Where Credit Is Due

Council Plan Helps Landlords Do the Right Thing

Anyone who wants a new affordable-housing program these days better make sure it's cheap, voluntary, and not too big. A citywide coalition of more than 50 grassroots organizations thinks it's hit all three in a proposal that finally offers hope to thousands of vulnerable tenants not protected by rent stabilization, who can be priced out of a gentrifying neighborhood easily and quickly.

The program, called the Community Stability Tax Credit, would lower property taxes for owners of small buildings if they keep rents for eligible tenants below market rates. According to the legislation, which Councilmember Bill de Blasio plans to introduce this month, the tax credit would cover just half the difference between what landlords are charging and what they could get. But that's enough, the drafters say, to appeal to small-property owners who have sentimental reasons for keeping on a long-term renter.

"There is this surprising dynamic where landlords sort of get to know the tenant," said Benjamin Dulchin, former organizer for the Fifth Avenue Committee, the Brooklyn community organization that came up with the idea. "They consider themselves part of a community with the tenant and end up keeping the rent low so the tenant doesn't have to be evicted."

In an attempt to prove the point, the Fifth Avenue Committee set up a mini-demonstration site a year ago in an apartment above Pollio Fine Foods, a 74-year-old deli in Park Slope. An elderly, longtime tenant is paying just $850 a month. The landlords receive an extra $275 monthly from the organization, for a total of $1,125. That's still less than the $1,400 that the Fifth Avenue Committee determined to be a fair market rent, but it's enough to tip the balance.

"I could have thrown her out and doubled the rent," said Jeffrey Raiola, part-owner of the deli and building. After the property tax hike in 2002, Raiola called the Fifth Avenue Committee, which was in the middle of an anti-displacement campaign. He said he'd like to keep on a tenant who had been in the building for 20 years, and is now infirm. At the time, the organization was raising money for a pilot program. It hasn't extended beyond this one agreement, but it serves as a powerful example that the idea can work. "This way," Raiola said, "I get to keep my tenant, do the right thing, and I don't feel like a donkey financially."

Ultimately, the tax credit will have to be approved by the state legislature, but first the City Council has to endorse the proposal. Opposition may come from owners of large buildings, who wouldn't qualify for the program and whose profit is already limited by rent stabilization rules. But otherwise, the tax credit faces considerably brighter prospects this year than last, when it was floated only to be lost amid budget woes. It will likely be restricted to 10,000 units annually, at a total cost to the city of $20 million—a pittance when compared to the $250 million that Mayor Bloomberg wants to return to homeowners. The mayor's office said it hasn't reviewed the proposal, but Diana Fortuna, president of the independent Citizens Budget Commission, a watchdog group known for its parsimony, said that she didn't think cost would be an issue. "Twenty million is not a significant sum in the overall city budget."

The proposal is tailor-made for Park Slope and other outer-borough neighborhoods like Williamsburg, Greenpoint, and Carroll Gardens, where gentrification is advancing now that it has subsumed most of Manhattan. These are also areas where many rental buildings are too small—under six units—to qualify for rent stabilization, and where often the landlord lives as well. The tax credit won't help people who are moving to these places now: It applies only to low-income tenants who have occupied their apartments for at least one year. But the proposal could help these communities maintain their original character—and characters.

 
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