City Hall on rent reform

 

Rent Law Battle Widens Fissures On Both Sides

Real estate and tenant groups grapple with internal divisions

By Adam Lisberg
As time grows short to renew the rent regulations covering one million New York City apartments, both sides are battling for Gov. Andrew Cuomo's ear—and hoping to drive a wedge between each other's supporters.
On one side is the alliance of two large organizations representing city real estate interests, the Rent Stabilization Association (RSA) and the Real Estate Board of New York (REBNY).
While the two groups largely share a worldview, their most pressing issues can diverge: Small landlords want relief from rent laws, while large landowners want to encourage development.
"They don't like each other, but they will stand together to oppose pro-tenant changes to the rent laws," said Michael McKee of Tenants PAC.
Facing off against them is the alliance of Sheldon Silver, the powerful Assembly speaker, and Vito Lopez, who chairs both the Assembly Housing Committee and the Brooklyn Democratic Party.
Both men are stalwart supporters of affordable housing, but while it's the only issue that matters for Lopez, it's one of many interests Silver must juggle as he negotiates with Cuomo and the Republican-led Senate on other topics like a property-tax cap, ethics reform and gay marriage.
"Vito has put forward what he believes the tenant advocates want and what Shelly wants," said REBNY president Steven Spinola. "In the end, everything in Albany is negotiable."
All sides expect the rent laws to be renewed next month, but the battle is over whether to expand them by raising the limits on what apartments qualify for rent regulation—currently, those with rents below $2,000 for tenants making up to $175,000 a year.
That's the ultimate issue for the RSA's 25,000 members, most of whom are outer-borough landlords with 12 to 24 apartments in each building, said the group's president, Joseph Strasburg.
"We think that the existing law as it is works well," Strasburg said. "We think the people who benefit from this law who don't need it should face a means test."
For REBNY, though, rent laws are just one of many factors crimping developers and property owners. They want to renew a program called 421-a that gives large new construction projects a tax break in exchange for setting aside 20 percent of their apartments for affordable housing. They want to blunt the impact of a court ruling that limited rent hikes at Stuyvesant Town. And they want to limit the tax bills of large city properties to 20 percent of their gross income.
"REBNY is overshadowing RSA, and they may have as a priority more 421-a and the [Stuyvesant Town] decision," Lopez claimed. "Strasburg does not even want a straight extender, and the fact that it's going to happen shows a little weakness in RSA, and that people only care about what Spinola wants."
The differing agendas on both sides have already taken a toll. When Democrats still controlled the Senate last summer, negotiators tried to write a giant package bill that extended the rent laws, 421-a and other housing issues, but it collapsed under its own weight. (Each side blames the other for failing to take a good deal when it was within their grasp.)
Similar efforts to include housing issues in Cuomo's first budget this spring also fell apart. While talks have not restarted, everyone expects they will finally be resolved in the grand rush to end the session in June. That means access to the governor will be key, but he has reason—both personal and ethical—to steer clear of key figures on both sides.
Strasburg angered the governor when a heavily edited video showed him telling an audience about Cuomo's negotiating style: "He will do whatever is necessary for himself. If you're in his way, he'll crush you like his father did."
Lopez, meanwhile, is under an ethical cloud as federal probers look into the finances of the Ridgewood Bushwick Senior Citizens Council he founded. Soon after taking office, Cuomo took an unmistakable slap at Lopez by appointing a rival, Brooklyn Assembly Member Darryl Townes, to run his housing agency.
The fissures at the top of each side's leadership also make it hard to predict how Senate Majority Leader Dean Skelos will act, since nothing will be done without his Republican caucus. But both camps claim to be confident.
"The real question is what do the three leaders feel they have to do?" Spinola said. "If there's going to be a discussion and a negotiation, I'm going to be part of that discussion."
"The momentum is in favor of a rent-regulation bill passing," Lopez said. "It's room for some gains on rent regulation."