Tensions run high between landlords and state Assembly committee at rent regulation hearing

In what one state lawmaker referred to as a “brave” move, a landlord accused of harassing rent stabilized tenants appeared before a state housing committee Thursday to testify in favor of the very programs his company is accused of abusing.

Amir Sobhraj, financial controller of Zara Realty in Queens, spoke before the state Assembly Housing Committee on Thursday in defense of Major Capital Improvements, Individual Apartment Improvements and other programs that the legislature has proposed eliminating. In March, Attorney General Letitia James and Gov. Andrew Cuomo announced a lawsuit against Zara, accusing the Queens landlord of harassing tenants with illegal broker fees, rent increases and late fees. The developer has also faced tenant lawsuits alleging rent overcharging for capital improvements and harassment of undocumented tenants.

“What makes a landlord take advantage of tenants the way Zara does?” asked Committee chair Steven Cymbrowitz.

Sobhraj disagreed with the lawmaker’s characterization, and noted during his testimony that “the court of public opinion is not the court of law.” He also blamed “third party agitators” for instigating tenant lawsuits.

The hearing, the first of three scheduled on a package of legislation that would dramatically change the state’s rent regulation laws, became heated on Thursday, especially between legislators and landlord representatives. The proposed bills seek to change how preferential rent is applied to regulated units, and axe vacancy bonuses, MCIs, IAIs and vacancy decontrol. Another, referred to as the “good cause eviction” bill — regarded as a path to universal rent control — received support from some who testified, though it wasn’t initially on the list of measures being considered for the hearing.

When Rent Stabilization Association president Joseph Strasburg said that proposed rent regulation reforms would “NYCHA-tize” private housing — a warning repeatedly uttered by his and other landlord groups — Assembly member Charles Barron responded that the comment was “racist.” He also criticized Strasburg’s claim that the elimination of MCIs would disproportionately hurt minority construction workers because they’d lose work on building renovations.

“You are so concerned about people of color losing your jobs,” Barron said. “That is a fear tactic that will never, never work.”

He then compared the strategy of threatening job loss to imposing sanctions on Apartheid South Africa.

Strasburg noted that it seemed the elimination of vacancy decontrol was a “done deal.” He warned that the consequences of discarding this and other programs — which landlord groups argue will result in the decline of the city’s housing stock as costs of owning property in New York continue to rise — will emerge within a few years.

“The sky isn’t going to fall over night,” Strasburg said. “You don’t have to believe anything. In three years or less, some of your actions will prove out. And then we will determine who was right.”

He also called it “mind boggling” that the legislature isn’t considering a bill, introduced in 2015, that would expand the senior citizen rent increase exemption (SCRIE) and the disability rent increase exemption (DRIE) programs to tenants who earn less than $50,000 and are paying more than 50 percent of their income in rent.

Assembly member Linda Rosenthal reminded him that the hearing was intended to discuss measures proposed and “not bills you wished we proposed.”

“No one is forcing you to be in this industry,” she said. “You can sell your building for a gigantic profit.”

Part of the hearing also turned into a tale of two housing agencies: One that didn’t have answers, and the one that didn’t show.

Representatives for the city’s Department of Housing Preservation and Development noted that MCIs are “ripe for abuse,” though they wouldn’t say if HPD supports the full elimination of the program.

“We’re looking at all the levers and making sure we find the right balance,” said Lucy Joffe, assistant commissioner of policy for HPD.

Later on, City Council Speaker Corey Johnson was asked why the administration wasn’t taking a firm stance on getting rid of the program.

“I’m not sure I’m in the position to defend this administration or speak for HPD,” he said. Johnson noted that when Mayor Billl de Blasio ran for office, he promised to preserve and create affordable housing. “I don’t know why they wouldn’t support that.”

Cymbrowitz noted a few times during Thursday’s hearing that the state’s housing regulator, the department of Homes and Community Renewal, had been invited to testify but had declined.

“There are multiple hearings scheduled by the legislature in several different locations,” a representative for the agency told The Real Deal. “HCR submitted testimony for today’s hearing in support of extending and strengthening New York’s rent regulation system and plans to testify in person in another hearing next week.