Sandy is still causing headaches. Bureaucratic ones.

After Hurricane Sandy, rent-stabilized tenants living in damaged buildings with diminished services were told—and believed—that they would be able to get rent reductions for the entire time they were without services.

The Rent Stabilization Code stipulates that reductions are given from the time the service is lost. But, as rent-stabilized residents at Peter Cooper Village and Stuyvesant Town have discovered, they might only be eligible for reductions starting in March—a four-month discrepancy that could be worth thousands of dollars per tenant.

According to a recent fact sheet from the state's Division of Housing and Community Renewal, rent reductions will only be awarded from the month that the department notifies landlords of diminished services, rather than from the time when the services were lost. For the 1,200 tenants of Stuy Town and Peter Cooper Village who filed with their claims with the Department on Feb. 26, the difference is significant. Rather than receiving rent reductions starting in late October, when flooding damaged the building's security systems, laundry rooms, elevators, building intercoms, bike and carriage room storage and trunk storage, reductions would only start applying in March, or even April.

Now, politicians are trying to untangle the mess.

"Unlike the Rent Stabilization Code this seems to be an administrative policy that doesn't have a basis in law," State Assemblymember Brian Kavanagh told The Observer. "We're talking about a fact sheer versus a formally adopted code."

Earlier this week Mr. Kavanagh, State Senator Brad Hoylman, Councilmember Dan Garodnick, U.S. Representative Carolyn Maloney and borough president Scott Stringer sent a letter to the Division of Housing asking for clarification on the discrepancy and an explanation on its basis. They have yet to receive a response and the Division has not yet returned a request for comment from The Observer.

Mr. Kavanagh said that tenants could be denied a significant amount of compensation to which they are entitled if the Division's standard is applied rather than the Rent Stabilization Code's. Moreover, the Divison is not even applying reductions from the date they were filed, but from the beginning of the month that notifications are served on the landlords. Meaning that in some cases, rent reductions could be delayed a number of additional weeks, or even months.

Tenants may also have reason to be concerned as it's not the first time that the Division of Housing has shifted its policies and interpretations to be more landlord friendly. Incidentally, the last case also involved rent-stabilized tenants in Stuy-Town and Peter Cooper Village.

The tenants lived in apartments that had been removed from rent stabilization even though the landlords were receiving J-51 benefits. In 2000, the Division of Housing—which had earlier issued an opinion letter stating that J-51 units were exempt from deregulation—adopted a regulation that the exemption didn't apply to buildings like Stuy Town, which would have been rent stabilized even if the landlords did not receive J-51 benefits. The regulation was eventually struck down in court as illegal.

As for the market-rate tenants living in the complex? Neither the Rent Stabilization Code nor the Division's rules and regulations apply to them. But there's a class action lawsuit that they could join.

kvelsey@observer.com

Decision time. Will the Supreme Court hear the rent control case? (IslesPunkFan, flickr)

Forget sweet nothings and exclusive party invitations. The two words most New Yorkers long to hear are "rent controlled." But like so many (impossible?) dreams, this, too, may soon be dead.

The Supreme Court could decide today whether or not to hear a case brought by former federal prosecutor James D. Harmon Jr., the owner of a five-story townhouse on West 76th Street. Mr. Harmon, who grew up in the brownstone and now lives there with his wife Jeanne, inherited the building and its three rent-controlled tenants from his grandfather. He argues that New York City's rent laws violate the Constitution by taking his property without just compensation.

The three tenants with rent control pay approximately $1,000 a month for one-bedroom apartments, about 59 percent below market rate, according to court documents. Three other tenants in the building pay market rents.

"For 50 years my family has been subsidizing the lifestyles of tenants," Mr. Harmon, who is 68, told the Observer on Friday.  He and his wife were both getting older, Mr. Harmon said, and cannot afford to do it anymore. "If there is a problem here, then society as a whole should bear the burden."

Although the case will, of course, only decide the fate of Mr. Harmon's tenants, it could have wide-reaching implications for the nearly 1 million rent-stabilized apartments in the city.

This is not the first time Mr. Harmon has challenged rent control laws in the courts. Earlier suits filed by Mr. Harmon sought to remove a rent-controlled tenant so that the Harmons' college-age granddaughter could live in the unit. Most recently, he took the case to the the United States Court of Appeals for the Second Circuit, which ruled last September that the rent-stabilization law did not constitute a “taking" and that Mr. Harmon had acquired the property with "full knowledge that it was subject to RSL."

Mr. Harmon declined to comment on what he would do if the Supreme Court rejects his petition to hear the case.

"I took an oath to protect and defend the Constitution first as a soldier and then as a prosecutor," said Mr. Harmon, who attended West Point and served in the Vietnam War. "It is very difficult when the freedom of your own family is at stake. If the government can deny us the right to have our granddaughter live with us, then it can do anything. So, today, I went to Mass and said a prayer for all of us that the Constitution is alive and well in New York."

Two of the three-tenants in rent-controlled units—Nancy Wing Lombardi and Dave Mlotok, declined the Observer's request for an interview. The third, Cheryl Mervine, did not return calls seeking comment.

Of the three, only Mr. Mlotok has spoken publicly, albeit briefly, about the situation, telling The Times that despite the potential for unpleasant confrontations, Mr. Harmon had been a good landlord and their meetings in the foyer have remained civil.

Mr. Mlotok, who moved into the apartment in 1976 and now works in publishing, declined to discuss with The Times whether or not he could afford to pay market rate for his apartment.

The city, meanwhile, voted last month to extend the Rent Stabilization Law through 2015, citing vacancy rates well below 5 percent. Such is the threshold to declare the requisite, ongoing housing emergency needed to continue the law.

The law, on the books since 1969, mandates that owners of properties with six or more units abide by annual rent increases—usually around 3 percent—set by the Rent Guidelines Board.

Last year, the state legislature bolstered the protections, renewing rent regulation laws and raising the ceiling on rent stabilization-eligible apartments in the process.

If the Supreme Court decides to take the case, oral arguments would be held this October. Although the court considered whether or not to hear the case on Friday, an announcement as to whether or not it will have its day in the highest court of the land is not expected until today at the earliest. The announcement could come anytime between now and the next weeks.

kvelsey@observer.com