Tuesday, July 24, 2012

J-51 Stalemate: Will tax break trump rent reform?

from Met Council on Housing's Tenant / Inquilino













Published July 2012

For once, tenants and their allies in the state legislature had some leverage this year.

The J-51 tax-subsidy program for landlords expired last December 31. The program was designed to help owners make fire and safety improvements to rental buildings, but it now is largely a giveaway to landlords and market-rate housing. Since then, the city of New York has not been able to give out any new J-51 subsidies. (Existing J-51 contracts are not affected.)

Pro-tenant state legislators and tenant advocates set out to do two things during the 2012 legislative session: to direct J-51 subsidies away from market-rate housing and toward truly affordable projects, and to use renewing the program to win pro-tenant changes to the rent-regulation laws.  [color added]

In the spring, Assembly Speaker Sheldon Silver (D-Manhattan) looked tenant advocates in the eye at a meeting and pledged that his house would not renew J-51 unless the Senate Republicans agreed to significant reforms to the rent laws. The city of New York weighed in with a bill that included some good but modest reforms, by making high-value co-ops and condos ineligible.

The real-estate lobbyists played a rope-a-dope game, claiming that they did not care if J-51 was renewed. In fact, this subsidy, now more than $250 million and growing every year, is important to them.  

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