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'Senate will cave'.

One day before New York City's rent protection laws were set to expire Real Estate Weekly met with Assemblyman Howard Lasher(D-Brooklyn), chair of the Assembly Housing Committee. Senate Republicans were refusing to maintain the rent laws without some reforms. Assembly Democrats, meanwhile, were trying to push through a bill that would permanently extend the protections. The next day the State Legislature passed an eight-day extension, which keeps the regulations in place until midnight tonight.

Therese Fitzgerald for REW: On the eve of June, 15, the day the rent laws are set to expire, what do you think will happen tomorrow?

Lasher: I think the Senate will probably, in the end, cave ... will probably pass the bill. And that's what I'm hoping for.

It's an incredible process. The speaker's idea was a very good idea-to move out the bill very early to give the Senate time to react to it. Not to have, as they have had every year in the past, every two years when they renew, this midnight crisis on the eve of June 15. It's incredible for me to believe that the Senate would allow this bill to lapse. It's just such an important bill with such protections

Assemblyman L. Lasher for tenants. I don't know how they can't do it, but then again you never know what happens in the Senate. I'm hopeful that they will do it. I'm hopeful that this brinkmanship will stop and we can get together and do what's good for people.

REW: Why is the Assembly opposed to reform -- vacancy decontrol, luxury decontrol?

Lasher: Well, I don't know if that's reform. I mean that's just such an impossible type of happening. I don't know what you consider reform, but what has been put on the table by the Senate is a system whereby, depending upon your income, depending upon the amount the apartment goes for, that there talking about decontrolling those apartments. But if someone else moves into that apartment, all of a sudden it's got to go back to control, depending if somebody's income goes up or down, depending upon the year it goes in and out of control. It's an administrative nightmare. It's just not something that is workable at all. And I don't know if it makes much sense with the numbers that they're talking about. You take a large family with five children in the family. You have two working parents and they're scraping and they're making $100,000 a year. For them to go on vacancy decontrol, it just becomes something where the apartment becomes unaffordable. So does it make sense? It doesn't even make sense from a practical point of view, but then when you try to administer it, it's going to cost us a fortune to administer it and not have the return that we're talking about. So that is just not the way to go.

I don't know if there might not be other things that the Senate could have proposed or would have proposed or wanted to propose, but that certainly is not one of the ways to be equitable to people or even that is doable. So that's not a reform. That's just another nightmare. I mean DHCR (the Department of Housing and Community Renewal), in their applications, are four and five years behind. Could you imagine if you just start administering hundreds of thousands of apartments, and you have to monitor each one, and you have to watch it go in and out and now you have a protest. The landlord's saying 'Oh, he made $101,000' and the tenant says 'No, I made $99,000 or $93,000' and then we have to have a whole new process.' What we're trying to do, what we should be looking at, is trying to simplify the process - do something to lessen the burden of the task that DHCR has in adjudicating the violations, in adjudicating the rent increase applications, in adjudicating the MCI's and move those faster and that would serve everyone much better rather than creating another morass of administrative rulings and administrative hearings and administrative paperwork. It can't handle the paperwork as it is now. This would just foster a system that would be unworkable, more unworkable. As bad as the system is it would be much worse if that was the case.

REW: Owners of housing are also very concerned about lead-in-paint legislation? They're afraid, of abatement was required, it would bankrupt the industry?

Lasher: Well, I don't think it's the industry that we're dealing with. It's a specific portion of the industry. You're dealing with generally the older housing, those that are more marginal. If, as the City Council has passed the law basically that you need to do almost gut rehab of the whole apartment, pull all the walls out rather than just remedial where the spot is and they talk about the cost of $15,000 an apartment, if you're talking about a marginal building the landlord just doesn't have the money. One of the pieces of legislation that we passed last year is to give the City of New York the ability to give grants and work on some type of system to remediate themselves either in combinations of working with the landlords through a grant type system and an exemption type system to combat the lead paint-type problems. The lead paint problem has been compounded by another issue. And the issue is that the Insurance Department, in its wisdom, has decided that they were going to exempt lead paint -- given the lead paint exclusion in the policies they are now writing. Well, if I own a marginal building and I now can't get a policy because there probably is lead paint, where I fall within that category of built before a certain year in a certain area. I'm going to find that I'm in jeopardy of whatever assets I have at home. Most properties are held in partnership name. Probably, you'd see a lot go to corporate and that wouldn't serve the public well either because there is an incent of the problem of lead paint suits. That is a proper suit because of a lack of maintenance -- chipping paint, falling down. The person who is the infant is never going to be compensated for it. So what you've done is taken the insurance away from the building, taken the insurance away from everybody and then you haven't even compensated the victim. So it's a real, real problem and hopefully the City Council will become a little more realistic to the issue. And if it's not a little bit more I have advocated that every insurance policy on buildings must include a lead paint clause ... Let the insurance company go to the buildings, say to the owner 'Before it get's to the point, where the city intervenes and you have to do this and you have to do that, make some changes or else we're not going to insure you period.' But to force the lead exclusion in every policy, is just not the way to go. It's a terrible way to go.

REW: Tell us about your efforts to modernize public housing?

Lasher: We held a hearing on the modernization of public housing and what to do. And we found there is approximately $350 mill ion worth of modernization work needed to bring public housing up to present day standards. And we're not talking about making them fancy. We're talking about replacing windows. What is happening to much of the housing stock of the city is they were built 30 to 40 years ago. When you reach an age of 30 or 40 years in a building, your elevators start to go, your windows need replacing, your roof needs replacemennt, and even, sometimes, there are structural things that need to be shored up. These are basic problems of being able to live in the housing stock. If we lose the housing stock, if it deteriorates to a point where it is uninhabitable, to rebuild you're talking about billions and billions of dollars. The state puts in approximately $30 million for rehab and for modernization. If you take that over a 10-year period, by the time they finish the 10-year period, they won't even catch up with the modernization because we'll be 10 years down the road, So I think one of the things we have talked about and one of the things that came out of the hearing, which is very good, was to try to go ahead and do a bonding now of the whole amount to get the work into profess and then pay it out over a bonding period, which would mean we wouldn't be throwing in $350 million over a 10-year period and finding hat we haven't moved past the point where we started, but we would be able to do all the modernization right now, bring the buildings up to par and then pay it out over a 10-, 15- or 20-year period. And that would work and that seems a lot smarter than the current method in which we're using -- just patchwork.

REW: You spoke before about DHCR being overloaded. How would you streamline that agency?

Lasher: I think there's a real necessity to streamline it, to probably change, somewhat, the procedures. If you really need more people, let's put the people there. I think one of the provisions that the governor put into the budget, which was a provision to make an increase in the monies that are paid to the state, just became a morass because the landlords said 'Why should we absorb an increase?' Then there was some talk about taking part of that and putting it on the tenant's end. And then the tenants said 'Why should we absorb it?' And with that type of attitude, you're not going to get anywhere. We fund other aspects of the budget by putting real dollars where it is necessary. It's really necessary. I also think we need to look at changing the system, being able to streamline it, being able to do real good adjudications rather than the mess of paperwork that comes in. There has to be some speeding the system by adding money so people can do it or else changing the system to some type of quick administrative rulings - get in and get out. It's terrible when it takes five years or 10 years to work through an overcharge., If it's a senior citizen who's been overcharged, generally they're not going to be around by the time the adjudication is made and that doesn't help her. It doesn't help the system. It doesn't help anyone. And in the same way, if there's an MCI application by a landlord, it too has to move faster in order to give the impetus to keep the buildings up to date. So it's a real problem that needs to be resolved either by more money, more people or by changing the methodology that they use to make these determinations... to figure out why it takes so long.

REW: What is your response to statements that current rent regulation puts the affordable housing stock in jeopardy because of high water charges, high sewer charges, etc.?

Lasher: I don't know if it places it in jeopardy. I think that each of the issues you talk about - lead paint, water, sewer, taxes -- there is a realization by the city -- Felice Michetti's an excellent commissioner and she too has a realization - that these things are impacting negatively the housing stock. And I think that's why the city has had a moratorium on an increase on water and sewer. And they really have to take a look at the different buildings. They are actually looking at revamping the whole system seeing that that is necessary.

There are two competing forces, which make it very difficult. One is that we want to save water. Everybody remembers the drought that we went through very recently and the normal way you do that is you watch your consumption. When you do it on a frontage basis, the consumption is take as much as you want and not be charged for it. Well you're not going to conserve. So you want people to conserve, but you also don't want it to go out of kilter where you adversely affect those people that can least afford it. So what happens is, in your wealthier buildings, where you have middle-income, upper middle-income, you usually have a smaller family. You may have two people, one child, two children in the apartment or even you have a senior citizen... In the apartments you have two people, they go away in the summer, they take vacations in the winter and their usage of water in that apartment is minimal. You go into an area that's marginal and you find, because of reality, that you have families that are doubling up and tripling up. And when you have people that are doubling up and tripling up, you have eight people taking a shower in the morning everyday and the usage of water is just going to increase tremendously and these are the people who can least afford it. So you're asking them to pay more of a share of the burden and it's just not possible. So we've got to strike some type of balance between those people who can least afford it and those people who can afford it. And what they're talking about is some kind of system based on a flat base and then you have on top of that a consumption usage meter that you would pay for. Whatever the usage was, there would be less of an increase. Sixty or 70 percent would be the base. There would be 30 percent that would be flexible.

Now I think that they have to factor in the number of people in the apartment. They have to factor in what is normal usage. If 10 gallons a day is normal usage per person ... I guess that's very high. Then you have to say, if there are eight people in the apartment, they have the usage of 80 gallons a day. When they start to go over that 80-gallons a day, then there's an increment that should be charged. I think that would be much fairer and I think that's what they're looking at - how to implement that system. And it will probably go to the dual purpose of conservation and also be equitable.

That would also alleviate the problem where you have a leak in the building and you don't fix it. On a frontage system, a lot of people, generally-in the past, have just let it go and now they're going to be charged for it. So it will be a very strong inducement to the owner of the building to go ahead and fix the leaks. And if we can work out this type of equitable solution, then I think we will have gone a long way to solve the water problem.

The city is also taking a look at special problems where there's been tremendous jumps because they do not want to lose the housing stock. A lot of the housing in the city is marginal.

REW: We hear you are thinking of running for City Council?

Lasher: I'm not only thinking of running for City Council, I am running for City Council. I've circulated petitions. I think I can best serve my constituency by coming here. The whole nature of what the City Council is about has changed. At one time, they did street signs. They have become a real legislative body. It gives me the ability to be hands-on in my community. I think we're really at a crossroads in the city at this point. It's really a sink-or-swim situation. I love New York City and I think that I can help make it a city where people want to come to live, make it more viable.
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Title Annotation:commentary on Senate reaction to rent regulation vote from Assemblyman Howard Lasher of Brooklyn, New York, New York
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Article Type:Interview
Date:Jun 23, 1993
Previous Article:Rent regulation expires tonight: senators demand reform.
Next Article:Publishers expand at Flatiron Building.

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