Real Estate Industry Braces for Democratic State Senate

For years, the Democratic majority in the Assembly and the Democratic minority in the Senate supported without consequence bills that would have vastly expanded protections for tenants and restrictions on landlords. Given the political reality—the Senate Republican leadership was sure to block their passage—Democrats in both chambers never thought the legislation had a chance of becoming law.

Last year, for example, the Assembly passed a bill that almost all Senate Democrats supported that would have blocked landlords’ ability to remove an apartment from rent stabilization when tenants move out, abolishing vacancy decontrol.

Now, Democratic lawmakers say, both houses will likely back away from some of their prior positions when it comes time to pass laws, though it is uncertain to what extent.

 

REAL ESTATE INDUSTRY representatives say they hope to at least have the ear of the expected Senate majority leader, Malcolm Smith. The Queens Democrat is a former real estate developer and is generally more fiscally conservative than many of his Senate colleagues. While he did not respond to a request for comment, he has previously suggested that real-estate-related legislation will be a balancing act between the industry and tenants.

There does not seem to be any immediate rush on the part of the Democrats to get to tenant legislation when the second session begins in January, as the state’s grim fiscal situation, with a $12 billion deficit projected by the governor, seems likely to consume the attention of lawmakers, at least until the budget is due at the end of March.

Aside from pushing back certain legislative action for months, real estate industry professionals say the straitened economic climate could help them avoid new regulations and restrictions that Democrats might otherwise want to put into effect.

“The real estate industry is an extremely large component of the economic engine of New York City and New York State,” said Frank Ricci, government affairs director at the RSA, the main advocacy organization for landlords that own apartment buildings with rent-stabilized units. “I don’t suspect in these times that the Senate or the Assembly Democrats are going to want to shut that engine down.”

Still, Mr. Ricci said it was far too early to predict what legislative actions Democrats would take. Indeed, Mr. Smith has yet to be anointed majority leader; the committee chairs have yet to be chosen; and it is unclear how much power, if any, will be officially deferred to the majority leader, though Mr. Smith said last week the Democrats would change rules so that “committee chairs have the ability to move legislation forward.”

Tenant advocates are pushing for changes to a host of laws, concerning issues such as vacancy decontrol; rent-regulated Mitchell-Lama buildings; the ability of New York City to set its own rent-regulation laws; and the Rent Guidelines Board, which sets rent increases for rent-stabilized apartments.

“We have a big agenda,” said Mike McKee, treasurer of Tenants PAC, a group that directed its recent efforts wholly at overturning the Republican Senate.