enable Cuomo’s hedge-fund billionaire supporters to channel more public money to charter schools. Ordinary taxpayers would not benefit. Flanagan has indicated this is the Senate GOP’s top priority as well. 

Cuomo’s personality: Everyone in and around state government understands that Andrew Cuomo is a bully given to double talk. In addition to dissing de Blasio’s 421-a plan, he has also accused the mayor of raising complicated issues too late in the session. After de Blasio told reporters on May 27 that the governor needs to show leadership on rent and 421-a, Cuomo spent three days escalating his attacks on the mayor. “This isn’t a game,” de Blasio spokesman Wiley Norvell finally responded. “More than two million New Yorkers are depending on stronger rent laws to afford their rent. And tens of thousands of families are demanding an end to tax breaks that don’t give us affordable housing in return. We need leadership. We need results. Not misdirection and evasion.” Chris Smith of New York magazine quoted an unidentified Cuomo ally on May 29 asking, “Jeez, can’t Andrew not be a dick to Bill just once?”

Teacher evaluation: Cuomo succeeded in getting a new evaluation system for teachers and principals that would emphasize students’ test scores put into the state budget, but  Democrats and some GOP senators want also want to delay the new evaluation system for teachers and principals which Cuomo succeeded in negotiating in the state budget, have called for delay. Mayoral control of New York City schools also sunsets this year, but it seems likely that will be renewed without much contention.

Airbnb: This multibillion-dollar-business has spent millions of dollars in New York City and Albany on advertising and lobbying in an attempt to gut the laws preventing short-term rentals of residential apartments. If they succeed, thousands of apartments will be converted to de facto hotels, allowing landlords to rent them out for days at a time, and for much higher rent than they can collect under rent stabilization. Tenants and legislators need to keep an eye out for this zinger.

The Roberts decision: The landlord lobby is still looking for a chance to overturn the state Court of Appeals’ 2009 Roberts v. Tishman Speyer decision, that landlords could not deregulate apartments while receiving city J-51 tax subsidies. This decision returned somewhere between 40,000 and 80,000 illegally deregulated units to rent stabilization. We must be vigilant to prevent a provision that would reverse this from finding its way into a renewal bill.

Length of the extender: The Assembly passed a bill renewing the rent and co-op laws for four years, to 2019, even though tenant advocates had made it clear to Heastie and Housing Committee chair Keith Wright that we wanted no longer than a two-year extender. As 2019 is the year after the next gubernatorial election and two legislative elections down the road, it would be the worst possible year for tenants in terms of leverage. 

Minor reforms: The last time the rent laws came up for renewal in Albany, there were no givebacks to landlords, for the first time in 18 years. There were a few tinkering-around-the-edges reforms, such as raising the threshold for deregulation from $2,000 to $2,500 rent. But the bill left intact the loopholes that enable landlords to remove vacant apartments from regulation and raise regulated rents to the point of unaffordability. Cuomo tried to spin this as the strongest rent law since the Emergency Tenant Protection Act of 1974, but that’s wrong, and not just because the Omnibus Housing Act of 1983 contained much stronger provisions. Another “victory” like 2011, and it will be all over for rent regulations.

 

The end game

Time is short. What can you do? You can come to Albany with us on Tuesday, June 9, and help us take over the joint. We need a massive turnout. Let your legislators, especially your Assemblymember, know that you expect them to come home with a victory for tenants! We are counting on the Democrat-led Assembly to stand firm, to play hardball with the Republican-led Senate.

Visit: www.strongerrentlaws.com to get talking points and call your representative. Write Governor Andrew Cuomo (address: Albany, New York 12224) and give him a piece of your mind. For information: Ilana Maier (212) 979-6238 or ilana@metcouncilonhousing.org.