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Does the mayor know the score on rent laws?

I can't help but wonder if Mayor David Dinkins has taken a hard look recently at the state of the city's affordable housing market.

Does he know why some 600 residential buildings -- comprising 6,200 apartments -- were taken over by the city for non-payment of taxes and why there has been a rise in the proportion of properties not redeemed by the owners? Does he wonder (as many of us do) if these developments aren't forerunners of the type of rental housing events the city experienced in prior decades -- 10 to 20 years ago - when the city's in rem takings soared to 10,000-30,000 units?

Does the Mayor have a response to a recent report that increases in operating costs are not being covered by rent increases -- and, perhaps, can't be covered in low-income multi-family properties without substantially increasing the homeless population?

Proposals to extend rent regulations are moving through the state legislature, and controls in one form or another undoubtedly will remain on the books. The form that the extension takes and the question of whether it will contain some type of decontrol is of vital importance to the city and not only to owners, many of whom were shocked by the recent news about the city recently taking over 10s of thousands of apartment for non-payment of taxes.

The city's owner organizations are working to have some type of decontrol included in the rent-law extension bills. The Rent Stabilization Association, the umbrella lobbying group for landlords, is backing a proposal to eliminate rent-law protection for those earning over $100,000 a year. It should be adopted.

Of course, for many owners any changes in the rent laws will come too late. Earlier this year, the Department of Housing Preservation and Development reported that an average of 6,200 apartments a year had been taken over by the city for non payment of taxes during the past three years. Ordinarily, about two-thirds of these would be redeemed by their owners, but recently the proportion of unredeemed in rem properties increased by over 40 percent.

Does this mean that the pace of in rem property rehabilitation sponsored by the city is being overwhelmed by the rate of unredeemed in rem property takeovers?

The city (read taxpayers) has spent more than $5 billion in the past five years to upgrade its in rem housing stock. If I was Mayor I would wonder if the city's in rem rehabilitation efforts aren't turning into a round-robin program.

Most of the above depressing housing scenario has to be laid at the doorstep of the rent law structure. It goes without saying -- or it should -- that the rent laws have been a disaster for the city and have led to a type of housing politics that is not healthy for the development of affordable housing here.

How many entrepreneurs are there who will invest in a business that must face a heavy-handed bureaucracy created by the rent regulations? How many will put up with delays in needed cost-of-living rent increases and higher rents for renovation work, and with loss of control over their properties? All of these are a legacy of the rent laws and all have discouraged creation of affordable housing stock needed by the city.

Does the Mayor wonder about the distortions created by the rent laws in the multi-family business? In addition to the shortage of decent affordable multifamily housing and the rising pace of apartment building disinvestment, would ask the Mayor to consider that:

* The rent laws benefit the wealthy instead of the poor, many of whom now are paying market rents

* Total city revenues from aggregate property taxes are low because many properties are earning below-market rents and therefore at below-market levels and

* Owners are unable to look to the courts for relief from destructive and/or non-rent-paying tenants, because, as a result of the dire affordable housing situation, city courts too often see themselves as institutions of last resort for tenants.

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:New York City Mayor David N. Dinkins
Author:Klein, Ruben
Publication:Real Estate Weekly
Article Type:Column
Date:May 19, 1993
Previous Article:Government engineer joins private-sector.
Next Article:Report finds 3.6% jump in home building costs.

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