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Elizabeth Donoghue

Elizabeth Donoghue

Posted: October 28, 2009 01:21 PM

The Stuy Town Decision: A Good Reality Check for New York

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No matter what side of the aisle you are on -- landlord or tenant -- the Roberts decision is good for New York. In it, New York's highest court ruled that tenants in buildings receiving a "J-51" tax abatement cannot be subject to eviction when their rents go over $2,000 per month and their combined household income is $175,000 or more in the prior two years, (called "high rent/high income" deregulation), and that their apartments cannot be deregulated when they leave, thus leaving those apartments affordable for other New Yorkers to live in. The decision is good for the middle class and for all New Yorkers.

First, the ruling allows real New Yorkers to have affordable housing.

Stuyvesant Town and other rent stabilized tenants make up backbone of our city. They are nurses, public school teachers and musicians. We need them here. We need them to pay affordable rents, and to be happy and satisfied, as they heal wounds, entertain us and teach our children. An essential component of the rent regulation is the right to have a lease renewed on an ongoing basis. This allows families to plan their futures, become part of the community and build a neighborhood without fear of losing their homes.

Second, the ruling puts real estate back on an even keel.

The Roberts decision halts the mad crazy real estate binge of the last 15 years to deregulate and to "develop" real estate. The decision reminds us of the overall purpose of the rent laws, which is to protect tenants from speculative rents and disruptive evictions. It gives us balance, balance that was created at the time that the J-51 law was enacted. The New York City Council, in adopting the J-51 law, set up a rational quid pro quo: landlords obtained tax benefits to undertake needed renovations in exchange for keeping apartments rent regulated. (There are numerous checks and balances in the rent regulatory system, e.g. the cost of improvements can be passed on to tenants and landlords can apply for hardship increases greater than the rent increases allowed under law, to name just two which benefit landlords.)

This city and the real estate industry had to get real. More than 80,000 units have been lost to high rent/vacancy decontrol since the laws were enacted in 1993. Like the banking and insurance institutions, the breakneck speed to profit has been skewed and unhealthy, resulting in problems such as poorly built new construction, and fraudulent and shoddy renovations designed to lift apartment rents over the $2,000 vacancy threshold for deregulation.

Third, the ruling effects profits, not housing.

The landlords cry that the decision is a "disincentive" to upgrade or maintain their properties is unavailing. Housing codes existed in New York City since the turn of the century. Since the early 1970s courts recognized the landlord's obligation to provide habitable premises, along with the tenant's obligation to pay rent. Many laws protect a tenant's right to safe, decent and habitable housing. The economic impact of the Roberts decision may be significant on landlord's profits, but should have no impact on their clear obligation to pay for repairs, upgrades and improvements -- the cost of which is often passed on to tenants under the rent regulatory system in any event. Thus the Roberts decision should have no bearing on the bedrock principle that every landlord/owner/developer is obligated to abide by the housing laws.

New York is experiencing what the rest of the country is, too: unemployment and hard economic times. The Roberts decision will help people keep their homes in this uncertain era, and give us security, not just for ourselves but for our neighbors and for our neighborhoods. Maybe we won't all get crazy rich, but we can continue to enjoy the richness of all of the people who live here.