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	<title>Observer &#187; Rent Regulation Chief: System Needs ‘Wholesale Reform,’ Rent Tax</title>
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		<title>Observer &#187; Rent Regulation Chief: System Needs ‘Wholesale Reform,’ Rent Tax</title>
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		<title>Rent Regulation Chief: System Needs ‘Wholesale Reform,’ Rent Tax</title>

		<comments>http://observer.com/2009/04/rent-regulation-chief-system-needs-wholesale-reform-rent-tax/#comments</comments>
		<pubDate>Thu, 30 Apr 2009 18:55:41 -0400</pubDate>
					<link>http://observer.com/2009/04/rent-regulation-chief-system-needs-wholesale-reform-rent-tax/</link>
			<dc:creator>Eliot Brown</dc:creator>
				
		<guid isPermaLink="false">http://www.observer.com/2009/04/rent-regulation-chief-system-needs-wholesale-reform-rent-tax/</guid>
		<description><![CDATA[<p>A State Senate forum on rent-regulation policy&nbsp;Thursday morning brought a long list of sharp criticisms of the existing system and calls for radical change, standard fare for events on this topic.</p>
<p class="MsoNormal">Some samples: The rent-regulation system &ldquo;needs a wholesale reform&rdquo;; there is &ldquo;absolutely no rationale&rdquo; for high-income decontrol; the city should implement a &ldquo;rent tax&rdquo; to subsidize middle-income tenants who can&rsquo;t afford increased rents.</p>
<p class="MsoNormal">What was notable was that all of those statements came from the chairman of the city&rsquo;s Rent Guidelines Board, the Bloomberg administration&ndash;controlled body that sets rent increase limits on the city&rsquo;s 1.4 million rent-regulated apartments each year.</p>
<p class="MsoNormal">The chair, Marvin Markus, made a point to note that the views were his own, not those of the administration or of the board.</p>
<p class="MsoNormal">The main theme of Mr. Markus&rsquo; remarks&mdash;made at State Senator Pedro Espada&rsquo;s forum on housing policy held at N.Y.U.&mdash;seemed to be that New York City&rsquo;s system of rent regulation was full of irrationalities, marked by a hodgepodge of various rules that can often be contradictory or have unclear intentions.</p>
<p class="MsoNormal">For instance, on the subject of high-rent, high-income decontrol (often called luxury decontrol), Mr. Markus was less than kind, calling it, &ldquo;probably the most irrational piece of the existing construct.&rdquo;</p>
<p class="MsoNormal">&ldquo;There&rsquo;s absolutely no logic, in my opinion,&rdquo; he said, &ldquo;to a system that says if your rent goes above $2,000 and if your two-year income is above $175,000, you get kicked out. But if you&rsquo;re Warren Buffet, or if you&rsquo;re Bill Gates, and your rent is $1,100, you can stay. There is absolutely no rationale to that construct.&rdquo;</p>
<p class="MsoNormal">His prescription to resolve some of the illogical aspects of the existing system would allow exemptions to rent increases for those who are unable to afford them, funded by a broad rent tax. This plan would infuse the concept of one&rsquo;s ability to pay into the rent-stabilization system, which currently does not consider income other than for high-income decontrol.</p>
<p class="MsoNormal">&ldquo;It is clear that what the board does&mdash;that is, an across-the-board increase for one- and two-year increases&mdash;does not target the areas of stabilized stock that need larger increases,&rdquo; he said. &ldquo;At the same time, tenants residing in these buildings are generally the least able to afford the required increases. I believe that the Rent Guidelines Board&rsquo;s role in stabilization would be considerably more rational if the system accommodated an income-based approach.&rdquo;</p>
<p class="MsoNormal">The political viability of such a plan is, of course, a different question, and it&rsquo;s hard to imagine that legislators would accept a new rent tax to pay for this plan (which is modeled on<a href="http://www.nyc.gov/html/dof/html/property/property_tax_reduc_scrie.shtml"> a program already in place for seniors</a>) without a huge fight.</p>
<p class="MsoNormal">But if there were &ldquo;wholesale reform,&rdquo; of the system, as Mr. Markus called for, now would be a good year for it, as most of the newly empowered Democratic majority in Albany <a href="/2009/real-estate/stabilization-mobilization-landlords-sound-warning">are pushing for</a> an array of new laws this session that would give tenants broad new protections, sparking a defensive fight from landlord groups.</p>
<p class="MsoNormal">Many eyes are on Mr. Espada, who is the new chairman of the State Senate&rsquo;s housing committee. In his opening remarks at the event, he called generally for a middle-road approach to reforming the state&rsquo;s rental laws, though he did not delve into specifics. (Tenant groups have been cold to Mr. Espada, as has the <span style="font-style: italic"><a href="http://www.nydailynews.com/opinions/2009/04/25/2009-04-25_pedro_plays_low_state_sen_espada_is_a_cowardly_scofflaw_carpetbagger.html"><em>Daily News</em></a></span>, with advocates passing out flyers that said in bold caps that &ldquo;SENATOR ESPADA IS NO FRIEND TO TENANTS.&rdquo;)</p>
]]></description>
		<content:encoded><![CDATA[<p>A State Senate forum on rent-regulation policy&nbsp;Thursday morning brought a long list of sharp criticisms of the existing system and calls for radical change, standard fare for events on this topic.</p>
<p class="MsoNormal">Some samples: The rent-regulation system &ldquo;needs a wholesale reform&rdquo;; there is &ldquo;absolutely no rationale&rdquo; for high-income decontrol; the city should implement a &ldquo;rent tax&rdquo; to subsidize middle-income tenants who can&rsquo;t afford increased rents.</p>
<p class="MsoNormal">What was notable was that all of those statements came from the chairman of the city&rsquo;s Rent Guidelines Board, the Bloomberg administration&ndash;controlled body that sets rent increase limits on the city&rsquo;s 1.4 million rent-regulated apartments each year.</p>
<p class="MsoNormal">The chair, Marvin Markus, made a point to note that the views were his own, not those of the administration or of the board.</p>
<p class="MsoNormal">The main theme of Mr. Markus&rsquo; remarks&mdash;made at State Senator Pedro Espada&rsquo;s forum on housing policy held at N.Y.U.&mdash;seemed to be that New York City&rsquo;s system of rent regulation was full of irrationalities, marked by a hodgepodge of various rules that can often be contradictory or have unclear intentions.</p>
<p class="MsoNormal">For instance, on the subject of high-rent, high-income decontrol (often called luxury decontrol), Mr. Markus was less than kind, calling it, &ldquo;probably the most irrational piece of the existing construct.&rdquo;</p>
<p class="MsoNormal">&ldquo;There&rsquo;s absolutely no logic, in my opinion,&rdquo; he said, &ldquo;to a system that says if your rent goes above $2,000 and if your two-year income is above $175,000, you get kicked out. But if you&rsquo;re Warren Buffet, or if you&rsquo;re Bill Gates, and your rent is $1,100, you can stay. There is absolutely no rationale to that construct.&rdquo;</p>
<p class="MsoNormal">His prescription to resolve some of the illogical aspects of the existing system would allow exemptions to rent increases for those who are unable to afford them, funded by a broad rent tax. This plan would infuse the concept of one&rsquo;s ability to pay into the rent-stabilization system, which currently does not consider income other than for high-income decontrol.</p>
<p class="MsoNormal">&ldquo;It is clear that what the board does&mdash;that is, an across-the-board increase for one- and two-year increases&mdash;does not target the areas of stabilized stock that need larger increases,&rdquo; he said. &ldquo;At the same time, tenants residing in these buildings are generally the least able to afford the required increases. I believe that the Rent Guidelines Board&rsquo;s role in stabilization would be considerably more rational if the system accommodated an income-based approach.&rdquo;</p>
<p class="MsoNormal">The political viability of such a plan is, of course, a different question, and it&rsquo;s hard to imagine that legislators would accept a new rent tax to pay for this plan (which is modeled on<a href="http://www.nyc.gov/html/dof/html/property/property_tax_reduc_scrie.shtml"> a program already in place for seniors</a>) without a huge fight.</p>
<p class="MsoNormal">But if there were &ldquo;wholesale reform,&rdquo; of the system, as Mr. Markus called for, now would be a good year for it, as most of the newly empowered Democratic majority in Albany <a href="/2009/real-estate/stabilization-mobilization-landlords-sound-warning">are pushing for</a> an array of new laws this session that would give tenants broad new protections, sparking a defensive fight from landlord groups.</p>
<p class="MsoNormal">Many eyes are on Mr. Espada, who is the new chairman of the State Senate&rsquo;s housing committee. In his opening remarks at the event, he called generally for a middle-road approach to reforming the state&rsquo;s rental laws, though he did not delve into specifics. (Tenant groups have been cold to Mr. Espada, as has the <span style="font-style: italic"><a href="http://www.nydailynews.com/opinions/2009/04/25/2009-04-25_pedro_plays_low_state_sen_espada_is_a_cowardly_scofflaw_carpetbagger.html"><em>Daily News</em></a></span>, with advocates passing out flyers that said in bold caps that &ldquo;SENATOR ESPADA IS NO FRIEND TO TENANTS.&rdquo;)</p>
]]></content:encoded>
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