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Aponte: housing in 'severe financial straights'.

The current recession in New York City is real estate based, and includes specific elements that are working against the real estate industry and putting housing here in "severe financial straits," New York State Director of Housing Angelo J. Aponte told a recent Annual Meeting of the Bronx Realty Advisory Board, Ruben Klein, President.

Commissioner Aponte pointed out that a "record number of foreclosures are taking place in the city, and he noted that "the Federal Home Loan Mortgage Corporation recently was called on to assist a major New York savings bank lender in danger of going under because of housing foreclosures."

Commissioner Aponte's address keyed strongly on problems facing rental housing owners in the current economic, regulatory and legislative climate. In doing that he reflected the remarks of other speakers during the meeting, including BRAB's Klein and Executive Director Carol S. Keenan.

Klein lauded the commissioner for his insights about the problems facing affordable rental housing owners, and he agreed with Aponte's statement that fundamental changes are needed to enable the rent regulatory system to provide landlords with equitable treatment and the ability to operate their properties on a sound economic basis.

Subsequently, the BRAB President said that Aponte was absolutely on target in his estimate that the new water tax based on a building's actual usage has the potential for bankrupting many affordable-housing owners. Klein urged the Commissioner to continue to support suspension of water-metering implementation until a fair way can be developed to apportion water costs.

In her address to the Annual Meeting, BRAB,S Executive Director Keenan reviewed more than a half dozen lawsuits that are being conducted on behalf of the housing industry. These included a suit attacking the constitutionality of the water metering program, and another one opposing the succession rights, granted tenants by the Department of Housing and Community Renewal.

Other suits, against the city and the DHCR, seek changes in the calculation methods used by the City Rent Guidelines Board and the DHCR in setting rent increases. This year, Ms. Keenan noted, the Guidelines Board has proposed rent increases that are less than the percentage rise in the Consumer Price Index. As well, she said, the DHCR's hardship increase procedure is just not working: "In the last seven years, DHCR has granted only one hardship increase."

Continuing, Keenan explained that "the Rent Stabilization Association is going back to federal court in June because things have not improved for owners in the city Housing Court. Last year," she explained, "as a result of a suit brought by RSA for the industry, a settlement was achieved with the Office of Court Administration (OCA) calling for several procedural changes, including setting down guidelines regarding show cause orders, reasons for a tenant not depositing rent in court, and scheduling one judge to follow a case throughout its court hearings . These are not being carried out on a regular basis. He asserted that the new water-use tax formula based on a building's actual usage is "a most regressive tax." He suggested that any necessary higher water taxes be imposed only on a gradual basis.

Commissioner Aponte acknowledged that the present rent regulatory system "delays justice so that there is no justice for landlord or tenant." In effect, Aponte confirmed what BRAB's Klein and other affordable housing industry leaders have been asserting for years when he said that the entire system is "overwhelmed and overloaded" and needs "fundamental changes."

The commissioner reported that he has "asked housing officials to look at the issues regarding city and state regulatory laws. Without fundamental changes there is not much I can do to improve the situation." He observed that because of budgetary restrictions he doesn't have a sufficient number of staff to run the agency properly. The Housing Director cited a case-backlog that once again is up to five years, and he noted that personnel at the DHCR exhibit an anti-landlord bias when they deal with major capital improvement rent-increase applications.

Aponte explained that he is dealing initially with the most "egregious issues" in the hope that some action can be taken at DHCR to address the backlog by grouping cases by class, and by computerizing the cases.
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Title Annotation:New York State Director of Housing Angelo J. Aponte addresses Annual Meeting of Bronx Realty Advisory Board in New York, New York
Publication:Real Estate Weekly
Date:May 27, 1992
Previous Article:565 Fifth Ave. tops out.
Next Article:BRAB announces contract pact with Building Service Employees.

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