Tourists Over Tenants
Last week's meeting of the Rent Guidelines Board (RGB) was inauspicious from the get-go. Board member Edward Weinstein opened by warning the crowd of his policy of zero tolerance for disruption. To that end, Weinstein informed the 80 or so people in attendance, mostly tenants, that both uniformed and plainclothes police were in the room. Weinstein announced his own role as "sergeant at arms," willing to assist with any arrests that might be necessary.
Then things got worse. But a raucous crowd was not to blame; in fact, at the close of the meeting, Weinstein applauded the audience's decorum. It was the board itself that caused the trouble. By the end of the night, it had cast a preliminary vote to give landlords of rent-stabilized apartments their biggest rent boost in four years, the much reported 4 percent for one-year leases and 6 percent for two-year leases. In an unusual move, the board cast a preliminary vote imposing the same hike on loft tenants. Skyrocketing fuel prices account for most of the jump.
While the hikes are troublesome on several frontsthey come at a time when landlords' incomes are the highest in a decade, follow years of increases despite flat operating costs, and become a permanent part of the rent structure even though fuel-cost spikes are temporarythey are not the most disturbing part of the board's preliminary action, which is pending a final vote on June 22. That status is reserved for the RGB's plans for one of the city's poorest tenant groups, the roughly 45,000 people who live in single-room-occupancy hotels (SROs).
The board gave preliminary approval to a 4 percent rent hike for SRO tenants and a plan that encourages hotel owners to continue chipping away at the dwindling but essential SRO housing stock. It voted to lower from 70 percent to 50 percent the number of rooms that SRO owners must rent to permanent tenants in order to get the 4 percent hike.
The formula originally aimed to stem the loss of SRO rooms as owners convert their buildings to tourist hotels, shunning long-term tenants, who pay much lower rates than tourists. SROs are the city's cheapest private housing, a sort of barrier from shelters or homelessness. If last week's RGB vote prevails, landlords can charge higher rents even as they take affordable rooms off the market.
Elizabeth Kane of the West Side SRO Law Project called the vote "unfounded" and "stunning." It's also baffling considering that SRO owners can make unregulated profits off tourists rather than permanent tenants, most of whom, according to a 1996 study, are employed but earn less than $10,000 a year. Nearly half of all SRO tenants live in poverty.
"A raise in our rent doesn't mean anything to the landlord, and I'll tell you why," Bob Grossman, a senior who lives in a 10-by-10 room in a West Side hotel, testified at an RGB hearing. "They've got busloads of tourists coming in every day from Europe, from Asia, paying $110 a night. I pay $13 a day for my room. The landlord is getting eight times as much from them as from me."
And while 4 percent of Grossman's rent won't add much to his landlord's pocket, it is a hardship for the retired schoolteacher, who says he lives on social security and money from his sister. "We're not rich. We're not even middle class."
Grossman says when he moved into his building 13 years ago, 85 percent of the tenants were permanent; now, that number is about 15 percent. Indeed, a Law Project survey of 60 West Side SROs found that only 11 still accept permanent tenants. On average, tourists pay $107 a night; permanent tenants an estimated $450 a monthmore than twice the $215 shelter grant that many SRO tenants rely on.
"It would be devastating if the proposed 4 percent increase were not reconsidered by the RGB in June," says Kane. "Given the small number of permanent tenants in most buildings, the increase would be as meaningless to landlords as it is crushing to tenants."
Hearings on all RGB proposals are scheduled for June 6 and June 15. For details, visit the board's Web site at www.housingnyc.com.
In most parts of the city, such a plan would be considered political suicide. But in a corner of the Northeast Bronx, it is anticipated as a stepping-stone. The move? Naming Joe Strasburg, president of the Rent Stabilization Association, honorary chair of an electoral campaign.
Strasburg is political poison in many quarters because he heads the city's largest landlord lobbya natural vote-killer among tenants. Not so in the Bronx district of City Council member Larry Warden, which is primarily populated with one- and two-family homes and towering Co-op City. Warden is banking on a May 18 fundraiser sponsored by his "close personal friend" Strasburg to advance his term-limit-imposed run for a state senate seat made vacant by incumbent Larry Seabrook's challenge to Congressman Eliot Engel.
Strasburg himself recognizes the potential backfire of having his name on a political bill. "The fact is, it's somewhat unusual that an elected official would ask me to lend my name to fundraising," Strasburg says. "And I basically tell them that sometimes it's not in their interest, depending on where they are. Some people just don't need that kind of a lightning rod."
One such pol is Council speaker Peter Vallone, who is also term-limited and on the bill for Warden's party. With years of pro-landlord legislation under his belt and a mayoral run in his head, Vallone has gone to pains to satisfy the landlord lobby while trying to strike a tenant-friendly posture. So you'd think Vallone would be more ginger about publicly palling around with Strasburg, who once served as his chief of staff. Even better, if Vallone wants to convince tenants that he's truly trustworthy, he could put an end to his campaign's reliance on landlord largesse. At last count, no Democratic mayoral campaign had received more real estate bucks than the speaker's.
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