The fight is fluid: Tenants, landlords continue to push rent regulation agendas as time runs out

The laws expire June 15
By Kathryn Brenzel and Georgia Kromrei | June 06, 2019 03:00PM

From left: Governor Andrew Cuomo, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins (Credit: Getty Images and iStock)

From left: Governor Andrew Cuomo, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins (Credit: Getty Images and iStock)

With less than two weeks until the state’s rent regulation laws expire, landlords and tenants took dramatically different approaches to pressure legislators to take action.

Tenant groups swarmed the Capitol on Tuesday, blockading the Assembly and Senate chambers and the governor’s office to demand that officials approve a nine-bill package to reform rent regulation laws. Meanwhile, landlords and their representatives quietly vied for facetime with lawmakers alongside other lobbyists.

The fight over rent regulation this session arguably represents the biggest threat to landlords at the state level since the expiration of the tax break 421a — and much more is at stake for both tenants and the real estate industry this time around. Landlords argue the proposals on the table — which include the elimination of the Major Capital Improvements (MCI) and Individual Apartment Improvements (IAI) programs, vacancy decontrol and vacancy bonuses — will mean the deterioration of New York City’s building stock. Tenants are energized at the prospect of shedding these programs, some of which have been the subject of allegations of abuse and fraud over the years.

Though the rent laws expire in nine days, that deadline is increasingly looking like a moving target. According to insiders, the fate of the nine bills is still in play, with all stakeholders jockeying to influence lawmakers. There’s a growing feeling among those on both sides of the debate that the changes will not get resolved before the June 15 deadline. Some who are closely watching the remainder of the session unfold have indicated that officials seem to be eager to shift blame for the lack of progress as time runs out.

“It’s a game of chicken between two trains,” one real estate source said.

In a statement late Tuesday, after a day filled with raucous tenant protests that saw the arrest of 61 people, Senate Majority Leader Andrea Stewart-Cousins said that the Senate has enough votes to pass all nine bills. The statement was quickly amplified by tenant groups on social media, eager to declare victory.

“Following a long discussion within the Senate Majority Conference, it is clear that we have support for all nine priority housing bills,” Stewart-Cousins said in a statement.

While the unqualified statement of support projected consensus on the nine bills in the upper house, those discussions are still going on— and changing by the day.

“Stewart-Cousins didn’t want to go into all the details,” Senator Julia Salazar said. “On a daily basis it is evolving. She didn’t want to say anything misleading or that could possibly have some impact.”

Gov. Andrew Cuomo cast further doubt on the state of the bills. In a political dare, he released a statement on Wednesday calling on the Senate to immediately pass the measure if they truly had enough votes, vowing to sign it on the spot.

“You need to know what the Senate can actually do,” he said. “Can you pass eight? Can you pass seven? What modifications do you need?”

Stewart-Cousins and Heastie responded a few minutes after Cuomo’s challenge with a vague joint statement in support of passing the “strongest rent package ever.”

Jay Martin, executive director of landlord group Community Housing Improvement Program, said his organization doesn’t believe there are “enough votes to pass the bills in either house and will continue to be working to educate elected officials over the next few days.”

When asked about discussion surrounding MCIs and IAIs on Monday, Sen. Michael Gianaris, who is a primary sponsor on a bill that seeks to eliminate MCIs, said the Senate hasn’t reached an agreement on whether or not to reform these programs instead of abolishing them altogether.

“We haven’t come to a conference consensus on that specific piece of the nine bill package, but I’m continuing to fight for complete elimination,” he said. “There’s three entities that need to agree, ultimately, for a bill to become law. And [Cuomo] is one of them. So obviously, his opinion is going to influence the outcome.”

“I do recognize that the push to eliminate is weaker right now than the push for reform,” Salazar said. “But I’m going to keep pushing for it. The fight’s not over, especially since Stewart-Cousins did not qualify her statement of support for the nine bills.”

Martin said making rent increases under MCIs and IAIs temporary — as both Mayor Bill de Blasio and Cuomo have suggested — would be a “nonstarter” and would prove to be a “logistical nightmare” in terms of figuring out what portions of renovations would apply to individual tenants. He said his group would be open to discussing limiting the dollar amounts on renovations per year.

The most contentious bill, Good Cause Eviction, would grant guaranteed lease renewals to tenants statewide — irrespective of rent regulation status — and limit rent increases on renewal leases. The bill is sponsored by Syracuse Assemblywoman Pamela Hunter. But another Syracuse Assembly member, William Magnarelli, strongly opposes the legislation as it is currently written. According to Magnarelli, all he has seen so far is discussion — and he is waiting to see what changes are made in committee before he weighs in.

Magnarelli, who is also a real estate attorney, said he does not think the bills would clear either house the way they are written now, and he was not swayed by the tenant protests, which he characterized as going too far.

“I don’t think people were moved toward what they were chanting for,” Magnarelli said. “We all noticed them, and it’s not that they don’t get your attention, we know it’s a subject we’re trying to deal with. People protest, it’s what they do.”

The Big Ugly

As the June 15th deadline looms, it appears increasingly likely that the nine bills will lumped into what is known as the “Big Ugly.” Rolling bills together that have little to do with each other sets the stage for a more volatile political situation — with interest groups potentially being pitted against one another — and it also means the governor would have more say in the negotiations.

The New York State Constitution stipulates that no bill can be passed unless it has been printed and been on the desks of members in its final form for three legislative session days. With rent laws expiring on June 15, that means the negotiations would have to be concluded by Tuesday June 11, which is one thing Assembly members seem to agree is unlikely to happen.

Assembly housing committee chair Steven Cymbrowiz noted early on Tuesday that the lower house put forward 15 bills — not just the nine. He said they are “very complicated issues, and we’re discussing each one.” At the time, he wasn’t sure whether the measures will ultimately be lumped into the end of session omnibus bill.

“The governor has made it clear that the negotiations will take place with him. So, whatever form that takes, we’ll see at the end,” he said. “The Assembly would like the tenant package to come up by itself. What happens at the end, we’re just not sure. I just hope one thing doesn’t get traded for another.”

He said there will be some changes to one of the most controversial measures in the package, the “Good Cause Eviction” bill, in order to implement “stronger tenant protections.” He wouldn’t specify what those changes would look like.

Cea Weaver, campaign coordinator for the Upstate Downstate Housing Alliance, said that tenant advocates are doing everything they can — even getting dozens of tenant protesters arrested— to pressure lawmakers to pass the bills without delay and avoid the Big Ugly.

“Omnibus would functionally give Cuomo a seat at the table — which gives real estate a seat at the table,” Weaver said. “The longer it goes on, the harder it is to believe the Senate and Assembly are engaging in two-way conversations.”

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