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DHCR, HPD streamlining: will it work?

DHCR, HPD streamlining: Will it work?

The removal of rent stabilization and rent control would not be a "cure all" for owners' financial problems, Division Housing and Community Renewal Commissioner Anjelo J. Aponte said last week to a gathering of frustrated residential owners.

"You can be kicking up your heels and still wondering how to collect the rent from someone who's been laid off," he insisted. Aponte did not mention luxury decontrol.

Owners heard some good news, some encouraging news and some more of the usual from New York City officials at the Rent Stabilization Association's Government and Industry seminar last week at the Marriott Marquis. The all-day session, which was the third in a series of five events, brought out 300 owners who were not shy about putting the governmental representatives on the spot.

Speakers included Aponte; Robert K. Davis, deputy commissioner of Housing Preservation and Development (HPD); Martha E. Stark, special deputy to the Commissioner of Finance; Steven Ostrega, assistant commissioner of the Department of Environmental Protection; John W. Bowden, executive director of the Environmental Control commissioner of Enforcement of the Department of Sanitation.

Both DHCR and HPD are attempting to make changes to expedite cases handled by their offices.

At DHCR, Commissioner Aponte is reviewing the idea of arbitration between owners and tenants, coming down hard on ex parte communication and the lack of neutrality by hearing officers, and expediting approvals for PARS (Petition For Administrative Review) for those with MCI and J-51's already approved. The agency is also considering automatic postponements of an additional 28 working days to provide information if you write in to code enforcement and request it.

Deputy Commissioner Davis has focused on the extensive problems with the HPD's Emergency Repair situation. He said inspection notices for non-hazardous violations are now getting out to owners within 30 days and he is mounting a major effort toward owner registration with the help of the RSA.

Emergency repairs is an area that is receiving considerable attention because of the number of owner complaints regarding the handling of work for their buildings. Because tenants without heat were not notifying owners first, heat complaint staffers now tell tenants to call the owner. Later, they call back tenants to see if they have heat before sending repair crews. "In most instances," Davis said, "when I find an owner, they will make the repair."

Davis said as of three weeks ago, he instructed the workers who call owners about the need for an emergency repair to leave a message on the owners' answering machines -- something, he said somewhat incredulously, which was never done before. Owners will have "about 12 hours" after that, he said to call back and have a repair crew recalled by HPD. His staff has also been given the ability to call outside of the 212 and 718 exchanges, another tool that was unavailable in the past to reach suburban owners.

The repair crews have been ordered to call tenants at least twice to make an appointment, and can no longer just show up and get paid. If the contractor cannot reach the tenant, they must return the file to HPD which then sends a letter to the tenant asking if the problem still exists. If there is no response, HPD cancels the complaint. Davis said service charges have dropped 60 percent to 70 percent since this system was put in place in May.

HPD is also preparing to bring on line this year an Emergency Repair computer system called "ERIC," which will identify the contractor, the service charges and other information to help owners to understand the charges. The system will be operated by the former ERP recoupment staff who will now be known as the "customer service" unit. They are also being moved from Lafayette Street to 125 Street --" where the files are -- in order to give owners more information when they call about the bills for emergency repairs.

"The bills you not cause one to be comfortable about government," Davis said. "It forces you to to come back to the system to ask another question."

The ERIC system will computerize everything that is done after the complaint is called in, he said.

Davis called these all "temporary measures" until an even better computer system, called "Premises," can be put on line in the next four years, which owners deemed "too long," particularly in light of modern computing methods.]

Davis said a decision is yet to be made on whether Premises will target tenants, a statement which drew huge applause from the gathered owners. Owners would like to be able to identify problem tenants, who constantly call HPD and report non-existant violations; and also identify tenant-caused violations, such as double-cylinder locks, the blocking of fire escapes, etc. Davis said tenant caused violations are not included when litigation is brought against owners.

With over 3.2 million violations in the computer, Davis said, the agency is also reviewing the classification of violations. They are "targeting" their limited resources to get "the most bang for our buck," and have selected those buildings with many violations for comprehensive litigation. Davis said letters to owners began going out two weeks ago, and state that the agency is aware that the number of violations do not reflect the true conditions of the building, and that owners can ask for a dismissal on violations which do not exist or were never certified.

Owners may also get rid of violations by paying a $135 fee for an inspector to come out to the building. Davis gives a "money back guarantee" that the inspector will come out and issue a written report within 45 days. He said inspectors have handled over 2,000 requests since July and he has not yet had to refund any money.

DHCR Changes

Noting New York is the only state with four separate laws governing rental regulations, Aponte said he is working with his staff to put together one comprehensive law instead. RSA is concerned because the last time this was attempted, "they took all the negative aspects from the four systems," said Martin Heistein, RSA general counsel after the meeting.

Other changes that are being made by DHCR include the elimination of certain cases from PAR review which will now go right to court without the intervention of DHCR. At this time, the PAR stage can take three to five years, Aponte said. This will "cut down on the bites of the apple," he added, since those unhappy with decisions will not be able to keep going back for more and more administrative reviews of the same problem. A filing fee also might be imposed for both owners and tenants for PAR as one idea to reduce case load and help with administrative costs.

Aponte is also focusing efforts on owner registrations since the fee collection is lagging by some 10,000 buildings. Rents must be registered with DHCR every year, and every three years with HPD. Governor Mario Cuomo's budget also contains a fee increase for the registration, now $10, to $15 which Aponte said, will be "shared with the tenants" in some fashion. A spokesman from the Governor's office said as proposed in the budget the fee would be split 50/50 and the tenant's portion could be taken from the interest on the security deposit.

The Governor signed a bill last year which changed the amortization of MCI from five to seven years and which decreases recoupment from 1/60 to 1/84 of the total per month. Aponte said owners tell him "tenants are begging for new windows but at 1/84 I'm not running to do it." This is now in the code, Aponte said, and nothing he can do about it. Hearings, however, will be held soon on the changing of individual apartment improvement increases from 1/40 to 1/60. The RSA will strenously fight this change in code, said Heistein.

Aponte said he would also be speaking with his staff about ex parte communication with regard to a pending case. A request for information to the hearing officer would be appropriate, he said, but not the disussion of aspects of the case.

Department of Finance Commissioner Carol O'Cleireacain, who was accompanying Mayor David N. Dinkins to a conference of Mayors in Washington, D.C., was represented at the seminar by Martha Stark. Stark reminded the owners that they cannot simply "Xerox" their Finance Department bill from last year and expect to pay the same thing. In some cases, the transition assessment is still rising and although below the actual assessment, she said, will cause a larger tax bite than last year.

Additionally, Stark said, if the tax rates, set by the City Council in June, go up, then bills will also go up. The tax freeze, she noted, is a freeze on the average tax rate for the city -- which is 10.59 percent -- and said a class's tax rate could go up as much as 60 cents, although she said she did not believe the change would be that extensive.

"Become vocal in the tax rate process," Stark advised owners, "and hold the City Council accountable."

She said the Council also sets interest rates on unpaid taxes--now hovering at 18 percent and 19 percent--and suggested the owners encourage the Council to lower those as well.

She also pointed to the burden carried by the residential apartment building owners versus the co-ops and condominiums versus the single-family homes which are assessed at only 8 percent of market value. Stark said Finance will be releasing a proposal addressing the issue of equity among the classes and said for political reasons it will present an opportunity for owners to join with tenants to get the proposal through. You must educate tenants that they pay property taxes," she said.

Owners should protect their legal rights by protesting their assessment to the Tax Commission by March 2, Stark said, but may also file with the Department of Finance until Feb. 13 for Class II, Feb. 28 for Class I and April 27 for Classes III and IV, for a review by the assessor.

Stark said a new on-line computer system is being considered so that owners can obtain information on their buildings without going to the borough offices.

Owners agreed with Stark that properties should be assessed by looking at comparable sales, income and replacement costs but demanded that they not be penalized for spending more money to keep a property in shape.

Sanitation Assistant Commissioner Mullings spoke about recycling problems and fielded numerous questions from the audience. In response to complaints, she said, summonses for not cleaning the sidewalk 18 inches from the curb are not given out on windy days. Mullings said the inspectors are not even sent out on those days and are also taught to distinguish new litter from older garbage which has been blowing around for a while.

The DEP'S Assistant Commissioner Ostrega discussed water metering and noted there is a moratorium on the installation of water meters until Dec. 31, 1993, for those owners who elect to have their own plumber do the work.
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Title Annotation:Division of Housing and Community Renewal, Housing Preservation and Development
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jan 29, 1992
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