Landlords Start Hedging Their Bets In Albany

The times, they are a'changin in Albany. Senate Democrats are looking to take the Majority back from Bruno Skelos and complete the trifecta for control of the State Legislature. For decades much needed legislation has been stymied by the partisan logjam, so with the possibility of the dam bursting, developers/landlords are putting their contributions in a place where they never thought imaginable, Democratic coffers.

From The NY Times:

Looking to block or water down an array of pro-tenant measures, including the repeal of vacancy decontrol, that have won support in the Democratic-controlled Assembly, real estate industry executives have stepped up their campaign donations to the Senate Democratic leadership, a review of campaign-contribution records shows. They are also continuing to contribute to Republicans.

The review, made by the New York Public Interest Research Group at the request of The New York Times, found that a selection of major real estate developers, lobbyists and limited liability corporations gave more than $750,000 to the Senate Democratic leadership last year and this year. That is 15 times more than the roughly $48,000 that the same developers and companies gave to the Democratic leadership from 2005 to 2006.[...]

Industry officials are particularly worried about a measure strongly supported by rank-and-file Senate Democrats that would abolish vacancy decontrol, a law under which rent stabilized apartments are decontrolled and revert to market rents when the occupants move out, if the regulated rent exceeds $2,000 a month. The Assembly approved legislation to abolish vacancy decontrol as part of a package of pro-tenant bills it passed in May. Tenant groups have said that should the Democrats win the Senate this fall, abolishing vacancy decontrol will be among the first issues they and their Democratic allies will push for in the Senate next year.

The powerful realty groups are sickened by the fact that tenants might get a few rights at the expense of their own bottom lines. Rent and real estate in general has spiraled out of control, forcing many longtime residents to leave the city. Meanwhile wealthy developers that can afford to give hundreds of thousands millions in contributions have been laughing all the way to the bank (who they get to charge exorbitant amounts by renting commercial space in the city). That type of money is very addictive for executives at these corporations and as Dan Cantor of the WFP points out, they hope it goes both ways:

“Campaign cash is like a drug, and the real estate industry are like heroin dealers,” said Dan Cantor, executive director of the Working Families Party, which is leaning on Democrats to support a broad expansion of rent laws. “They have fed the Republicans’ habit for decades, and now they are trying to hook the Senate Democrats.”

We'll be ready for the intervention if necessary.

Rent Guidelines Board Sides With Landlords Again

Despite Christine Quinn's cries of being a rent-stabilized New Yorker, the Rent Guidelines Board ignored her humble roots and raised rent increases by the highest percentage in nearly 20 years. The board meeting was a crazy one down in Cooper Union, but of course it is every year. Renters want the price of living kept down and the landlords want to make more money off of their properties. Nothing changes, especially the RGB's ability to go along with the landlords.

From The NY Times:

At a meeting punctuated by ear-splitting whistle-blowing and shouting matches between sign-waving tenants and landlords, the city’s Rent Guidelines Board authorized rent increases of up to 4.5 percent on one-year leases and 8.5 percent on two-year leases.

The board also took the unusual and controversial step of authorizing a supplemental rent increase that affected only tenants who have lived in their apartments for six years or more. Owners of buildings with those tenants have the option of charging them the approved increases, or a $45 monthly increase for one-year leases or $85 for two-year leases, whichever is greater.

The last time the board approved a set of increases that were higher was in 1989, when one-year leases saw a 5.5 percent increase and two-year leases a 9 percent increase. In 2003, one-year leases increased 4.5 percent, but two-year leases increased 7.5 percent. Last year, the board approved increases of 3 percent on one-year leases and 5.75 percent on two-year leases.

Now you could say that at least the RGB didn't raise rates 14% like the landlords requested, but we know better that those weren't the rates they were after in the first place. Renters and landlords screamed at each other and even blew whistles over the issue. The Times called it a circus atmosphere but the clowns here are the board members who approved these rate hikes.

Now Christine Quinn will have something to complain about as she gears up for her Mayoral campaign. The downside is that with all of the other candidates, she has to worry that someone might call her out for siding with the ringleader of the circus in the last few years, that being Mayor Bloomberg and his use of zoning tricks.

Rent Guidelines Board Still In The Hands Of The Landlords

Every year there is a demand by renters to put a freeze on rent hikes and each time it is denied. Of course the landlords demand exorbitant hikes that would never see the light of day, so in the end the Rent Guidelines Board makes a "compromise" and raises the rates for renters across the city. Last year it was 3% for a one year lease and 5.75% for a two year and now the Board has tentatively passed a range for an eventual increase due out next month. This time around landlords wanted 9% and 14% increases respectively. Though that was voted down, the range (3.5-7% and 5.5 to 9.5%) is still ridiculously large and is slowly but surely kicking New Yorkers out of their city.

From The NY Times:

The proposed rent increases come as advocates for moderate and low-income housing and some elected officials have grown concerned about the affordability of the city’s rental market. Representative Anthony D. Weiner of Queens and Brooklyn released a study last month that found that roughly 500,000 New Yorkers were spending 50 percent or more of their income on housing.

Key factors in the range established by the board on Monday night are recent trends in housing affordability, tenant income and owner costs highlighted in three reports issued by the board’s staff last month. One of the reports, called the Price Index of Operating Costs, found that operating costs for rent-stabilized buildings increased 7.8 percent in the last year, in large part because of a rise in fuel costs and utility payments. The previous year, owners’ costs had risen by 5.1 percent. But another report showed that landlords of rent-stabilized units saw their net operating income — the earnings that remain after operating and maintenance expenses are paid — increase by 8.8 percent. That report was based on 2006 data.

If their incomes goes up while the costs of maintaining the buildings are at a similar rate, then there seems to be something fishy going on. Landlords in New York are notorious for cutting costs and skimping on the needs of their tenants. Even here in my own non-subsidized building, my heat mysteriously went out when we had that terrible cold snap in February of last year and when you call for something to get fixed....well, you get my point. What is important to note is that for all the whining and complaining that these poor, poor landlords do, they still make 37 cents on the dollar for their property. That isn't just a good deal, it should be classified as robbery.