Landlords push back against RSA and CHIP merger

“Small owners need to feel like they are part of the conversation”

Some Landlords Unhappy About RSA-CHIP Merger

From left: CHIP’s Jay Martin and RSA’s Joe Strasburg (Getty, CHIP, RSA)

Two landlord groups plan to merge, but not all members are on board with it.

The Rent Stabilization Association’s board is preparing to vote on its proposed merger with the Community Housing Improvement Program. From there, general membership gets to weigh in. 

But ahead of the vote, some RSA members are worried about CHIP’s finances and feel that RSA brings more to the table in terms of assets and membership. An internal report analyzing the potential merger indicated that CHIP was teetering on insolvency before RSA provided an infusion of cash last year. 

Members who spoke to The Real Deal expressed frustration with the merger process and concern that the priorities of small landlords will be lost in the newly formed organization. 

“We feel like we are being marginalized and put on the fringe,” one member said on the condition of anonymity. 

Helen Daniels, a board member of RSA, said she supports the merger as a concept, but feels the combination of the groups was presented to membership as a foregone conclusion, rather than a subject for discussion. 

“There needs to be transparency. Small owners need to feel like they are part of the conversation,” Daniels said in an interview. “We need to feel that the people who are sitting at the table are speaking for RSA and not just CHIP.”

“Don’t ignore us,” she later added. “Don’t pretend we’re not at the table.”

The groups have not publicly disclosed the prospective leadership structure of the combined organization, though names of potential new leaders have been floated.

“There is a sense that everything is being rushed, and there’s no opportunity for the airing of implications,” one member said on the condition of anonymity. 

Jay Martin, executive director of CHIP, said the process has been going on for a year and half, and that “all regulatory and legal requirements have been followed to a T.”

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“The suggestion,” he said, “that proper notification has not been followed is not only not true but offensive.”

RSA and CHIP share many members and priorities: They worked together to challenge New York’s rent stabilization law, eventually petitioning the U.S. Supreme Court to hear the case. In October, the court declined to do so. 

The groups have different leadership styles, with CHIP’s Martin taking on a more public-facing role than RSA President Joseph Strasburg, though both have been publicly supportive of the merger.

Ann Korchak, who heads the Small Property Owners of New York, said small property owners have long turned to RSA for guidance on regulatory compliance, lobbying and other needs. 

“When this merger is complete and the industry speaks with one voice, it’s incumbent that these small buildings, which are housing tens of thousands of New Yorkers, are recognized as vitally important to the stability of the rent-stabilized housing market,” she said in a statement. 

This legislative session could prove especially important for residential landlords. Democrats in the legislature are pushing for the passage of good cause eviction as part of any housing package that includes a replacement for the tax break 421a. 

Fred Wiener, an RSA member, expressed concern that the merged group would focus on a CHIP policy priority, a bill that would allow owners of rent-stabilized housing to reset rents in long-occupied apartments that have become vacant, instead of focusing on the group’s fight against the passage of good cause. Martin dismissed this idea.  

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“My organization has never publicly said that it supports good cause in its current version and any insinuation that it does is simply a lie,” Martin said. 

Gov. Kathy Hochul’s executive budget, unveiled this month, included a framework for a new 421a program, but made no mention of good cause eviction. The budget included a proposal to bar insurance companies from denying coverage of a building based on tenants’ source of income.

CHIP has also been advocating for legislation that would create a government-backed insurance program for affordable housing providers amid soaring premiums.