Rent Control, Rent: Is It Too Damn High? :
With the Legislature returning for its final few days on Monday, Gov. Andrew Cuomo, Assembly Speaker Carl Heastie and state Senate Majority Leader John Flanagan pressed on Sunday their rent law proposals as the Monday deadline for new laws nears.
Cuomo sent out a statement shortly before 11:15 a.m., saying the state Senate’s 8-year extender proposal for New York City’s rent laws was unacceptable because it didn’t include improvements to current law, poses new hurdles for tenants and reduces tenant protections.
But in the same breath he called the Senate’s bill noteworthy because it at least proposes an extender rather than just letting the laws expire at the Monday deadline.
“As I have said all along and repeated in a letter to New York City landlords, I will not allow the Legislature to leave town until the rent laws are resolved and at the end of the day the rent laws will be in place so landlords and real estate speculators should not seek to exploit any apparent lack of clarity in New York City’s rent laws,” Cuomo wrote. “Any such speculation would be futile and possibly actionable as tenant harassment. The only question now is what improvements the Assembly and Senate can agree on.”
The comments may have prompted a statement from Assembly Speaker Carl Heastie just an hour later. In his statement, Heastie patted the Assembly on the back for passing two weeks ago a rent regulation proposal supported by Cuomo, New York City Mayor de Blasio and tenant advocates.
“Only the Senate is standing in the way of these new laws which are crucial to millions of New Yorkers,” Heastie said. “I call on Governor Cuomo to stand with us in calling on the Senate to end their blocking of these crucial laws.”
Heastie then went a bit further. Without explicitly mentioning it, he signaled that the property tax cap, which was linked to rent laws in 2011, needs to stay out of this year’s deal. Assembly Democrats have opposed the cap. Cuomo and the GOP-led Senate want an extension of the cap for as long as politically possible. The governor also has apparently talked about linking rent to the Education Investment Tax Credit.
“Rent laws should stand on their own merit and must be done independent of any other issues the Governor or the Senate may be advancing,” Heastie said.
Flanagan pushed the tax cap and potential reforms that would make rent-regulated tenants verify their income and that their rent-regulated apartment is their primary residence.
“It’s time to fix New York City’s affordable housing challenges,” he said. “Our conference does not view the June 15 deadline as imperative to simply extend the rent laws, but as an opportunity to reform — a chance to repair what is broken so we can encourage new construction and provide affordable housing to New York City residents who truly need and deserve it.”
The game of chicken happening just a day before the rent regulations expire is unsurprising for a Legislature that often takes key issues down to the wire.
Measures are being taken just in case nobody blinks before midnight Monday, though.
In his aforementioned letter to landlords, Cuomo made clear that any rent laws passed after June 15 would be retroactive to that date and current leases for rent-stabilized unites aren’t null just because the laws expire.
“I have told the legislature in no uncertain terms that I plan to take drastic action should there be delay in enacting new rent stabilization laws,” Cuomo wrote. “Landlords of our rent-stabilized units should hear a similar message and act as if the current rules are in force until the new rent stabilization package is authorized. Landlords who improperly attempt to use any brief lapse in the rent stabilization laws to gouge tenants on rents, engage in deceptive business practices, or threaten tenants with eviction due to the lapse, will face enforcement actions to the full extent of the law.”
Legislators are making emergency preparations, too. Late Friday, Assembly Housing Chair Keith Wright, D-Manhattan, introduced an emergency extender that would give lawmakers until the end of session (June 17) to do something about the rent laws.
Cuomo’s full statement follows:
On Friday night, the Senate proposed an 8-year extender to New York City’s rent laws. The law differs from my proposal in a number of significant ways which makes it unacceptable because it does not include the necessary improvements on the existing law, its poses new hurdles for tenants and it reduces tenant protections. However, the bill is relevant and noteworthy in one way. The State Senate has offered an 8-year extension of the current rent laws as opposed to letting them expire.
As I have said all along and repeated in a letter to New York City landlords, I will not allow the Legislature to leave town until the rent laws are resolved and at the end of the day the rent laws will be in place so landlords and real estate speculators should not seek to exploit any apparent lack of clarity in New York City’s rent laws. Any such speculation would be futile and possibly actionable as tenant harassment. The only question now is what improvements the Assembly and Senate can agree on.
The Heastie statement:
Two weeks ago the Assembly passed a comprehensive bill to renew and strengthen rent regulations which was supported by Governor Cuomo, Mayor de Blasio and tenant advocates. Only the Senate is standing in the way of these new laws which are crucial to millions of New Yorkers. I call on Governor Cuomo to stand with us in calling on the Senate to end their blocking of these crucial laws.
Rent laws should stand on their own merit and must be done independent of any other issues the Governor or the Senate may be advancing.
New York City’s current rent regulation system is broken and too often hurts the very people it is supposed to help.
That’s why any extension of the rent program must include meaningful and systemic reforms which eliminate the abuses that exist, and create a better path to affordable housing in New York City.
To be clear, Senate Republicans recognize that affordable housing is a statewide issue and we are committed to finding a solution. After all, it was our conference that pushed so hard to enact a two-percent property tax cap and created the STAR property tax relief program and the STAR rebate checks. The property tax cap has been a tremendous success, and has saved taxpayers Upstate, in the Hudson Valley, and on Long Island $7.6 billion since it was first enacted. Without a property tax cap in New York City, the property tax levy rose 7.7 percent in city fiscal year 2014. Since 2010, the average tax paid by residential homeowners there has increased by $1,000. That’s why the state has been forced to create tax incentives there to overcome the high taxes and high building costs which are an impediment to our efforts to encourage affordable housing. Even the Assembly Majority acknowledges that the tax system in New York City is broken and they announced they will be doing hearings on the issue.
As it stands now, the rent control system in New York City fails to encourage new affordable construction or ensure the limited supply of rent-controlled and rent-stabilized properties help those who need them the most, or offer any incentive for landlords to make necessary improvements. Tenants who are fortunate enough to get a rent-controlled apartment rarely leave, and as a result there is little turnover in the limited housing available, putting further pressure on the affordable housing market.
There are a number of reforms we could put in place right now to strengthen the City’s rent laws, including a provision that requires individuals in rent-regulated apartments to verify their income — similar to a provision that makes homeowners across the state recertify their income to qualify for STAR benefits. At this time, no such income verification system is in place for those who reside in rent-regulated apartments in New York City. If the goal is to provide affordable housing to those individuals who need it the most, rent-regulated units should not be occupied by the wealthy.
Additionally, there is no way to verify that a rent-controlled apartment is, in fact, a renter’s primary residence, and still that property can be handed down to family members in perpetuity. No one should be occupying a rent-regulated unit if it is not their primary voting residence.
It’s time to fix New York City’s affordable housing challenges. Our conference does not view the June 15 deadline as an imperative to simply extend the rent laws, but as an opportunity to reform – a chance to repair what is broken so we can encourage new construction and provide affordable housing to New York City residents who truly need and deserve it.