Giuliani sends Bruno letter on Downtown rent controls.

Mayor Rudolph Giuliani finally sent his letter to Senate Majority Leader Joseph Bruno in mid-August, declaring that apartments created under the Downtown Plan "would be subject to rent stabilization to the same extent as, but to no greater extent than, other rent-regulated property," clearing the way for the Senate to pass the Downtown Revitalization Plan.

Various sources believe the Senate will return to session in Albany starting October 10th, after the Jewish Holidays and Columbus Day. Certain appointments must be confirmed and the Senate could also take up bills that were already passed by the Assembly, such as this one.

"Good letter," said Joseph Strasburg, president of the Rent Stabilization Association that represents 25,000 owners, after seeing a transcript of the letter. A spokesperson for the Mayor said they considered it a private letter and while it was read to REW, they wouldn't share a copy.

The letter goes on to say that "the city agencies responsible for administering the residential conversion and mixed-use programs will promulgate rules that reflect our intention to apply the rent stabilization law as a whole, including any provisions that exempt housing accommodation from rent stabilization, to property receiving benefits under those programs." The Mayor finishes with a request for assistance from Senator Bruno "to ensure the passage of this legislation at the earliest possible moment."

Mark Moss, vice president of the Real Estate Board of New York, said the letter "clears up any misunderstanding" with regard to the Downtown plan.

Strasburg said "This letter will smooth the way for action on the part of the Senate. I support Senator Bruno's position that we don't go backward [with rent stabilization] but we need to go forward. The Mayor had to state unequivocally that we don't go backwards on the philosophical issues, so if rents are in excess of $2,000, they are exempted."

Strasburg said those who are converting buildings to residential use should consider the condominium and cooperative market, as there is no question those units will not have to be subject to rent regulations.

As the target market for Downtown rentals would most likely be young people in the arts and financial services industries who are willing to be pioneers, a $2,000 rental for a studio or one-bedroom may be unrealistic, or be challenged when setting the fair market value.

To ensure the apartments do not fall into the purview of the State Division of Housing and Community Renewal, along with its attendant regulations, owners may have to build more two-bedroom and three-bedroom apartments and allow the sharing of apartments to keep the overall prices up and the per renter price down.