Cuomo Bows to Big Real Estate on Rent Reform

With the deadline to pass a state budget basically a week away, Governor Andrew Cuomo has backed down on passing

With the deadline to pass a state budget basically a week away, Governor Andrew Cuomo has backed down on passing two controversial changes to New York’s real estate laws. He said at a press conference in Albany yesterday that rent-regulation changes and a property tax cap are “too complex” to put in the budget.

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In a surprise move last week, Mr. Cuomo said he wanted to include both provisions: “My position is I would like to see them done in the budget,” he said during a presser with all four legislative leaders.

But Democrats told The Observer that staunch opposition behind closed doors from Republicans and Big Real Estate caused the governor’s flip-flop yesterday. “Senate Republicans have been obstructionist,” Senator Adriano Espaillat, of Northern Manhattan and the Bronx, who is leading the campaign for what proponents call rent reform on behalf of Senate Democrats, said in an interview. “They have worked very hard at preventing this issue from coming to the budget. We have not launched a campaign to prevent a property tax cap.”

Joseph Strasburg, head of the landlord-friendly Rent Stabilization Association, told The Observer he has not spoken with the governor in the last week. “We’re not going to negotiate against ourselves,” he said, indicating he vigorously opposes linking rent reform to a property tax cap. Real Estate Board of New York president Steven Spinola, however, earlier expressed openness to raising the cap at which apartments can be destabilized, which currently sits at $2,000.

Republican majority leader Dean Skelos recently came out publicly in opposition to including rent reform in the coming week’s debate, even if it was connected to a property tax cap. “I think both rent control and even the property tax caps should be discussed after the budget,” Mr. Skelos said.

Democrats insist the governor, a former HUD head, is commited to rent reform, a top priority for members of his party with thousands of rent-regulated tenants in their consitutuencies. The lead bill would raise the threshold for deregulation to $3,000 a month; stop converting vacant apartments to market rate; close some of the loopholes landlords commonly use to raise rents; and return most of the apartments deregulated in the last 20 years to stabilization. As The Observer previously reported, this puts Mr. Cuomo in a difficult position because Big Real Estate, his largest donor, is deeply opposed to restrictions on rent.

Rent regulation is set to expire June 15, affecting more than one million city apartments, and Democrats fear that if they wait until the end they will have little leverage to strengthen the legislation. They’re trying to meet with the governor in a last-ditch attempt to have the reforms included. Mr. Espaillat said: “The ball is pretty much in the governor’s court.”

Cuomo Bows to Big Real Estate on Rent Reform