Rumble at the Rent Board

Annual Ritual Gets Rougher Than Usual

With the precision of a well-rehearsed minuet and the ambience of a mosh pit, landlords and tenants squared off once again this year to perform their annual dance before the Rent Guidelines Board, the panel that sets rent hike rates for millions of tenants citywide. On June 15, the RGB held a grueling 13-hour public hearing, the last before its final vote on June 22. By the time it was over, three tenants were escorted out and four more arrested, including two women, ages 61 and 69, and a 63-year-old man, who shouted down landlords. They were charged with trespassing and disorderly conduct.

Histrionics are not uncommon at RGB hearings, but this year's meeting got so out of hand, tenants have written to Mayor Rudy Giuliani, asking him to remove two RGB members, including chair Ed Hochman. Calling Hochman and Edward Weinstein "unfit for board service," Michael McKee and Tom Waters of the New York State Tenants & Neighbors Coalition blamed the two for setting a provocative tone at the hearing, held at the Great Hall at Cooper Union. The meeting was guarded by half a dozen plain-suited officers from the police department's intelligence detail. Another 10 uniformed cops stormed the hall as the arrests took place.

Both Weinstein and Hochman responded glibly to news of the letter, but also revealed their own frustrations. "My first reaction is amusement," said Weinstein, who said he is reconsidering his own desire to remain on the board "after the abuse I took last night by Mr. McKee's constituents. I am a public citizen, and I don't appreciate the calumny thrown at me and my colleagues by people who demand to be heard and do not afford their fellow citizens the same right. That was the nub of it." Hochman said that "if McKee's going to write a letter asking for my removal, ask him if he needs money for the postage stamp."

Both landlords and tenants are squawking about the preliminary RGB guidelines passed in May that call for a 4 percent hike for a one-year lease and 6 percent for a two-year lease, the highest in four years. Tenants say affordable apartments are vanishing and that their incomes can't keep pace with the white-hot real estate market. Landlords argue that despite net operating income hikes of more than 11 percent for two consecutive years, a 54 percent spike in winter fuel costs merits steep hikes.

Insiders say the 4 and 6 percent hikes may be whittled, however slightly, with tenant relief coming from a surprising quarter: the Giuliani administration, which appointed seven of the nine RGB members. "What City Hall is saying it wants is 3 and 5" percent hikes for one- and two-year leases respectively, says one well-placed source.

Some tenant advocates also expect to have the necessary votes to repeal, at least for this year, the so-called poor tax, a monthly levy tacked onto low-rent apartments in addition to the usual rent hikes. This year, the RGB preliminarily approved a $15-a-month surcharge on apartments renting for $500 a month or less. (There are about 200,000 such stabilized apartments.) Landlords say that they need the change to ensure that each apartment generates at least $459 a month, the average amount it costs to run a stabilized apartment, according to the RGB's research.

Jack Freund, executive vice president of the Rent Stabilization Association (RSA), the city's largest landlord lobby, says many tenants in cheap apartments can afford to pay more. Census data show that among tenants paying $500 or less, the median spend about 25 percent of their income for rent, compared to a national standard of 30 percent. But the same low-rent tenants have a median income of $15,000—half as much as those who pay $500 or more. Devoting 25 percent to rent leaves little left over.

"The question is, what trade-off do you make when you have to pay that extra $15?" asked Patrick Markee of the Coalition for the Homeless, who testified at the hearing. "What does it mean in terms of food and prescription medicines?"

Sources say the Giuliani administration won't ditch the tax, which has been levied every year since 1983, except for the years during the Dinkins administration. But following a much publicized overnight rent protest at Gracie Mansion last week, advocates are hopeful that the board may scrap it. "I think there's pressure like never before," said Jenny Laurie of the Met Council on Housing. "Even politicians came in and talked about it, using the term 'poor tax,' " which landlords abhor. "People used to feel sorry for landlords, that they couldn't make it. But now, the market is so ridiculous and they're making so much money, that feeling is gone."

 
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