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Permanent rent laws? Enough is enough.

Enough is enough. After a half century of destructive rent regulations, it appears that the best the New York State Assembly can do is to vote to make the rent laws permanent. This is a thoroughly irrational response. It fails to recognize that the restrictions placed on owners by rent laws limit their ability to provide essential services and, therefore, are unfair to the millions of tenants who pay their rent and are entitled to full service.

We have to count ourselves fortunate -- and we do -- that the State Senate stands between us and the irresponsible proposed rent law actions of the Assembly. While it's true that the State Senate's own rent law bills would extend the rent regulations for another two years, at least they also propose to begin to decontrol apartments renting for upwards of $750 a month.

These thoughts and those that follow passed through my mind after I participated in a. recent meeting of the Rent Stabilization Association. We listened to legislative reports, and we listened to the comments and pleas of the owners who were present.

It's plain that on the issue of rent law extension, the owners of affordable rental housing are in a difficult position. They have no choice but to support the State Senate's rent law bills even though many know in their hearts and can see in their ledgers that they really can't continue to live with controls.

Owners of small apartment properties, in particular, are suffering. Hidden taxes, such as excessive fines and other charges, and the bureaucratic paperwork involved in operating affordable rental apartments are out of hand.

And what small property owner can afford to make repairs when the Department of Housing and Community Renewal is behind two and three years in issuing major capital improvement increases?

What small-property owner can prevent breakdowns and keep his or her building modern by installing new equipment when under the rent laws the period for amortizing improvement costs has been extended to at least six years? This is too long and means that owners probably cannot even recoup their total out-of-pocket expenses. Moreover, the owners are not allowed to make a profit on these investments or on their work in planning, financing and managing the improvements. So, why should they do it?

Since World War II when "emergency" rent laws were adopted, thousands of affordable rental apartments have been lost to rent regulatory excesses backed by a judicial climate that makes villains of those who provide privately-owned affordable rental housing. And still, despite tremendous losses of basic affordable shelter, certain legislators persist in thinking the rent laws are beneficial and deserve now to be written in stone.

In this, they run contrary to the free world.

Great Britain has relieved itself of the burden of operating Council Housing. Most of Europe and Russia have eliminated or are eliminating housing controls and turning the job over to entrepreneurs and the free market. But New York foolishly continues to look to rent regulations to create and provide adequate rental housing. Increasingly, after a half century of rent regulations, New York owners find it financially impossible to continue operating their properties. Some, unable to pay taxes, allow their buildings to be acquired by the city via the in rem process. But the city then has to spend hundreds of millions to repair them, money that comes out of capital budget funds needed to maintain and replace infrastructure. We claim to be a world-class city, but how can we compete with the capitals of the world which are outspending us to rebuild their infrastructure and who are rejecting the stultifying grasp of state housing and rent laws? These nations will have modern systems and housing. Will we? Without funds to make repairs, our affordable housing ages and deteriorates. Bridges, roadways, subways crumble.

Bear in mind, too, that New York City's affordable rental housing is being abused by doubled and tripled tenancy. This accelerates its obsolescence, and without funds to modernize "their building's systems many owners can only watch as the buildings rapidly age.

We must ask: Doesn't the city care? Why isn't it concerned about a housing stock without which it can not possibly survive?

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 State Assembly votes to make rent laws permanent
Author:Klein, Ruben
Publication:Real Estate Weekly
Date:Mar 24, 1993
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