Rent breaks: who needs them?  (The Sonic Oscillators, flickr)

Are you sick and tired of people complaining about the crippling rents they pay? And the fact that said rents will only become more crippling in the future and most likely not be accompanied by commensurate pay raises? Downers, right? You should go hang out in the Financial District, where no one is even bothering to file some paperwork that would make their market rate apartments rent stabilized, reports The Wall Street Journal.

In a situation that is strangely befitting of the neighborhood in which they live, thousands of tenants who live  in potentially rent stabilized apartments haven't made any moves to secure the time-sensitive designation. The number who have—10!—is scarcely in the double digits. What the hell? Surely not everyone who lives in the Financial District has the cash to wallpaper their walls with $100 bills? And since when have Wall Street guys been averse to gaming the system for all that it's worth?

The eligible units exist in buildings renovated by developers after 9/11 who took advantage of a state tax credit called 421-g incentivized the conversion of office buildings into residential buildings. Two years ago a resident in one of the luxury building took his case to housing court and won, arguing that his building should always be rent-stabilized because of the tax deduction. To make their units rent stabilized, tenants would file a notice of rent overcharge or sue to have the unit converted.

Apparently, the required paperwork seems not worth the effort for the fresh-out-of-college people who work in high paying jobs and use the luxury apartments as crash pads that they generally abandon before rent stabilization would make much of a difference.

"Our area has always been quite transient. We don't want 15 college kids crashing in an apartment. We want people to hunker down and stay," Tom Goodkind, chairman of Community Board 1's housing committee told The Journal.

Poor Lower Manhattan! Overrun with tourists, but no one wants to call it home.

kvelsey@observer.com

Almost as good entertainment as the Rent Guidelines Board (_rockinfree, flickr)

Surprise! The rent is going up again next year.

In a move that surprised no one, the Rent Guidelines Board cast a preliminary vote to allow rent increases between 1.75 and 4 percent for one-year leases and 3.5 to 6.75 percent for two-year leases, reports The New York Times.

The ranges will be narrowed to a single percent increase when the board takes its final vote on June 21. Last year the board approved a 3.75 percent increase for a one-year lease and a 7.25 percent increase for a two-year lease.

Of course, these increases apply only to the city's one million rent-stabilized apartments. If you number among the 53 percent of New Yorkers who live in a market-rate apartment, you're basically screwed.

But while the Rent Guidelines Board has been approving rent increases of about 3 percent pretty much without fail every year, some people thought things might be different this year. Just last week the board set the benchmark used to determine rent increases—the rise in landlords' operating costs—at 2.8 percent. It was the lowest number in decades, and it gave the many rent-regulated tenants a warm feeling so rarely associated with New York apartments.

Chalk it up too much hope or not enough, but the crowd did not take the news of the increase well.

"As in the past, protesters jeered from their seats during the vote, under the watchful eyes of police officers, who set up metal detectors at the front doors," writes The Times.

The crowd was smaller than it normally is, with tenants having to chose between the vote and an Occupy Wall Street march on Broadway scheduled for roughly the same time. Nevertheless, a few Occupy protestors did straggle into Cooper Union's Great Hall to offer their support, shouting things like "Greed" and "Shame on Bloomberg."

Still, it's early in the game, and the board's final number could certainly come in on the lower end of the range. Also, the "kangaroo court" will hold public hearings on June 13 and 18, for whatever that's worth.

kvelsey@observer.com

What's the rent? (dpapworth, flickr)

Yet more good news for tenants living in rent-regulated apartments! Rents will will still be going up, of course—don't be crazy, the rent always goes up—but this year could see the lowest hike in a decade.

The Rent Guidelines Board has set one of the benchmarks used to determine rent increases—the rise in landlords' operating costs—at 2.8 percent, The New York Post reports.

The landlords' operating cost increase is used to determine how much the rent can be raised on the city's roughly 1 million rent-regulated apartments. Last year, based on a landlord operating cost increase of 6.1 percent, the Rent Guidelines Board set rent increases at 3.75 percent for a one-year lease renewal and 7.25 percent for two years.

Heartening news for tenants, especially since the board has set annual increases at about 3 percent for the last decade, a decision that never fails to irritate both tenants and landlords, who have demanded more transparency, so they know why the board makes the decisions that everyone hates.

(Several state and city politicians are also calling for reforms that would require City Council approval of new board members and expand the types of professionals who can serve on the board.)

It's been a good spring for rent-regulated tenants. Not only has the city voted to renew the rent regulation laws (which came as no big surprise), but the Supreme Court has decided not to hear a challenge to rent control brought by Upper West Side building owner James D. Harmon Jr.

The Rent Guidelines Board will take a preliminary vote on rent increases Tuesday. Of course, the other 53 percent of the city's renters, who live in market rate rentals, will be subject to increases of whatever the hell their landlord feels like.

kvelsey@observer.com

Raising the (rent regs) roof. (rnguyen01/Flickr)

Even with a Supreme Court battle looming in the background, Mayor Michael R. Bloomberg didn't hesitate to sign a City Council bill extending New York's Rent Stabilization Law through April 2015.

"In order to extend the Rent Stabilization Law, the City must determine that a housing emergency exists to merit the need for rent stabilization," Bloomberg said in a release about the bill's passage, citing the city's vacancy rate of 3.12 percent to declare the requisite emergency.

The continuation of rent regulations, which come up for renewal every three years, has been championed by a slew of City Council members, including Speaker Christine Quinn, who made affordable housing a focus of her 2012 State of the City address.

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

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

But given that the policy is more than 40 years old, and some of the tenants who were its early beneficiaries have significantly bolstered their bank accounts since then, it's garnered its share of critics.

Most notably, James Harmon, a former federal prosecutor, and his wife Jeanne, who inherited an Upper West Side brownstone and would like to oust tenants who pay rents that are approximately 59 percent of market value (including one who has a house in the Hamptons). The Harmons have taken their case to the U.S. Supreme Court, arguing that regulation violates their property rights.

Others argue that while the laws are responsible for some outrages, like actress Faye Dunaway's rent-controlled $1,048.-2 a-month apartment on the Upper East Side, it primarily benefits people who couldn't afford to live in New York otherwise.

The Supreme Court is expected to hear the Harmons' case next month. Meanwhile, the city's many unlanded residents can breath a sigh of relief.

kvelsey@observer.com

Leaning on his time as HUD secretary during the Clinton administration, Cuomo called affordable housing "the building block of strong communities and a strong economy."

Says the gov:

In New York, more than 1 million people are protected by New York's rent regulation program.

However, this program is set to expire June 15, less than 5 weeks from now.

That would be a crisis for our state.

In fact, what we need to extend and strengthen our rent regulation laws, and we need to do it now.

Since 1994, over 238,000 apartments have been removed from rent regulation leaving middle class New Yorkers with fewer affordable options.

And by current standards it is estimated that over 130,000 more apartments could be lost to decontrol in the next few years.

More here, including a video. And our previous coverage of the rent-regs wars here.

tacitelli@observer.com :: @tacitelli

Now vacant in the Bloomberg administration: a job that requires being yelled at for hours on end, hosting countless public meetings, making decisions that will leave everyone mad at you. The pay: $125 a day.

Late last year, Marvin Markus sent the city a letter of resignation from his post as chairman of the Rent Guidelines Board, the agency that sets rent increases for the city's 1 million rent-regulated units. Now, with the post open, the folks at City Hall have the trying task of finding someone new to act as a sponge for vituperation from landlords and tenants, absorbing the insults and then setting a reasonable rent hike each year.

"Why anybody wants to do this is nuts," said Joe Strasburg, president of the Rent Stabilization Association, which represents landlords. "It's a thankless position."

Mr. Markus, a managing director at Goldman Sachs who didn't shy from fighting back at those who would scream at him at RGB meetings, is leaving the post after eight years on the job under Mayor Bloomberg, along with another five under Ed Koch.

He is no fan of the existing rent-regulation structure, and is one of few to actually propose a major overhaul of the system, which has a large share of critics on both sides. His plan would better factor in income, exempting the poor from paying more than they could afford while removing the responsibility from landlords of effectively subsidizing the regulated units.

Tenant advocates are most certainly not crying about the departure.

"Marvin Markus is leaving? Glory hallelujah," said Mike McKee, executive director of the tenant group Housing Here and Now.

Mr. McKee and other housing advocates have never been fans of Mr. Markus-they've labeled him Marvin Markup-characterizing him as pro-landlord, allowing major rent increases at times when tenants could not afford them.

The Rent Guidelines Board is a mishmash of members, with those who are to represent landlords, two who represent tenants, and five who represent the public at large. More than any else, the chair can expect to be the public face, and perhaps even earn a derisive nickname.

ebrown@observer.com

This was particularly true in the realm of the physical city: land use, planning, housing, development. An Oct. 26 speech by Mr. Bloomberg on New York in 2013 focused on implementing his existing initiatives-admittedly no small task. His prepared remarks used the words "continue" or "continuing" nine times. The past two elections, after all, gave rise or significant momentum to such concepts as the High Line and the mayor's plan for 165,000 units of subsidized housing, among other ideas.

Whether the mayor is completely out of ideas, holding back a long list of new innovations for the post-election period or, more likely, somewhere in between, The Observer queried various planners, advocates and economic development professionals on what City Hall could do in the next four years. The responses reveal no dearth of ideas-from cheap to expensive-should the Bloomberg administration opt to freshen its agenda.

What follows is a rather random list, without any specific order, value judgment or weight on feasibility.

Filling Vacant Land
One first stop could be a study that the administration itself commissioned in its second term that outlined a long list of large undeveloped sites that could be the launching pads for future growth. The 2006 study, by planner Alex Garvin, suggested ideas like decking a platform over the Sunnyside rail yards or the Brooklyn-Queens Expressway in Cobble Hill, and developing along the Bronx and Harlem River waterfronts.

Similarly, financial crisis or not, some urge the widespread private development of the often-underused vacant land in the city's Housing Authority projects.

"With existing zoning, you could build on some of those vast empty spaces," said Hope Cohen, associate director at the Regional Plan Association's Center for Urban Innovation.

Governors Island
The existing plans for the 172-acre Governors Island-build a $250 million park, thereby attracting development-glaringly reflect the era when they were conceived: when "billions," "budget" and "surplus" were said in the same breath. A new plan could be needed, and ideas such as removing a restriction on housing development or moving CUNY to the island have been bounced around.

Or perhaps something more radical: Multiple planners suggested moving the United Nations there.

More Rezonings
Much of the work that's come out of the Department of City Planning in the past six years has been a set of rezonings that allow office and apartment towers to sprout in formerly industrial areas (e.g., Williamsburg, the far West Side, Willets Point in Queens).

While many of the obvious candidates have been tackled already, there are a few neighborhoods or sites that are often pointed to as possible next steps. Seward Park, the set of empty Lower East Side lots, slated for major residential development for decades, has been held up repeatedly over political concerns. Hudson Square, the former printing-industry-heavy neighborhood north of Tribeca, was previously floated as a candidate for a big rezoning by Trinity Real Estate, which dominates the area. And there's the district south of the World Trade Center, Greenwich Street South, which has long been pushed as an area that could blossom with a set of new parks and development should someone just put a deck over the Brooklyn Battery Tunnel entrance ramp (the Downtown Alliance this fall has a campaign urging this).

Tax Reforms
The average annual tax for the buyer of a $750,000 Manhattan condo: $5,975. For a $750,000 co-op, it's $4,453. And for a small home of the same value: $3,301.

Various groups, including from inside the real estate industry, have long pushed for a bit of an injection of rationality into the tax structure-which would require going to Albany to get approval, though some changes could be made locally. When these critics have whined to the Bloomberg administration, officials have generally nodded in agreement, but done little to act.

Rent Reforms
If last year can be seen as a template, tenants and a number of Democratic legislators will make a concerted push to change state rent-regulation laws, attempting to further restrict landlords from converting rent-stabilized apartments to far more lucrative market-rate units. With the debate confined to Albany, the Bloomberg administration steered clear and said almost nothing on the issue. The city bit its tongue intentionally, a city official suggested, and plans to be ready to take a stance this spring.

"There was a reluctance to raise it before the election in a vague way and have it come off as pandering," the official said. "In actuality, it's something we're having substantive policy discussions about."

Of course, the existing laws are hardly a bright emblem of rationality-they allow a billionaire to be rent-stabilized, for instance, but only until his or her rent reaches $2,000 a month-and there have been many calls for a complete overhaul to the system.

Permanent Affordability
City-owned land has been given away to develop tens of thousands of units of below-market-rate housing under Mayor Bloomberg. But come 20 or 30 years down the line, those affordability requirements generally expire, leaving the city with less land on which to build, and less affordable housing.

Housing advocacy groups-the Association for Neighborhood and Housing Development and many others-have long been pushing permanent affordability in these programs, and there was a hope that the issue would gather steam this mayor's race.
It didn't.

(Though the mayor did revise his housing plan, scaling back new construction and emphasizing ways to protect properties headed for default and poor management, courtesy of the financial crisis.)

Institutional Knowledge
With the financial sector looking more feeble than once thought, many a planner has recently called for City Hall to light a fire in the institutional sector, growing hospitals and colleges around the five boroughs.

"Institutions will be a major source of growth in the coming years," said Vishaan Chakrabarti, director of the real estate development program at Columbia University and a former City Planning official. "We should do whatever we can to support the expansion of our medical, cultural and educational institutions."

Governors Island, anyone?

West Side, Revisited
The Bloomberg administration spent much of its first four years planning a new future for the far West Side, envisioning a plethora of office and apartment towers. The development isn't going anywhere until the economy recovers, particularly over the 26-acre rail yards, which would need two platforms, costing more than $900 million, just to be able to start building. There has long been a suggestion that the government build the platforms, then parcel out the development à la Battery Park City. (The Related Companies is the rail yards' conditionally designated developer.)

"If you look at Battery Park City, the landfill was done," said Barry Gosin, CEO of real estate brokerage Newmark Knight Frank, "Then, over time, it was developed."

"Nobody's going to build all at once anyway," he said of the rail yards, espousing a government-funded platform.

Then there's the Javits Center, currently undergoing a $460 million renovation. Dropped, at least for now, is talk of what to do long term with the convention center, which is far smaller than the event halls in other major American cities.

Among others, Mr. Chakrabarti, who once worked to expand Javits in its current space, said it should be relocated, using the value of its waterfront land to finance a move.
ebrown@observer.com

More from Eliot Brown:

Stuy Town's Columbus

With Stuy Town, Electeds Play Bailout Card on Freddie and Fannie

A Candid Ravitch Warns of $25 B. Budget Gap, Hints at Tax Overhaul

Some samples: The rent-regulation system “needs a wholesale reform”; there is “absolutely no rationale” for high-income decontrol; the city should implement a “rent tax” to subsidize middle-income tenants who can’t afford increased rents.

What was notable was that all of those statements came from the chairman of the city’s Rent Guidelines Board, the Bloomberg administration–controlled body that sets rent increase limits on the city’s 1.4 million rent-regulated apartments each year.

The chair, Marvin Markus, made a point to note that the views were his own, not those of the administration or of the board.

The main theme of Mr. Markus’ remarks—made at State Senator Pedro Espada’s forum on housing policy held at N.Y.U.—seemed to be that New York City’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.

For instance, on the subject of high-rent, high-income decontrol (often called luxury decontrol), Mr. Markus was less than kind, calling it, “probably the most irrational piece of the existing construct.”

“There’s absolutely no logic, in my opinion,” he said, “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’re Warren Buffet, or if you’re Bill Gates, and your rent is $1,100, you can stay. There is absolutely no rationale to that construct.”

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’s ability to pay into the rent-stabilization system, which currently does not consider income other than for high-income decontrol.

“It is clear that what the board does—that is, an across-the-board increase for one- and two-year increases—does not target the areas of stabilized stock that need larger increases,” he said. “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’s role in stabilization would be considerably more rational if the system accommodated an income-based approach.”

The political viability of such a plan is, of course, a different question, and it’s hard to imagine that legislators would accept a new rent tax to pay for this plan (which is modeled on a program already in place for seniors) without a huge fight.

But if there were “wholesale reform,” 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 are pushing for an array of new laws this session that would give tenants broad new protections, sparking a defensive fight from landlord groups.

Many eyes are on Mr. Espada, who is the new chairman of the State Senate’s housing committee. In his opening remarks at the event, he called generally for a middle-road approach to reforming the state’s rental laws, though he did not delve into specifics. (Tenant groups have been cold to Mr. Espada, as has the Daily News, with advocates passing out flyers that said in bold caps that “SENATOR ESPADA IS NO FRIEND TO TENANTS.”)