By The Editorial Board New York Times
The editorial board represents the opinions of the board, its editor and the publisher. It is separate from the newsroom and the Op-Ed section. Sept. 9, 2018
This is part of a series on what is at stake in New York’s primary elections on Thursday, and in the general election on Nov. 6.
As gentrification and a bloated real estate market intensify New Yorkers’ frantic search for affordable housing and escalate the threat of homelessness, voters can fight back by electing lawmakers willing to break the real estate industry’s grip on Albany.
State lawmakers flush with the industry’s donations have been gutting New York City’s rent regulations for decades, putting hundreds of thousands of rent-stabilized apartments on the open market, driving up housing costs and forcing poor and middle-class New Yorkers out of their homes. Restoring those protections and giving New York City power over its own rent regulations could keep more families housed at a price they can afford.
New York’s system of rent regulation, limiting how much landlords can charge tenants, began in the 1940s to help a growing middle class. There are about one million apartments covered under rent-restricting regulations now, about a quarter fewer than there were in the early 1990s.
The stage was set for this loss in affordable housing in 1971, when the Legislature took control of rent regulation away from New York City by passing the Urstadt Law, which barred the city from enacting rent laws more restrictive than those of the state.
But the most destructive wave of deregulation began in 1993, when the Legislature, under threats from Senate Republicans to end the rent regulation system altogether, created a compromise that deregulated an apartment when a tenant left after the rent had reached $2,000 per month. That was a high rent at the time, and a column in The Times predicted that the measure would create “little change” for tenants. Clearly, that was wrong.
That wave became a tsunami when, in 1997, state lawmakers approved rules that allowed landlords to increase the rent by 20 percent when an apartment became vacant. By the following year, the city was losing three times as rent regulated apartments as before. The measure has proved to be a powerful incentive for landlords to continually push out tenants until a unit’s rent exceeds the state limit and the unit can enter the open market.
Since landlords can be allowed to raise rents to cover the cost of renovations, many make minor improvements that may not be necessary, or they artificialy inflamed the cost of improvements, to inflate rents and inch units closer to deregulation. Though the latter is illegal, the state’s overtaxed enforcement body is largely incapable of holding landlords accountable.
Even when rents are down and market conditions ought to benefit tenants, legislators made sure the law worked to the benefit of landlords. Rent guidelines set the rent a landlord can legally charge for an apartment. Sometimes that’s higher than its market rate, so landlords charge a lower “preferential rent.” Landlords once had to wait for the tenant being charged a preferential rent to move before they could raise the rent to the legal limit. But in 2003, as gentrification was sending real estate values surging across the city, the Legislature passed a law letting landlords raise rents when current tenants renewed their leases, leading to steep, sudden rent hikes for many tenants.
That’s what happened to Amauri Vasquez, who was paying $700 a month for a rent-stabilized two-bedroom apartment in the Bushwick area of Brooklyn when his landlord raised the rent to $1,025. “I can’t afford that,” said Vasquez, 36. “But this is reality. This is what happens every day in Bushwick.”
The combined impact of these efforts has been severe: 284,301 New York City apartments were deregulated between 1994 and 2017, according to city data. During the same period, rents soared. Together, these two trends have put enormous financial pressure on poor and middle-class New Yorkers and helped push some 60,000 people into city homeless shelters. As of this month, that figure include more than 22000 children.
Even a casual follower of America’s corrupt politics would not be surprised that lawmakers who voted to benefit wealthy interests at the expense of their constituents raked in money from those interests. From 2005 to 2013, the New York real estate industry contributed at least $44million to state candidates, committees and PACs. Such largess was made possible in part by a loophole the state Board of Elections created in 1996 that treats limited liability companies as “individuals,” allowing them to donate up to $65,100 a year to any state candidate instead of forcing them to abide by the $5,000 corporate limit.
The money-grubbing has been bipartisan, but the Republican-controlled State Senate has been the landlords’ most reliable friend. So the best chance to strengthen rent laws and protect affordable housing is to deliver Senate into Democratic hands in November and elect reformist Democrats in the primary on Thursday.
Then, here are some actions lawmakers can take:
Overturn the Urstadt Law
Return control of the rent laws to New York City, where it belongs. The city should be able to decide how it wants to regulate rents without getting approval from the state Legislature.
End High-Rent Vacancy Decontrol
Once an apartment’s rent hits $2,733.75, it no longer falls under any rent regulation once the current tenant moves. A fairer system would keep the apartment under rent stabilization and allow for gradual increases that reflect owners’ costs and rates set by the city’s Rent Guidelines Board.
End Vacancy Bonuses
Landlords’ ability to raise the rent by 20 percent every time an apartment is vacated is a perverse incentive for continually displacing tenants to boost an apartment’s rent until it is deregulated. It’s no coincidence that tenant harassment is pervasive in New York City. The company owned by the family of Jared Kushner, the president’s son-in-law, for example, has been accused some misconduct. Lawmakers should scrap this incentive entirely.
End the Preferential Rent Bonus
Landlords should only be allowed to raise rents to the legal limit after a tenant who had been paying a lower rent moves out.
Strengthen the Division of Housing and Community Renewal
This is the state agency that enforces rent laws, and it needs more funding to bring much-needed accountability to a system that is widely abused by landlords. One way would be for the agency to require landlords to submit receipts for improvements to individual apartments to the agency and the tenant. Rent increases justified by such improvements, as well as capital improvements to the entire building, should be made temporary, lasting only until the costs are paid off.
New Yorkers’ votes on Thursday and on Nov. 6 can craft a Legislature devoted to the needs of city residents, not the demands of their donors. That’s how to keep more New Yorkers in their homes