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Candidates, let's talk affordable housing?

We're half way through September as I write this and I admit I'm very much aware that the mayoralty and other candidates for high city office are not hotly debating affordable rental housing issues. These issues deserve that kind of attention. Why shouldn't the candidates discuss the need for more low- and middle-income housing and the impact of rising costs and restrictive rent laws on affordable rental properties?

It is apparent to all who invest in the rental housing business that these properties can't survive without adequate rental income and, in fact, are on a collision course with abandonment. If our candidates won't discuss this now, then when?

Why shouldn't the candidates acknowledge the essential nature of the shelter industry and debate the charge by owners that rent regulations are inhibiting the private development of low- and middle-income rental housing? And why shouldn't the candidates begin talking now about a meaningful phase out of rent laws? I'm know, of course, the legislature recently extended the rent laws for four years, and authorized the beginning of decontrol (albeit only for very high-rent apartments and high-income families). But owners of affordable rental housing need to be given a sense of hope right now that the government understands their plight under the rent-law restrictions, and will ease that burden. Discussions by the candidates of how they would deal with the rent laws, including an eventual phase our of controls, would create that hope.

Most owners of affordable apartment buildings I speak to are deeply concerned about the financial impact -- immediate and potential -- on their operations of higher real estate taxes, water charges, environmental capital improvements and more. But they also realize that Rent Guidelines Board rent increases have not enable them and probably will not enable them to keep up with escalating costs.

Why aren't the candidates talking about the city's water metering program? Under it water costs soared for many owners who went ahead and installed water meters before the city put a hold on this program because it feared a rising tide of abandonment. But the stay is not permanent. And there is no way that owners can afford the higher costs that emerged under the water metering plan--better than 50 percent increases in many instances. Water has to be paid for and conserved, and this topic should be on the candidates' agendas.

In fact, why aren't they talking about all the environmental issues? The resolution of these issues will be expensive and could threaten the economic health of affordable rental housing. The costs of curing environmental problems may well impact the availability of rental apartments and the corporate survival of some owners of smaller rental apartment properties. In addition, why haven't the candidates been debating real estate taxes, which continue to be out of control? The real estate trade media publicized the fact that real estate taxes rose for multi-family property owners this summer despite assurances from political leaders that they wouldn't be increased. But the state equalization assessment board raised values, based, I have read, on old and no longer accurate data. As a result, real estate taxes rose about 4.6 percent. And this increase came on top of previous insupportable real estate tax increases.

Where are owners supposed to obtain the fund to cover higher costs? According to some date I received recently from the Rent Stabilization Association's Jack Freund, the Rent Guidelines Board can't be counted on to deal with the issue. Freund cited a report from an owner showing that the Board's authorized increases in the past 25 years didn't even come close to matching the 339 percent increase in the Consumer Price Increase that occurred in that period.

During the past 25 years, he explained, most tenants signed two-year leases and had their rents increased by the amount allowed by the Guidelines Board. The aggregate two-year-lease increases during the 25 years, he said, came to 189 percent, and this means that the total of the Consumer Price Increases was more than 55 percent higher than what owners received from the Guidelines Board.

The BRAB, Ruben Klein president, is the largest owner-industry organization in the Bronx. BRAB represents more than a thousand owners of 2,000 buildings housing over 150,000 residents. It offers members a full range of services, including labor negotiations and representation, informative seminars and periodic newsletters. Over the years, BRAB has participated with other city organizations in bringing and defending all necessary lawsuits.
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Title Annotation:The Owner's Voice; affordable rental housing should be on agenda of New York, New York mayoral and high city office candidate's agendas
Author:Klein, Ruben
Publication:Real Estate Weekly
Article Type:Editorial
Date:Oct 6, 1993
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