Testimony: Dale Goodson

The following testimony was submitted by Dale Goodson, a rent stabilized tenant and neighborhood activist who has lived in his apartment for over 20 years:

My name is Dale Goodson and I have lived in my rent stabilized apartment at the corner of Avenue A and 12th street in the East Village since 1991. I am now 60 and moved to New York in the mid-80's from Seattle to pursue my career as a performance artist and free-lance writer. My work has always had a topical and socially conscious bent and consequently was not always the most commercially viable. I was drawn to New York because of the vibrant mix of cultures, thriving artistic scene and an economically feasible housing environment. You didn't have to be rich to part of the fabric of the city. 

In 2000 an opportunity came up to work as a homeless outreach worker at the Port Authority Bus Terminal and that work became the focus of my life. Again, not the most financially lucrative job, but tremendously satisfying in so many other ways. Unfortunately 2008 took it's toll and the program I was working for was cut. In addition, in 2005 our building was sold and the new owners began a policy of turning vacated apartments into market rate housing for NYU students. Admittedly they have not used untoward or harassing tactics against long term tenants, but the culture of the building began to change immediately. Virtually all of the culturally diverse and senior tenants have moved out. We've are slowly turning into a college dorm. To date about a third of the 40 apartments in our building have gone market rate. Most others are still rent stabilized. 

I am now back to hunting up free-lance writing work and anything I else I can to stay afloat. The artistic scene and opportunities which once supported me have all but dried up. I have lived in NYC longer than any other place in my life. NYC is my home, but the relentless rent increases by the RGB are taking their toll. It never stops, even in the worst of economic times. I feel the vibrant cultural mix of New York is fast disappearing, giving way to a culture of the affluent. Given this trend I know of no neighborhood in the 5 boroughs I could afford to move to. Though my rent is low compared to market rate it is all that I can afford and each year becomes more and more precarious and unviable. My landlord on the other hand has an ever increasing number of market rate apartments to draw on for increased income as well as three street level businesses in the building and yet every year the RGB asks for more on his behalf. This is a destructive policy which not only brings hardship to those who can least afford it, but is fast turning New York City and the East Village in particular into a high income playground.

Testimony: Ben May

The following testimony was read by Ben May, a tenant in Washington Heights whose building was purchased by multi-billion dollar real estate investment trust:

Although I am testifying on behalf of tenants, ironically I find myself actually representing a group of landlords who are not present today. My landlords are John Harrison Streicker and his daughter Margaret Streicker-Porres. Mr. Streicker founded his real estate company, Sentinel, in 1969 and grew it into the $4.5 billion company that it is today. Sentinel owns properties in 28 states, around 10% of which are in the Northeast of the United States. Ms. Streicker-Porres founded Newcastle Realty Services, our management company and one of almost 500 subsidiaries of Sentinel, in 2004. Today Newcastle manages $400m (according to their website) worth of Sentinel's assets in the New York city area. 

When our building was purchased, for under $10 million two years ago, Newcastle promptly took away every preferential rent, and raised the rents on every non-regulated unit in our building substantially. As a result, around a dozen tenants moved out. All of those units were gut renovated and all have been since filled, at prices in most cases double or more than the prior monthly rents. In one particular case, an elderly couple in a rent controlled unit, the rent quadrupled for the new tenants. Our building of around 50 units now has approximately a half dozen one- and two-bedroom units remaining that are rent stabilized, which range in price from $900/mo to just under $2000/mo. 

I sympathize with the plight of the small landlords who have testified here today. I think however that the board may be getting a skewed picture of reality when it is the small landlords that testify and those like my landlords are not present to tell their stories. I ask that the board consider all landlords in New York City, and keep in mind that there are a large number of large, rich, powerful, and intelligent landlords in addition to the small resource-poor ones that have spoken here today. 

Finally, I find it very interesting to hear from landlords today that the only thing the board should consider is the incomes from regulated units. As far as I know, with the exception of condominiums and coops, when landlords buy and sell buildings, they are buying and selling all the units in a building simultaneously. So it seems strange to me to not consider the income of the entire building, rather than individual apartments, since the unit of ownership is the whole building, not just individual apartments within that building. 

I ask that the board consider increases on the low end of the proposed range.

Testimony: Sam Stein, Tenants & Neighbors

On Thursday, June 13th, over 100 tenants testified against the Rent Guidelines Board's unusually high preliminary guidelines (3.25% - 6.25% for one year leases, and 5% - 9.5% for two year leases), as well as their decision to jettison an outer borough hearing. We heard from apartment tenants and SRO tenants, long term residents and relative newcomers, young and old, representing diverse communities of regulated tenants from around the city. Across these differences, there was a unified message: the RGB's proposed increases are way too high. In today's economy, tenants simply cannot afford them. The board must reconsider, and reject these unwarranted increases.

We will be posting the testimonies of a few tenants who spoke out that day, starting with Tenants & Neighbors' Rent Regulation Campaign Coordinator (and rent stabilized tenant) Sam Stein. Want to share your testimony with us? Please email a copy to sstein@tandn.org.

Good morning. Thank you to Chairman Kimmel for holding this hearing today, and to all of you for hearing the testimony of rent stabilized tenants about the proposed guidelines for renewal lease increases. My name is Sam Stein, and I am an organizer at New York State Tenants & Neighbors, a grassroots organization that helps renters preserve at-risk affordable housing and strengthen tenants’ rights in New York. We represent approximately 2500 tenants, most of whom are rent stabilized, almost all of whom have low or moderate incomes, and many of whom are elderly people on fixed incomes. I am also a tenant in a rent stabilized apartment in Queens. 

As a representative of my organization and our members, I have attended every public meeting that this board has held over the past 4 months, and read each report that the board staff has ably produced. Based on the information presented to the board by both staff and invited experts, as well as my experience counseling rent stabilized tenants from around the city, I believe the preliminary guidelines this board has approved are far too high. 

• As the Income and Affordability report showed, tenants are facing dire economic conditions, with unemployment rising again, wages declining, and nearly a third of rent stabilized tenants city-wide putting half their income towards rent.  

• As the Income and Expense study reported, landlord’s net operating incomes have risen for the 7^th consecutive year. 

• As the Mortgage Survey showed, the market for rent stabilized buildings remains strong, even in light of a national housing crisis. 

• According the RGB’s “Changes” report, at least 9,499 apartments left rent stabilization last year. That is a staggering number: it’s more New Yorkers than complained about bed bugs at the peak of that crisis; it’s more New Yorkers than were killed by cigarettes last year; it’s more New Yorkers than are on the organ donor waiting lists. It’s an ongoing crisis in this city, and one that the RGB must take into account as it considers an abnormally high preliminary range of rent increases. 

I’d like to address the public members, because how you choose to vote is of the utmost importance. Mr. Kimmel, Ms. Levy-Odom, Ms. Moore, Ms. Shine, and Mr. Wenk: on April 30^th, you voted for a preliminary guideline of 3.25% to 6.25% for one-year leases, and 5% to 9.5% for two-year leases. We believe this entire range is above the level many tenants can afford, and beyond the need of most landlords. Additionally, the proposed guidelines under consideration today would send many apartments over the vacancy decontrol threshold, setting them up to leave rent stabilization when the current tenant leaves. This would impact not just the rent stabilized tenants we and our allied organizations represent; it would also disrupt the stability and change the character of the these tenants' communities, and would have broader implications for our city as a whole. As you are representatives of the public- of the New Yorkers who care deeply about their neighbors and about the communities in which they live- I would like to ask you each, personally, to vote for a significantly lower adjustment this year than what was approved at the preliminary vote. Additionally, if a proviso targeting lower rent apartments is once again introduced this year, I ask you to reject it. As data from the Community Service Society has shown time and again, these provisos disproportionately fall on the backs of the poorest, oldest and most long-term of rent stabilized tenants. The tenants we represent, and many others, simply cannot afford these kinds of increases. 

We urge the board to consider holding rents still in 2013. If you determine that this is not possible, we encourage the board to consider the lowest possible rent increase, and ask you to remember the tenants who testify here today, and the hundreds of thousands more who this rent increase would affect.

Testify Thursday!

The RGB has heard from their staff about economic landscape facing tenants; they have heard from invited experts from both the landlord and tenant side; they have heard from government agencies that deal with housing. Now it's time for the RGB to hear from us.

Tenants have just one chance to speak out about the board's unusually high preliminary guidelines, and this is it: Thursday, June 13th, at 49-51 Chambers Street, starting at 10 am. Registration closes at 7 pm, but testimonies will be heard until everyone who has registered has a chance to speak. You can pre-register by calling the RGB at 212 385 2934, or you can register in person on Thursday. Tenants have 3 minutes to testify. Sometimes board members- either tenant members, owner members or public members- will ask follow up questions about your testimony. Don't be nervous- we are just telling our stories, and expressing the truth as we see it.

The Rent Guidelines Board needs to hear directly from tenants about the kinds of economic straights these proposed increase could put us in. They need to hear about the difficulties we face every day just to pay the rent, and the importance of long-term tenants to our neighborhoods and our city. They need to hear about the difficulty of finding suitable housing if we can't afford to stay in our rent stabilized apartments. And they need to hear about all the ways landlords manage raise rents, on top of the increases passed by the board. Please come and share your story with the Rent Guidelines Board. This is our one chance to formally speak out against these proposed guidelines, which would push too many of our homes beyond our budgets and towards deregulation.

To RSVP, or to request additional information about the hearing, please contact Sam Stein at sstein@tandn.org, or call 212 608 4320 x316. Tenants & Neighbors can help you prepare your testimony, or answer any questions you might have about the process. Tenants & Neighbors staff will be there in our white and blue t-shirts, so please look for us and come say hi when you arrive.

The RGB has proposed rent increases of 3.25% - 6.25% for one year leases, and 5% - 9.5% for two year leases. They have to hear from tenants that this is simply too high.

200 Tenants Attend Bronx "People's RGB" Hearing

It turns out that if you hold a public hearing on rent increases at a time and place that's convenient to tenants, they show up in droves to tell their stories. Unfortunately, only the tenant members of the Rent Guidelines Board attended last night's "People's RGB" in the Bronx. It's a shame, because the rest of the board missed many thoughtful and heartfelt testimonies from tenants who will be unable to speak at the Board’s one public hearing, to be held in lower Manhattan, primarily during working hours. It may be the case that meeting halls are expensive and attendance at recent hearings has been dwindling, but CASA and Tenants & Neighbors offered the RGB a free space and a guaranteed high turnout, and the RGB still declined. The Rent Guidelines Board missed an important chance to hear from tenants about the impact their proposed guidelines would have on households across the city.

Here is the New York Times' take on the RGB's 2013 calendar:

Rent Board Trims Roster of Hearings on Increases

By WINNIE HU

Even as many New Yorkers face substantial rent increases, they will have one less chance to complain about it.

Citing poor attendance in the last few years, the Rent Guidelines Board, a nine-member board appointed by the mayor, has eliminated a public hearing this month that has traditionally been held in the Bronx, Brooklyn, or Queens since 2005. The remaining public hearing will be held in Lower Manhattan on June 13 from 10 a.m. to 7 p.m.

The rent board is proposing to allow rent increases for tenants living in about one million rent-stabilized apartments in New York City. For a one-year lease, the proposal would allow an increase of from 3.25 percent to 6.25 percent; it would be from 5 percent to 9.5 percent for a two-year lease. Last year, it approved rent increases of 2 percent and 4 percent, respectively, after a dip in landlords’ operating costs. The board will make a final decision on June 20.

Renters outside Manhattan, and their advocates, say that many people want to testify this year because of the large increases that are being proposed, but will not be able to get to the Manhattan hearing because they cannot afford to take time off from work, or would find it difficult to travel there.

“This arrangement all but assures the working people most affected by the board’s decision will be unable to participate, and their voices will have no bearing on the final rent increase decision,” Bill de Blasio, the public advocate, said in a letter to the board. “This is not a mere inconvenience — it is a downright failure of the democratic process.”

In protest, tenant groups organized a hearing of their own on Wednesday evening in the Bronx that drew more than 180 people. Susanna Blankley, director of housing organizing for Community Action for Safe Apartments, a project of New Settlement Apartments, said they had invited the rent board to attend, but the majority did not respond. The proposed rent increases are higher this year to help cover the increases in operating costs for rent-stabilized buildings, including the cost of real estate taxes, utilities, labor and insurance, said Jack Freund, executive vice president of the Rent Stabilization Association, which represents about 25,000 building owners and managers. He noted that the price index of operating costs for rent stabilized buildings rose by 5.9 percent this year, compared with 2.8 percent last year. “It’s a necessary increase,” Mr. Freund said. “If you want to maintain that work force housing, you have to pass along the cost increases.”

Andrew McLaughlin, executive director of the Rent Guidelines Board, said the board had seen declining attendance at public hearings since the 1990s, when a few hundred people would rise to speak, and the board members would stay as late as midnight. He said that so few people attended the Queens meeting in 2010 that board members sat for an hour with no one to listen to. Last year’s meeting in the Bronx drew 21 speakers (of which 12 were tenants) compared with 55 in Manhattan, he said.

Tenant advocates say that many people do not know about the hearings because they are not well publicized, and the information is provided only in English. Mr. McLaughlin said that notices were sent out to major media outlets, community boards, council members and others, and that translations into Spanish and other languages are available through a function on its Web site.

Mr. McLaughlin added that the board, which had to cut its budget 20 percent last year, to about $450,000, saved between $4,000 and $5,000 by not renting space for the second meeting. He said that the Manhattan meeting was extended by an hour this year, to 7 p.m., and that the board would stay to listen to anyone who had registered by that time.

But renters like Alfreda Lee said it would be difficult, if not impossible, to get there in time. Ms. Lee, 59, said she answers phone calls on a domestic violence hot line in Brooklyn until 6 p.m. or later on weeknights. “We have to work full-time jobs to pay rent,” she said. “If you really wanted to hear from people, you would make it fair.”

Tonight: Tenants Host Bronx RGB Hearing

The Rent Guidelines Board is a public body. As such, it has a responsibility to seek input from the public, including rent stabilized tenants. This year, the RGB is holding just one public hearing, in lower Manhattan, primarily during work hours. This is not only insufficient, but unacceptable. After an offer of a free meeting space and a guaranteed turnout of tenants in the Bronx was rejected by the Board, tenants mobilized to hold their own hearing, drawing press coverage and the support of numerous elected officials. That hearing will be held tonight. Tenants strongly encourage RGB members to attend, as this is the best opportunity to hear directly from them about conditions in rent stabilized apartments, the toll of escalating rents, and the impact a high RGB increase would have on rent stabilized households. 

Information about the tenant-led hearing is below.

For Planning Purposes: Wednesday, June 5, 2013

Contact: Raymond Rodriguez, raymond@berlinrosen.com, 646-200-5309

Bronx Residents To Hold Public Hearing on Proposed Rent Increases After Rent Guidelines Board Overlooks Outer Boroughs

Board Proposes Over 6% Rent Hike Despite “No” Vote By Tenant Members

WHAT: Bronx residents will hold their own public hearing to express opposition to the Rent Guidelines Board’s proposal to increase rents between 6.25% and 9.5% on stabilized apartments. This year the RGB is refusing to hold a hearing in the outer boroughs, making it difficult for working families and tenants to provide input on the rent hikes. The Board’s two Tenant Members, who voted against the proposed increases, will facilitate the hearing.

WHO: Bronx tenants who will be impacted by proposed rent increases, RGB’s Tenant Members, the Community Development Project at the Urban Justice Center, New Settlement Apartments’ Community Action for Safe Apartments (CASA), Elected officials include: Speaker Christine Quinn, Public Advocate Bill de Blasio, Councilwoman Helen Foster, Councilwoman Annabel Palma, Councilman Ydanis Rodriguez, Assemblyman Brian Kavanaugh 

WHEN: Wednesday, June 5, 5:30PM

WHERE: New Settlement Community Center, 1501 Jerome Ave. at 172^nd St., Bronx. D or 4 train to 170^th St.

BACKGROUND:  The RGB, which establishes rent adjustments for 1 million dwelling units and whose members are appointed by the Mayor, recently adopted a proposal to increase rents up to 6.25% for stabilized tenants with 1-year leases and up to 9.5% for 2-year leases. The Board’s two Tenant Members voted against the proposed increases because these increases are unaffordable to tenants throughout the city, especially in low-income areas of the outer boroughs.

Traditionally, the RBG holds outer borough public hearings for tenants to share their opinions on the proposed increases, but this year the Board decided it will only hold one daytime hearing in Manhattan therefore not taking into consideration tenants from the Bronx. The Bronx, where the average family income is $38,000, has the highest concentration of rent-stabilized apartments.

Analysis: Housing Supply and Changes Reports

At their final public meeting this morning, the New York City Rent Guidelines Board released their last reports of the year: the 2013 Housing Supply Report, and Changes to the Rent Stabilized Housing Stock in New York City in 2012. These reports look at additions and subtractions to the universe of rent stabilized apartments, as well as patterns in new construction, renovation, conversion and other changes to the general New York City housing stock.

Lurking behind the figures in these reports is a quirk in the rent regulations. Since 1993, New York’s rent stabilization system has contained a poison pill- the Vacancy Decontrol system, whereby empty apartments that could rent for over $2,500 are brought out of the regulatory system and into the “free market”. This has given landlords a target to reach, creating an even greater incentive to exploit every loophole available in the system to raise rents. As a consequence, landlords will seek high turnover in their apartments, so that they can collect “vacancy bonuses” and Individual Apartment Improvements between tenancies. To extract higher rents from long term tenants, they rely on Major Capital Improvements and Rent Guidelines Board increases, and lobby for the highest imaginable increases annually. Eventually, their apartments hit the magic number of $2,500, and loose the price and eviction protections associated with rent stabilization.

In the face of deregulation- primarily through Vacancy Decontrol- New York City’s rent stabilized housing stock continues to decline much faster than it expands. According the RGB’s “Changes” report, at least 9,499 apartments left rent stabilization last year. (Most likely far more were taken out of rent stabilization, but this figure reflects the number of apartments that formally registered with HCR as deregulated.) That is a staggering number: it’s more New Yorkers than complained about bed bugs at the peak of their reign of terror; it’s more New Yorkers than were killed by cigarettes last year; it’s more New Yorkers than are on the organ donor waiting lists. It’s an ongoing crisis in this city, and one that the RGB must take into account as it considers an abnormally high preliminary range of rent increases.

The city did add some rent stabilized apartments to the housing stock, but many of them are far beyond the realm of affordability. A very large portion of new rent stabilized apartments come from tax abatement programs that mandate temporary rent stabilization. But in the case of 421-a, a tax credit that added 2,509 rent stabilized apartments to the stock, the average rents are $3,106. For that to be considered affordable by federal standards, residents would have to make $124,240; the average income for rent stabilized tenants, however, is less than one third of that figure- just $37,000. Much of the new rent stabilized housing, therefore, is not only temporary but out of reach for most prospective renters.

Perhaps as a consequence of the disappearance of affordable rent stabilized housing, and the paucity of vacant rent stabilized homes, rent stabilized apartments are also some of the most crowded. About 14% of rent stabilized housing is overcrowded; 5.6% is considered “severely” squished.

In the meantime, like oil in Texas, real estate in New York continues to thrive. After the downturn in construction in 2009, new permits have risen every year for the past three years, with permits for 10,344 apartments issued last year. The Bronx is especially booming, with a 128.7% rise in new permits in 2012.

Approximately 9,455 new apartments were constructed, matching nearly 1-to-1 the number of apartments that were deregulated. Many- if not most- of these new apartments are of the luxury variety, and do nothing to stem the loss of affordable housing in New York City.

The two reports issued today depict a rent stabilization system facing planned obsolescence, and a resilient real estate industry that expanding while other segments of the economy contract. An oversized rent increase will hasten both of these trends, and push the city further into its housing crises. For these reasons, and for all those articulated in previous Rent Guidelines Blog analyses, we contend that the board should act with restraint and pass as low a guideline as possible.