This is no longer 'business as usual.' (rent administration in New York State)(Profile of the Week: State DHCR Commissioner Joseph H. Holland)

As the new State "Czar" of Housing, Joseph H. Hollandis cautiously approaching what he calls the "battlefield" of housing. A Cornell and Harvard University law grad, Holland says he heard all the issues while representing both landlords and tenants in Housing Court, and as counsel to the New York State Senate's Housing Committee while preparing legislation. He also helped develop a men's shelter with a Harlem church and then opened a Ben & Jerry's ice cream shop to employ the residents.

Rather than continuing policies forged over the last 20 years, however, Holland says "This is not business as usual." Agreeing with Governor George Pataki's mandate to downsize government as well as to "wipe the slate clean," Holland is firm about making rent administration fair.

Holland plans to make this first year as commissioner a time of assessment and review before taking final positions on what he calls the global, and most contentious, issues of vacancy decontrol and the expansion of luxury decontrol.

"This is really a new era," he says he tells tenant groups. "To the extent that the system was tilted in the past in favor of tenants, that's just going to stop. Our message is not real popular with certain groups, but it's one that has to be put out there."

That's the kind of firmness that makes owners groups delighted with the Pataki administration and tho otherwise soft-spoken Holland in particular. "They see the differences and experience the differences already," he says. "They have certainly let us know they see us going in a positive direction and want us to continue."

When speaking before tenants groups, however, Holland likens himself to "Daniel in the Lion's Den."

Along with his job as Commissioner of the Division of Housing and Community Renewal (DHCR) that runs the rent administration system, Holland also sits on the boards of the Housing Finance Agency - that issues bonds and provides funds and grants for limited and non-profit housing; SONYMA, which provides mortgage financing and mortgage insurance commitments; the Low Income Housing Trust Fund; and the Roosevelt Island Operation Corporation.

As State Director of Housing, he has oversight over HFA, SONYMA, the New York Mortgage Loan Enforcement Administration Agency, the New York State Project Finance Agency, and other state agencies and public corporations involved in housing.

"The key word here is "leverage," says Holland. "We want to make sure we can stretch the state housing dollars as far as possible by combining them with private sector monies."

One of the agencies formerly under housing, the Medical Care Facilities Finance Agency (MCFFA), has been consolidated under the Dormitory Authority instead. Unfortunately, MCFFA was a "cash cow," Holland says.

"It's going to be a challenge because indeed, MCFFA was a source of a lot of money for the agency," agrees Holland, "and we will have to be more resourceful and more creative to sustain our programs."

One of his more difficult tasks is to re-invent the rent administration system. Holland is trying to upgrade technologically while downsizing and re-organizing the layers of bureaucracy.

The day before REW met with Holland at his Fordham Road office in The Bronx, a group of high level holdovers from the Cuomo administration were fired as part of ongoing re-staffing and re-tooling efforts that began with offers of retirement packages.

"We knew coming in that the transition was going to be at least a six-month process," explains Holland. "That's at least how much work was needed to be done internally." The staffing and placements are also being discussed with the governor's office.

"I've put together an excellent team and I feel very strongly we have the resources in place to get to the best possible result," Holland insists.

The new Deputy Commissioner of Housing Management is Leressa Crockett; the new Deputy Commissioner in Community Development is Joseph Lynch. "Both are individuals who have experience in the public and private sector," says Holland. The new president of SONYMA is Steve Hunt, a former Bank of New York executive, who took over from John G. Martinez. Paul Roldan is the new Deputy Commissioner for the office of Rent Administration, replacing Lula Anderson.

Consolidating Offices

Along with the requirement that district rent offices be maintained in all five city boroughs, Rockland, Westchester and Nassau Counties, Holland is also faced with two major rent administration offices, the Fordham Road office that employs 250 people and the Gertz Plaza office in Queens that employs 600, half of the entire personnel for the agency. They are also looking to downsize and bring the offices together, perhaps in some "cheaper space."

"We want to have better service, but the problem has always been the intricate system that has evolved over time," he says.

The mediation program begun by Holland's predecessor, former Senator and DHCR Commissioner Donald Halperin, is being continued and hopefully expanded.

"It's necessary because philosophically," Holland says, "I believe it's important to work things out and avoid the adversarial nature, but also, it's a necessity given the tremendous backlog of cases we have out at rent administration." There are "well over 70,000" cases backlogged, he sighs.

Paying for Claims

Among the items being discussed to cut down on the number of cases being filed is a "modest" payment for putting in a grievance against a property owner that would have to be approved by the State legislature.

"The example that we've looked at is Small Claims Court," says Holland, noting the filing fee in New York City is $15. "We see that as an analog for us because the basic rationale to institute a filing fee in Small Claims Court was to cut down on frivolous complaints." The data, he says, shows the fee has cut down on the number of complaints and has helped the Small Claims system to operate more effectively for those who have a legitimate claim.

"We're looking at it and we're talking to different groups about it to see how it plays," he says. "We feel it could be important in improving how the site works."

Less Discretion

They are also studying the amount of discretion that has been left to those who decide the grievances. "What we've found is that given the amount of discretion that certain administrators have exercised in the past, under the previous administration, it has tended to be tenant-oriented, which is a concern," Holland admits.

That discretion has resulted in service reduction decisions in instances where a doorman did not wear a hat or a hall was painted a different color.

Another decision resulted in an approximate $100,000 award including treble damages to a couple who rented from an owner who never registered a first rent on a Greenwich Village townhouse apartment because it was vacant at the time, so a DHCR staffer said not to bother.

"That is a case that's already hit my radar screen," sighs Holland, when reminded of the matter. "It's one of those that we're going to have to scrutinize and look back on. It's certainly not the intention of the law - as I understand it - to be punitive to an individual homeowner for neglecting to put in some paperwork. A balance has to be struck, but we don't want the inequities to be so extreme that you have a homeowner about to lose the building that otherwise has been properly managed and where services have been provided."

Mediation Groups

Holland's desire to mediate also extends to the tenants' and owners' group sessions. He too finds it ironic that in all the years of advisory group meetings, the owners and tenants have never met in the same room at the same time.

In fact, when it was time for the two groups to lobby in Albany, Holland recalls, "You just didn't want to be in the middle of that because you'd get run over in the process."

During testimonies, Holland complains, "It got to the point where the battle was the thing rather than the obligations that both sides have in order to maintain proper housing. We need to move the dialogue back to a plane where we can remove the battlefield and start talking about how everybody's responsible for housing. Yet if tenants continue to abuse the site and the landlords abuse the system, the system is going to break down."

Now that he's the executive in charge of housing policies, Holland says, "I figured I would try to exist in a truce-like atmosphere for the first part of my tenure, and at least, initiate some dialogue. Then at some point, [I would] take a very firm, strong, documented position. We're just not there yet."

That position would be one on vacancy decontrol, a button that keeps getting pushed - even by the governor last week - and to which tenants respond "harassment."

While Holland is a proponent of luxury decontrol, he believes the current system has to work first before he would consider "possibly lowering the threshold."

A Cornell football player, Holland is still quite obviously a team player. He hedges on issues along with the governor and takes firm stands on those that the governor has publicly expressed.

Holland even backed-off running for Attorney General when he realized the political bandwagon was rolling somewhere else. "So being a team player, I decided to support the governor's campaign," he recalls. "I see it as a wise decision, particularly since it was a winning campaign and I felt I was an important part of that victory."

Housing Court Issues

Holland smiles and shakes his head when reminded of his experiences in Housing Court. "I think the most frustrating thing was the adversarial nature of the business to the point where it's difficult to mediate and negotiate settlements between landlords and the tenants because the adversarial nature is so intense," he agrees.

"When so often, what suffers is the housing stock. Although I am not directly involved with Housing Court, I'm certainly committed to policies which would see how we can somehow get tenants and landlords to look at the larger vision of preserving and maintaining the housing stock."

Deposit of Rent

The thrust to maintain housing will be aided by requiring the deposit of rent in court. "We see this as an excellent measure to strengthen the housing stock by making sure that money that needs to go to maintain it is made available," Holland says.

"Of course, there are still kinks to work out and we are very interested in seeing what happens to the City Council resolution. We are not anticipating making any moves in Albany until we see the outcome of that battle."

He agrees that since many apartment units have been converted into cooperatives and condominiums, there is a whole new class of ownership with their own concerns and their own demands.

One such concern is the new rent that would be put in place for de-converted units after a foreclosure. Many are arguing these units should not go back under regulation. Another involves the ongoing lawsuits over units taken over by the Resolution Trust Corporation and the Federal Home Loan Mortgage Agencies, both of which are trying to wipe out statutory rent stabilized and rent controlled leases in buildings around the city.

"The complexion has changed, and I think that has a lot to do with what I think is a softening of attitudes about rent stabilization in the City of New York," Holland observes. "When you talk about luxury decontrol and vacancy decontrol, there is still a shrill of voices, but the voices don't seem to be as broad-based as they were ten/twelve years ago."

He also hears of the political shift from the upstate legislators who complain their constituents are more aware of the problems in New York City, including rent stabilization. "They are feeling much more pressure from their constituents about the positions they are taking," he said.

Concluding, Holland says: "My roll as Commissioner is yes, to regulate the rents, but it is also to set a new tone and try and use my office as a bully pulpit to say, 'We have to bring more sanity to the process and if not, we're all going to go down.' Because everybody agrees the ship has some big leaks in it, and is going nowhere fast."