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Census finds higher renter income.

The new Census Bureau's Housing and Vacancy Survey has determined that renter incomes are 17 percent higher than previously believed, said Doug Hillstrom, executive director of the Rent Guidelines Board (RGB).

The triennial study has just been released and for the first time, the Census Bureau imputed missing incomes and rents using its widely respected formulas. Previously, approximately a third of the tenants refused to provide that information, skewing the results of the surveys towards lower incomes and rents.

The new figures show that 3,137 rent controlled tenants and 53,590 rent stabilized tenants have incomes of over $100,000, buoying long-held owner beliefs that many tenants are being unfairly subsidized by building owners.

There were 1,912 rent controlled households bringing in over $70,000 a year but less than $100,000, while 53,309 rent stabilized households earned over $70,000 and less than $100,000.

Since Governor George Pataki mentioned a $50,000 cutoff figure for incomes as one possibility he was considering for deregulation last week, those making over that amount total 230,789 families in rent stabilized apartments and 8,423 in rent controlled apartments.

There are a total of 1,014,751 rent stabilized apartments and 70,572 rent controlled apartments in New York City. Another 625,936 apartments have unregulated rents.

"We've always taken a position that people were underreporting or not reporting their incomes, so it skews the assets," said Joseph Strasburg, president of the 25,000 owner members of the Rent Stabilization Association (RSA). "There are more people making over $100,000 a year than previously reported."

Dan Margulies, the executive director of the Community Housing Improvement Program (CHIP), a middle market owners' group, said what is striking to him, and was even beginning to be apparent in the 1993 HVS, is that the average household income in stabilized and unregulated units is just about the same.

"Now they are within a couple of hundred dollars," he said, which means, "You can't say that the stabilized universe requires special protection in the form of low rents because the unregulated universe has the same income and can pay more."

The 1996 figures also show that there are more people making over $100,000 in stabilized units than in unregulated rental units.

"You have twice as many people in unregulated units making that much," said Margulies, pointing to the HVS income data showing that income for 53,590 families in rent stabilized buildings versus 26,108 families in unregulated housing. Including rent controlled units, that regulated number goes up to 56,727.

The HVS data showed more than twice the number of regulated apartments have families making between $150,000 and $199,999 - 8,658 versus 4,822 - and more than twice the number of regulated apartment dwellers make between $200,000 and $249,000 - 4,933 versus 1,798.

Because of the 1994 deregulation legislation that allows owners to attempt to deregulate apartments renting for $2,000 or more where the renters make $250,000 a year for two years, the number of renters making that much money is now about the same as those in unregulated units - 3,840 versus 3,531.

While there is no doubt that senior citizens, the handicapped and the poor will continue to be protected, the territory being trampled in Albany includes discussions not only on vacancy decontrol with expanded penalties for harassment, but on expanding the deregulation of apartments where tenants are making anywhere from Governor Pataki's number of $50,000 on up.

While 155 public housing households earn over $100,000 a year and another 1,046 make over $70,000, Michael Schill, Professor of Law and Urban Planning & Director the New York University School of Law Center for Real Estate and Urban Policy, said those with higher incomes help keep public housing stable, but believes those income levels are higher than necessary for subsidized housing to maintain stability.

Public housing formulas call for tenants to pay a third of their incomes in rent, but rents too high would be capped.

One of the reasons New York City's public housing is comparatively more successful than in other cities, he said, is that New York City has been able to retain a mix of incomes, while other cities have made this the housing of the most poor or those that do not work.

Although the New York City Housing Authority has been able to keep an income mix, Schill says that is changing.

"It is starting to look like public housing in other cities and that is a problem," he said.

New Federal legislation under consideration is attempting to facilitate an income mix, because if the rules state that as soon as a resident's income goes up they have to leave, "it creates a disincentive and you are losing the most stable elements of your tenancy who can be role models," said Schill.

What he says the vacancy survey is showing with respect to average incomes for each of the rental market segments is that they went up, and in some cases went up substantially.

"There's been an economic recovery in the city and that has contributed," said Schill, "but when you look at the gross data, poverty rates also went up."

But he also notes that for all housing, overall rent burdens are going up, "which suggests that as average incomes are going up, rents are also going up."

Schill also said, "The point that there are some people who can afford not to live in rent regulated buildings is important and has implications in the housing market because those are people who have a lot of resources or rent-paying ability and could be out there creating demand that could lead to increased production of housing. If they weren't in rent regulated buildings, they might have the ability to get a developer to build market rate housing."

By giving those who can afford to pay more subsidized apartments, Schill says, "it distorts the signals" needed to spur housing production.
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Title Annotation:NY Census Bureau's Housing and Vacancy Survey
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 7, 1997
Previous Article:Cost increases low, RGB says.
Next Article:A way to eliminate landlord welfare.

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