TRD exclusive: Ahead of consensus, Senate mulled watered down rent regulation reform package

Just one day before the state Senate said it reached a consensus on the nine-bill rent regulation package, officials were still considering proposals that would significantly water down some of the proposed measures.

Among the alternate proposals were reforms to Major Capital Improvements and Individual Apartment Improvements — rather than the complete elimination of the programs — and a dramatically different version of the “Good Cause Eviction” bill, the piece of legislation that landlords fear most. Documents reviewed by The Real Deal show that before Senate Democrats announced that they’d reached a consensus on Tuesday, blunted versions of the bill package were on the table.

“These are ideas from previous discussions,” Mike Murphy, Senate Democrats spokesperson, said in a statement. “Our internal deliberations always involve a healthy exchange of ideas and options before we make a conference decision.”

According to the documents, the Senate discussed capping rent increases through MCIs at 2 percent. The proposal would have also limited MCI renovations to “essential building functions” like heat, plumbing and window replacement, and would exclude maintenance work. Rent increases would expire after 30 years, the documents show.

For IAIs, the documents detailed a proposal that would limit the cost of renovations to $15,000 and cap the number of IAIs permitted to one every 10 years. As with MCIs, rent increases would expire after 30 years. Gov. Andrew Cuomo and Mayor Bill de Blasio have both shown support for reforming — not eliminating — these programs, as a way to ensure that building owners aren’t deterred from investing in their properties. In recent days, real estate groups have also publicly indicated a willingness to discuss changes to MCIs and IAIs.

During an interview on Monday, before Senate Leader Andrea Stewart-Cousins announced that a consensus had been reached, Sen. Michael Gianaris told TRD that reforms to MCIs and IAIs were still being discussed. He indicated that he was still fighting for the abolishment of these programs.

“There’s always a lot of talk in different directions,” he said. “I continue to believe that eliminating the programs would be in the best interest of the tenants of New York. That’s what I’m fighting for.”

On Thursday, a spokesperson for Gianaris referred TRD to Stewart-Cousins’ Tuesday statement.

Jay Martin, executive director of landlord group Community Housing Improvement Program, said caps on IAIs have to be tied to “real world costs. Fifteen thousand dollars wouldn’t even cover a complete kitchen renovation, let alone bathroom, flooring and electrical.”

The documents also include a recommendation to change the name of “Good Cause Eviction” to the “Housing Security and Protection Act.” In the changed version, an “unreasonable” rent increase would be anything above 3.5 percentage points plus the regional Consumer Price Index, which would effectively set the threshold at a 5.7 percent rent increase (based on last August’s CPI of 2.2 percent). The original version of the bill prevents tenants in market-rate apartments from being evicted for not paying an “unconscionable” increase in rent, which is defined as 1.5 multiplied by the regional CPI, so a 3.3 percent rent increase cap this year. The changed version of the bill also proposed exempting high-rent households, defined as those with rents exceeding $2,500 in New York City, $2,000 in Nassau, Putnam, Rockland, Suffolk and Westchester counties and $1,250 in Dutchess, Orange and Ulster counties.

Asked about the Senate’s proposed changes, Sen. Julia Salazar took issue with the carveouts.

“I think that these thresholds exclude the tenants who need these protections the most. They’re unnecessarily low,” Salazar said.

Salazar, who campaigned on a universal rent control platform, said she thinks making concessions on her bill should be reserved for small landlords who are not making big profits.

Martin, of CHIP, also took issue with the tweaked version of the Good Cause bill. “That’s lipstick on a pig,” he told TRD. “The housing issues upstate are economic and jobs related. This bill would further exasperate already underserved housing markets. New York needs more housing, not less.”

There are eight more days until the state’s rent laws expire, and it’s looking increasingly likely that the issue of rent reform will be thrown in with a slew of unrelated items in an end-of-session bill known as the “Big Ugly.”

Over the last few days, Gov. Andrew Cuomo has expressed skepticism about the Senate’s ability to pass all nine rent regulation reform bills in their current form. He told WAMC on Thursday that while he believes the state Assembly has the necessary votes, the Senate does not. It remains to be seen if the proposed changes to the legislation will work their way back into the final versions of the measures.