Destabilized associations: Did RSA chief Joe Strasburg meet his match in the new Albany?

After 25 years as the top lobbyist for small landlords, perfect political storm has dealt him massive blow

New York /
Jun.June 14, 2019 12:15 PM
Rent Stabilization Association president Joseph Strasburg (Credit: iStock)

Rent Stabilization Association president Joseph Strasburg (Credit: iStock)

As the public policy debate on rent regulation kicked into high gear a few weeks ago, the state Assembly’s first hearing on rent reforms gave an indication of the kind of fervor to come.

Joseph Strasburg, president of the Rent Stabilization Association, urged a group of adversarial lawmakers not to enact reforms he argued would result in the rent-regulated housing stock looking like the city’s financially strapped public housing system.

“Do not NYCHA-tize [the] private sector,” he said at the early May hearing in Lower Manhattan. “Because that’s what’s going to happen.”

As the crowd of mostly tenant advocates who gathered at the hearing booed, Assembly member Charles Barron of East New York shot back at the RSA leader.

“That’s racist,” he said.

“It’s not a racist statement; it’s fact,” Strasburg responded. “It’s purely based on economics. No other reason.”

“That’s pure racism,” Barron said. “And I didn’t expect anything better from you.”

Later that day, Strasburg sent a letter to members of the Assembly’s Housing Committee doubling down on his argument that eliminating or seriously curtailing programs available to landlords to improve their properties would have a detrimental financial impact on rent stabilized housing.

He added that his remarks “related to the issue of disinvestment and not to the residents of public housing, specifically NYCHA.”

The incident illustrated the unfriendly waters Strasburg and the 25,000 landlords he represents find themselves in. For the first time in decades, the state government is completely controlled by tenant-friendly Democrats and is on the precipice of pushing through the most drastic reforms Strasburg’s seen in his quarter of a century at the RSA.

Over that time, the RSA president has shaped the group in his image as a dogged advocate that will aggressively push for its agenda – much more hawkishly than the real estate industry’s other lobbying groups, according to both his supporters and detractors.

In addition to a surging left flank of the Democratic party, Strasburg is facing a fractured real estate industry where several powerful landlords have taken it upon themselves to spearhead their own lobbying efforts independent of the RSA and other groups.

Kathryn Wylde, president of the pro-business group Partnership for New York City, brokered a meeting earlier this year between landlords looking to form an alliance with affordable housing groups. She said some large property owners feel like Strasburg and the RSA aren’t moving the needle on the rent reform debate.

“I would say that [Strasburg] has played an outstanding inside game on behalf of small, non-luxury owners for decades and deserves a lot of credit,” she said.

“He’s no shrinking violet.” – Sal Albanese

Wylde added that as a tsunami of anti-owner sentiment swelled and tenant advocates controlled the conversation, real estate players decided it had become “a matter of every man for himself.”

Million Dollar Man

Strasburg, 67 years old with white hair and a heavy Bronx accent, was exposed to rent stabilization at an early age.

His family settled in a stabilized building in the Bronx in the late 1950s when they moved from Israel to the United States. In a strange twist of fate, the building he grew up in, owned by Axelrod Management, was purchased in 2015 by Ved Parkash, who’s been accused of being one of the city’s biggest slumlords.

Strasburg had clashed with Axelrod over the years, and he said the experience taught him that there are, like in any industry, bad actors in real estate. But, he said, that shouldn’t mean the whole industry is colored with the same brush.

“To me, when you have bad apples, you have enforcement mechanisms,” he said, “Instead of using a sledgehammer, one can use a scalpel.”

Strasburg attended the City College of New York and the University of San Fernando College of Law in California before going to work for the New York City Council, where he rose through the ranks to become chief of staff for then-Council Speaker Peter Vallone.

He left the public sector in 1994 just one month before Vallone and the Council implemented the policy of vacancy decontrol, which allowed landlords to move apartments out of regulation once rents hit $2,000 a month. (The figure has since been upped to $2,774 a month.)

As a former Council staffer, Strasburg was prohibited from lobbying the Council for one year after leaving the body. And while he insists he didn’t lobby members on vacancy decontrol that year, at least three former Council members in 2016 told ProPublica that “his fingerprints were on the vacancy decontrol campaign.”

Flash forward 25 years, and Albany appears intent on eliminating vacancy decontrol. It would be a major blow to Strasburg, who has been an effective advocate for his members. He earned a compensation package of nearly $940,000 in 2017, according to RSA’s tax filings.

“The RSA’s members definitely got their money’s worth,” said Sal Albanese, a former City Council member who knew Strasburg when he worked for Vallone.

Albanese said Strasburg knows how to convince those who are sitting on the fence to join his cause because he understands the dynamics of those in office.

“He’s no shrinking violet,” Albanese said. “He’s the kind of guy who will tell you he’s not going to support you anymore, and that of course means donations. He will support your opponent.”

“This is hand-to-hand combat” – Hank Sheinkopf

Through the RSA’s two political action committees, the group’s made more than $7 million in political donations since 2010, according to campaign finance records. RSA spent a record $1.4 million last year as it tried to prevent the state Senate from turning blue.

Elbows Out

Those who know Strasburg paint the picture of a skilled political operative often described as “aggressive.”

In one example, he publicly badmouthed Gov. Andrew Cuomo in 2011, when he was recorded on camera telling a group of RSA members that the governor “will crush you like his father did.” Sources said that Cuomo still holds a personal vendetta against Strasburg over the comment.

“I suffer from a disease called I tell it like it is. I’m very clear about what I think,” Strasburg said.

And late last year, Strasburg called the New York State Association for Affordable Housing “duplicitous” for teaming up with housing advocates to support rent reforms that would hurt RSA members.

The RSA can often come across as rough around the edges, particularly when compared to the real estate industry’s other main lobbying group, the Real Estate Board of New York.

“The RSA is less diplomatic than REBNY because it has to be. The people they represent can’t write as big a check,” political consultant Hank Sheinkopf said. “The idea that somehow this is diplomacy is the great lie. This is hand-to-hand combat.”

The RSA’s members are mostly small landlords who write modest checks that Strasburg funnels almost exclusively to state Senate Republicans with a narrow focus on weakening the rent stabilization laws. REBNY members, on the other hand, have significantly vaster financial resources and are concerned with a broader range of issues – which makes them more reliant on forming and preserving relationships on both sides of the aisle.

REBNY presidents like John Banks and his predecessor, Steven Spinola, tend to be more polished and genteel in their public personas, whereas Strasburg is not afraid to lob a few bombs. And while there’s certainly cross-over between their enrollments, REBNY members include civic leaders who would balk at seeing their representatives get into knock-down, drag-out public arguments with lawmakers.

REBNY has also adjusted to the new political climate in a way the RSA has not. The real estate board since 2018 has donated more than $150,000 to state Assembly Democrats – more than twice it’s given in any single year on record.

Strasburg and the RSA, on the other hand, doubled down on state Republicans. The group gave more than $350,000 to a political action committee called Balance New York, which is run by a former high-ranking campaign official for the Senate GOP.

But the RSA’s political donations have – at least in one incidence – led to an accusation of pay-to-play.

RSA’s known to be aggressive in making candidates or elected officials bend to its will. In fact, Strasburg has been accused of using donations to buy votes.

Longtime tenant advocate Michael McKee last year said that during a City Council hearing in 2010 the RSA promised three Democratic senators $150,000 in campaign funds if they would vote against bills to close the preferential rent loophole and another that would restrict owners use evictions.

The RSA shot back with a $40 million lawsuit – still ongoing – accusing McKee of defamation. Strasburg said advocates have the right to criticize policy but McKee “crossed a very bright line” when he accused him of a crime.

McKee called the lawsuit as a characteristically aggressive move by Strasburg to advance RSA’s agenda.

“I don’t think we could have done anything differently.” – Joe Strasburg

“It has nothing to do with their reputation and it has nothing to do with money,” he said. “They sued us in order to try to stop us from turning the state Senate blue. That didn’t work and they’re continuing the lawsuit in hopes of making it harder for us to win stronger rent laws.”

The Postmortem

Though the current rent laws are set to expire June 15, Strasburg decided to hold off on traveling to Albany until the final few days before lawmakers negotiate the “Big Ugly” omnibus bill – convinced that’s the most effective time to make his case. In the first two weeks of June, many believed the rent laws likely wouldn’t get resolved until the end of the legislative session. The Senate had announced on June 4 that it had enough support to vote on the nine bill package but didn’t take action. Gov. Andrew Cuomo repeatedly challenged the Senate to move ahead with the bills if they truly had support.

“What you see now is a lot of brinkmanship, a lot of poker,” Strasburg said on Friday, June 7. “If anybody thinks they know what the governor is thinking, they are out of their minds because he doesn’t tell anybody what he’s thinking until he does it.”

But on Tuesday evening, the Senate and Assembly announced that they’d come to an agreement on changes to the state rent laws. Strasburg said he wouldn’t bother to travel to Albany before the end of the session. The RSA has already met with the legislators who would listen to the organization’s case.

“At the end of the day, you have a new progressive socialist movement,” he said. “We went through an educational process. I don’t think we could have done anything differently.”

But the RSA’s lobbying effort had to contend with individual landlords who went to Albany to try and make their own deals.

“It’s like herding cats,” Community Housing Improvement Program executive director Jay Martin said of trying to get owners with different priorities to stay on the same message.

Larger building owners, he said, might emphasize protecting the right to deregulate units. Owners of smaller buildings, he said, place a higher priority on protecting IAIs, MCIs and preferential rents.

The big landlords were certainly out in force.

The LeFrak Organization – which owns largely rent-stabilized LeFrak City in Queens – has its own lobbyist who has been up in Albany since earlier this year meeting with Democratic lawmakers to discuss rent reform bills.

Ruby Schron’s Cammeby’s International has its own lobbyist in Albany, and A&E Real Estate president Douglas Eisenberg recent registered as a lobbyist, presumably so that he can personally speak with lawmakers on rent reform.

(The individual lobbying efforts resemble a similar strategy from April when William Lie Zeckendorf broke from the Real Estate Board of New York and went to Albany with his own lobbyist to push back on the proposed pied a terre tax – which the industry was ultimately successful in scuttling.)

And Richard LeFrak, Bill Rudin and Douglas Durst reportedly made a last-ditch effort and made a direct call to Cuomo Wednesday asking for him to veto the bill. The governor’s response was to tell the real estate titans that they should call their legislators.

What’s more, earlier this year landlords like A&E and the Blackstone Group met affordable housing groups earlier this year to try to strike a deal.

Strasburg noted that the RSA is a consensus-driven organization, so that “doesn’t mean every proposal fits all.”

“Everybody has different interests,” he said. “Some of them think they can do a better job, which is their right to do.”

CHIP’s Martin said the events this week were set in motion when Donald Trump won the presidency in 2016 and motivated voters to turn the New York State Senate Democratic last year.

In that climate, he said, it would be difficult for any one industry figure to hold back the floodwaters that are washing over the industry.

“The groundwork for what happened this week was laid almost two years ago,” he said. “So to say that Joe or anyone could have done specific changes to lobbying right now – to do a postmortem before the bill’s even passed – it’s kind of hard to do.”

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