Judge leaves rent guidelines in legal limbo.

Based on the withholding of an incomplete and unrequired report by the Rent Guidelines Board (RGB) Chairman, tenant members of the Rent Guidelines Board have succeeded in obtaining a stay of the formal adoption of the recently voted rent increases for stabilized apartments that are supposed to be effective for leases beginning on October 1, 1998.

Owners, who by law must mail renewal lease offers to thousands of tenants 120 days in advance, have already begun mailing such lease renewals, and should continue to do so, owner organizations advise.

"Just check off the little box on top of Column C where it says the Guidelines haven't been set yet and may be adjusted by law," advises Dan Marguiles, executive director of the Community Housing Improvement Program (CHIP), who was unconcerned but annoyed by the court tactics. "This is the tenants making the waters turbulent for no reason."

Tenant reps Kenneth Rosenfeld and David Pagan succeeded in obtaining the stay based on the non-release of a report that RGB Chairman Edward Hochman had deemed incomplete. The RGB has already voted in favor of not considering the incomplete report as evidence towards the current guidelines increases, which are waiting formal adoption at 2 percent for a one-year lease and 4 percent for a two-year lease.

New leases are calculated using a new formula that can increase rents on a two-year lease by 20 percent and has other low rent supplements and increases based on the length of the previous tenancy. Owners who had long-term tenants paying very low rents hoped the new vacancy formula would allow them to "catch-up" and maintain their buildings before losing them to the city or bank.

Although Judge Louis York appears to call for an expedited hearing, there is no return date set, which some attorneys say leans towards a motion through yet another Order to Show Cause, after which a hearing date would be set by the judge.

Mitch Posilkin, counsel to the Rent Stabilization Association (RSA), which represents over 25,000 building owners, said for the case to "not to be deemed abandoned," either side must file papers for summary judgement by Wednesday, July 8th.

"In legal time, he's moving quickly, and although he alluded to a quick decision, he did not lay out a briefing schedule," explained Posilkin. If the tenants move for summary judgement, and Judge York agrees, the decision would most likely be appealed by the City of New York, which has been representing the RGB in the action.

The report in question was ordered by RGB Chairman Edward Hochman as a way of comparing newly rented apartment rents under the 1997 rent act with rents paid by the tenants just prior to their move. A mistake in his directions led to the new rents being compared to 1996 data, rather than 1997 numbers.

Even so, the New York State Division of Housing and Community Renewal (DHCR) has not yet released the 1997 rental data needed to complete the report. Additionally, the tenants were never asked on the survey form what they had paid in rent just prior to their move, nor were questions asked that would have determined whether the rent being paid was the entire rent, or merely their share of a larger pie.

Still, tenant rep Rosenfeld told PEW that he had been given the 2,000 raw survey forms, and of 20 he actually perused, 10 showed what he thought were "very high rents."

The tenant reps would like the incomplete report released to the public and the RGB, providing for a comment period, and then would allow the RGB members to vote on the new guidelines again.

Rosenfeld told nEW he would ultimately like to see "no one paying increases in rent that would make them pay more than $1,500," a stand that could take the form of a proposal before any new meeting of the Rent Guidelines Board.

Under the 1997 rent act, those apartments renting for more than $2,000 become destabilized upon vacancy and can have new rents set by owners. As owners point out, tenants have the option of not leasing a new apartment at a rent they cannot afford, and indeed owners similarly want to make sure new tenants have enough income to cover whatever rent they contract for.

The City's Corporation Counsel has already successfully had an earlier stay by Judge York lifted in the Appellate Court, and in the worst case, owners believe the RGB members would simply read the report and then vote for the same numbers that have already been approved after two previous votes.

"The tenants are trying to make this final report a secretive thing that the chairman was trying to hide, rather than recognizing the truth is that the incomplete data is unusable," said Joseph Strasburg, president of the RSA.

Judge York was a former legal aid attorney, while the tenant members' attorney, Jerry Goldfeder, known for representing West Side foes of the Coliseum redevelopment, is one of the Democratic primary candidates for retiring State Senator Franz Leichter's seat.