Why Do Rent-Stabilized Owners Deserve A Break? Op-Ed

| 25 May 2015 | 02:01

    In his recent op-ed, “Memo to de Blasio: Give a Break to Rent-Stabilized Owners” (April 30), the underlying theme of Mr. Strasburg’s argument for the real estate industry that he lobbies for is simply industry greed over human need. Even he seems to admit that rent-stabilized apartments are the single greatest, if not the only, main preserver of affordable housing for New York’s middle and working classes and number approximately a million rental units.

    From there Mr. Strasburg’s logic and claims get distinctly one-sided and profit- driven. He ignores the rampant vacancy deregulation by owners who will conjure any investment costs for vacancies to raise monthly rents beyond the $2,500 threshold to deregulate them. He omits the fact that thousands of apartments have been arrogantly removed or simply unlisted by owners from regulation (stabilization), while new tenants risk their tenancies if they inquire why or complain that a building with over five units is NOT regulated. Mr. Strasburg also spins the old disingenuous and discredited “trickle down” economics to promise jobs and “improved” housing stock, if only owners are given more perks, write-offs, incentives and tax breaks at the public’s expense.

    He wants corporate welfare and government largesse on the scale of another rich, profitable and powerful industry, the petroleum industry! He ignores that landlords regularly use the MCI route (Major Capital Improvements) to increase rents far beyond annual guidelines. Owners having real financial trouble can get hardship relief, but they want to avoid the bureaucratic application headache that tenants must regularly endure, and by letting maintenance lag so that problems add up and can be called an MCI project, landlords get rents raised ever more towards the deregulation threshold.

    MCIs are regularly and routinely rubber-stamped by the compliant and complacent rent regulatory office, the DHCR or HCR, which has become a “captured” agency, that is, a regulatory office that is infiltrated, influenced and corrupted by the very industry interests that it is meant to regulate, trumping public interest and regulatory responsibilities. The DHCR, from the top commissioner to the judicial administrators right down to those dealing with the public on a daily basis, ALL cater, coach and coddle landlords and serve real estate interests over the increasing plight of tenants. The DHCR even allows MCI increases on converted (condo) buildings, which does nothing to improve housing stock and everything to help owners sell apartments out from under regulation --with the added costs put on the backs of remaining tenants.

    The DHCR employs an industry-supported de minimis list for tenant complaints that they consider beneath its concern or interest —so that landlords can get away with further reduced or eliminated services. In converted buildings landlords avoid their regulatory responsibilities by allowing newly installed condo boards of sold units to abuse and restrict remaining tenants, doing landlord bidding against tenants’ rights and services. The unfair double standard continues even when the DHCR makes a decision. It goes into effect even if tenants file timely appeals, but DHCR orders are held up if a landlord appeals. And don’t forget, tenants have to spend thousands of dollars out of their own pockets to protect their homes and defend their rights while landlords write off legal expenses as a cost of doing business.

    Industry-wide surveys have shown the average landlord makes $600 profit per month on every regulated unit. My landlord, who owns some 70 buildings, 11 or 12 of which have been converted, averages $800 profit per month on our regulated units. These vast profits are just the cash flow, never mind the many other profitable benefits real estate ownership is leveraged for —and tenants don’t even get interest on our security deposits any more! For decades the annual rent increases have been far in excess of owner’s costs, yet industry greed only grows and landlord demands multiply. The most ridiculous doublespeak Mr. Strasburg makes on behalf of his industry is that “owners of rent-stabilized apartments contribute greatly to preserving and protecting existing affordable housing,” when in fact, they do everything in their power to eliminate, destroy and deregulate “affordable housing.”

    Meanwhile, democratically speaking, tenants are locally disenfranchised, the City Council is made impotent, and Mayor de Blasio has his hands tied concerning fair rental regulatory issues all because the Urstadt Law keeps authority in dysfunctional Albany, which is conveniently influenced by big-contributing landlords, developers and real estate industry interests (which Governor Cuomo doesn’t seem to mind at all). We should only be so very lucky as to have the city’s housing stock “back to the bad old days of the late 1970s and 1980s,” when Mr. Strasburg’s Stabilization Association and its Conciliation and Appeals Board were actually held accountable for regulatory practices and were not able to buy off Albany politicians and influence DHCR regulators to promote rapacious practices and parasitical greed against the public necessity and human need for housing in our city.

    Edward Maloney, a resident of the Upper East Side, has been active in tenant issues in Washington, D.C. and New York for more than 40 years. He is the co-chair of his tenant association.