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Thursday, February 18, 2010

Espada: Housing Bill Will Freeze Rents

Sen. Pedro Espada announces his bill at City Hall on Feb. 17

A new housing bill introduced by State Senate Majority Leader Pedro Espada, Jr., which proposes to freeze rent increases for close to 300,000 qualifying city households, has riled some housing advocates who say the bill is pro-landlord legislation in disguise.

Espada said his bill would provide relief to rent-stabilized households that make less than $45,000 a year and spend at least a third of their annual income on rent. But many housing advocates say the bill could actually work against tenants and is typical of Espada, who serves as Senate housing chairman but has earned a reputation for being cozy with landlords.

“It does not surprise us that Senator Espada is holding water for the landlords,” said Michael McKee, executive director of Housing Here and Now.

Espada proposes to compensate landlords for the rent freezes by providing them with tax exemptions, which he estimates will cost the city $77 million.

That money would come from property owners who could voluntarily refund tax breaks they’ve received through what’s known as a J-51, a subsidy for landlords who renovate their buildings. In exchange, the buildings must be rent-stabilized.
Critics of Espada's bill say it would largely benefit landlords

Housing advocates say that landlords who think they’ll make more money charging market rate, destabilized rents will opt out of the J-51 program, and huge numbers of tenants—the ones who don’t qualify for Espada’s rent freeze—would see their rents go up.

“He’s going to freeze the rents of some people and strip all the protection of an entire class of other people,” said Mario Mazzoni of the Met Council on Housing. “Somebody whose rent depends on a J-51—they’re going to be out of an apartment.”

Last fall, in a case against Stuyvesant Town owners Tishman Speyer, a state judge declared it was illegal for landlords to hike rents while receiving these tax breaks.

Mckee said Espada’s bill would let landlords like Tishman Speyer, who were illegally deregulating apartments while getting tax benefits, “off the hook” by simply letting them pay back their J-51’s.

Espada defended his bill at a press conference on the steps of City Hall on Feb. 17.
“This isn’t about taking money out of anybody’s pocket, except those rich landlords,” he told reporters.

Those landlords, though, don’t seem to have a problem with the bill, at least according to Frank Ricci of the Rent Stabilization Association, a trade group that represents property owners throughout the city.

“As long as it’s voluntary, we support it,” he said of the J-51 refunds, adding that the group has been happy so far with Espada’s role as Housing chairman, a sentiment that not everyone would agree with.

“After seeing what happened last summer, there is a high amount of skepticism,” said Gitanjali Dadlani, an organizer for the advocacy group Tenants and Neighbors.

What happened then was the infamous State Senate coup, led by Espada, which paralyzed the Senate for a month. The crisis started on June 8—just a day before the Housing Committee was set to review legislation that could have repealed vacancy decontrol, which lets landlords hike rent prices once tenants vacate a rent-stabilized apartment.

The coup, and its effect on this legislation, left a stale taste in the mouth of most housing advocates, some of whom even petitioned unsuccessfully to have Espada removed from his post as housing committee chair.

“He’s been a disaster,” said McKee, of Housing Here and Now. “He bottled up every single pro-tenant bill.”

But to some, like Bronx senior Frances Thomas, Espada’s proposed rent freezes sound like a lifeline in a city that’s become largely unaffordable. Thomas stood on the steps of City Hall to lend her support to Espada at his press conference.

“They have to make the rent lower,” she said.

Thomas pays $951 a month for her apartment on the Grand Concourse, and her rent is scheduled to go up in April.

“I’ll have to pay it,” she said. “But it means I’ll have to eat less.”


  1. Frances Thomas should know that Espada's bill would not make "rent lower" -- it would only freeze it. Also, if she is a senior (62 or older) she probably qualifies for SCRIE -- so she can get her rent frozen now, without Espada's bill. www.nyc.go/html/dof/html/property/property_tax_reduc_drie_sc_te.shtml

    Mamaroneck Pedro's bill is legislative repeal of Roberts v. Tishman -- a case that re-strengthened rent stabilization throughout the city. This bill is nothing more than a gift to big landlords, many of whom live in Westchester County with Pedro and many of whom support Pedro financially. We know this now, because Pedro has finally filed campaign finance records. This bill is about ending rent stabilization -- a program that really does protect tenants. Only Mamaroneck Pete would have the chutzpah to propose a bill that is a pure gift to landlords and call it pro-tenant.

  2. See a more accurate photo of the event here: http://gothamist.com/2010/02/17/pedro_espada_photobombed_by_protest.php

  3. Was any of this captured on TV cameras? I would love to see links to video of staffers trying to cover up these signs.

  4. Espada is a very crafty man. This is classic divide and conquer.

    He's putting the immediate needs of poor people who live in chronic danger of eviction, in opposition to the longer term need to preserve Rent Stabilization, and while this plays out neither group gains.

    Affordable housing is a huge issue in this part of the Bronx. In this community (his district) the average income is $23,063. I see folks with incomes short of that everyday. There are virtually no apartments available for less than $1,000/month, Section 8's waiting list is very long, the waiting time for the project is estimated at over 10 years.
    And don't assume that Ms. Thomas qualifies for SCRIE. In fact, if Ms. Thomas has an income over $29,000 regardless of the size of the household (think grandma raising 2 grandkids, for example) she does not qualify for SCRIE. For the disabled the income limit is lower, and there of course lies the problem.

    So, if you live here, on paper this program looks good. Until, of course, you realize that it can easily lead to the end of rent stabilization.

    So for me, at least, the question becomes how do you oppose this without disregarding the extreme need we see in this community?


  5. Espada cannot change what he has been, what he currently is and what he probably will continue to be...a wolf in wolf's clothing carrying a carpet bag.

  6. A few points to add to Sally: In addition to pitting some tenants against others, there are more questions to be answered about this bill. For starters, would this fund of J-51 paybacks be enough to cover freezing the rents in so many apartments? Then what happens when the money runs out? And when the rent freeze ends? Sounds like it might be attractive to some in the short term and disastrous in the long term for all tenants.

    We are still waiting for Espada to live up to his promise to end vacancy decontrol. At best, this seems like a big distraction.

  7. Greg is absolutely right about the costs not being covered. By Espada's own estimates -- 295,000 households will qualify for the freeze. Assuming a rent of about $900 and say a 3% increase (conservative) that is about $325 per household times 295,000. That comes to just under $100,000,000 in the first year($95,580,000 to be exact)well over the $77 million he says it would cost. Note the amount that it costs the city in tax breaks goes up considerably each year because the rent stays frozen at the 2011 level. By year five, this freeze costs the city over $400 million. Espada just does not understand the math -- or he does not care. Probably the later. He only cares about the gift to the landlords to get out from under the Roberts decision. He knows there is no way a broke city will continue this program after a year or two. He does not care -- all he wants is to help the landlords who contributed to his campaign.

    Note as well, the benefit to landlords is immediate. They get out of the requirement to keep an apartment stabilized as soon as the bill passes and they pay back the J-51 subsidy. Tenants, on the other hand, get no benefit, no "freeze", until July 2011. The BNN reporter clearly didn't understand the bill when she speaks about Frances Thomas's rent scheduled to go up in April "unless the freeze law goes into effect". Wrong. The "freeze law" will not help a single tenant until July 2011.


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