RSA, CHIP Set to Become New York Apartment Association

Two landlord groups are now all but assured of becoming a new supergroup, and a leadership shakeup is also on tap.

The Rent Stabilization Association’s members are expected to vote next month on its proposed merger with the Community Housing Improvement Program. The combined group will be called the New York Apartment Association, according to a memo sent to RSA members.

The merger will mark the end of Joseph Strasburg’s 30-year tenure as president of RSA. Instead, he is expected to serve as a consultant for the new group for at least three years, three sources said. Strasburg and a representative from RSA did not respond to a request for comment.

RSA’s board, as well as CHIP’s board and members, have already signed off on the merger, and once the RSA membership vote happens, the proposal will head to the state attorney general for final approval.

Some names have been floated to lead the organization, but nothing appears certain. When reached Thursday, Jay Martin, executive director of CHIP, did not comment on the future leadership of the combined organization. He and Strasburg have both publicly supported the merger.

The Real Deal first reported merger talks in August. The groups share members and policy priorities, and tag-teamed a lawsuit challenging the state’s rent law. Their case died at the doorstep of the U.S. Supreme Court in October.

Some members have expressed concern that the priorities of small landlords will be lost in the new group and that RSA is bringing far more money into the deal than CHIP is. As part of the due diligence around the proposal, RSA commissioned a report that broke down CHIP’s spending.

The analysis by PKF O’Connor Davies found that the smaller group’s cash burn was driving it toward insolvency. CHIP said that was a result of its winding down fundraising while continuing its aggressive lobbying efforts.

The groups’ leaders have said that combining their membership would allow them to better represent the interests of owners of multifamily housing, as well as co-ops and condos, because they would be doing so as a united front.

The merger comes at a challenging time for owners of multifamily and especially rent-stabilized buildings. In the past five years they have endured a sea change in rent stabilization laws, the pandemic, a “cancel rent” campaign that led some tenants to stop paying, state and federal eviction moratoriums, a problematic rent relief program, rapid inflation of operating costs and a major surge in interest rates.

CHIP has pushed for the passage of a measure that would allow owners to reset the rents of rent-stabilized apartments that become vacant after at least 10 years of continuous occupancy. The rent would remain stabilized after that.

The landlord groups suffered an unprecedented setback in 2019 when a revamped state legislature overhauled rent stabilization. Landlords say they can no longer raise rents enough to properly maintain rent-stabilized buildings or re-rent their vacant, dilapidated units.

With CHIP’s rent-reset bill stalled, lawmakers this month proposed a grant program to help owners of such units. The state Senate has also signaled that it is willing to discuss increasing the cap on individual apartment improvements, a program that allows owners to increase rents based on the cost of renovations. The 2019 law limited those increases to $83 per month for most rent-stabilized apartments.