On December 3rd 1992 the rent stabilization Association organized a
conference to explore the issues which threaten New York's economic base and
its rental housing and to develop a blueprint for survival conference
participants included the heads of every city and state agency which affects
rental housing state and city elected leaders and representatives of the
housing industry and related industries Mayor David Dinkins delivered the
keynote address I'm pleased to have this opportunity to speak with so many of our
cities rental property owners as the rent stabilization Association kicks off
this very important conference and as I see as I just glanced out into the
audience I can't see too far because I'm nearsighted but I do see senator it's
nice to be with you how are you but what a distinguished
audience the fact is in the city is complex and diverse as ours you play an
accrual role not only by contributing to our economic base but also by providing
the housing opportunities that our families and individuals need and demand
as this audience certainly knows New York is unique among major cities in the
high proportion of residents that live in rental housing a full 70 percent of
our city's housing units are rent or occupied apartments more than half of
which are rent controlled rent regulated or rent stabilized and unlike some other
cities New York's reliance on rental housing spans all economic levels and
that's why this conference is so very very important New York's rental housing
is a crucial part of our city's infrastructure and we must do all we can
to protect them to preserve it and pleased that so many members of my
administration are taking part in today's panel's discussion including
deputy mayor Barbara Fife who was here the chair of the city's rent guidelines
board our commissioners of finance housing preservation development
environmental protection and sanitation each is here they will be talking about
a number of issues which are critical of critical concern to this association and
our city such as water rates rent regulation
recycling and financing who are the owners of New York's
regulated rental buildings only 15% of them are corporations or investors who
own over 60 apartments the rest are small business men and women mom-and-pop
landlords who collectively owned nearly half of what remains of New York City's
private rental housing stock 60% owned less than 20 apartments over 50% are
foreign-born immigrants 87% manage their own buildings they have made many
sacrifices to own and hold on to their buildings they live in fear of the
unknown the uncontrollable cost of metered water use the unforeseen cost of
lead paint abatement and ever-increasing taxes and fees I have an affection for
the building because I lived there since I was 12 years old and yeah that's 30
years ago I'm 42 years old now I mean I'm still going up the same steps that I
did when I was 12 and I have a feeling for the building I mean I know I know
the minute when something is wrong we know and your mother my mother her big
problem is that she loves the building too much I mean she's up 3 o'clock in
the morning listening to see if the boilers shut off or if it came on at
5:30 I mean the woman gets about maybe 3 or 4 hours sleep a night because the
that building is on her brain it's on her mind it has been this way for 20
years I don't think you love a final landlord in the history of New York City
that cares anymore about the building that she cared about that building so
I've been telling her lately ma I think it's about that time
you know time to maybe just back off back off of it you see because she's
there 24 hours a day when I'm not there 24 hours a day she's there all the time
if no disaster happens to you in the summer and you can get your real estate
taxes and water and sewage bills paid and everything paid then you can
continue to make it but I mean if things get any more frustrating if they keep
any more garbage on us than they have been heaping I can't see anybody make
you at least get not guys in my bracket I can see a guy with the big high-rise
maybe making it but not me my mom for many years without my knowledge
spent every last dime that my father had left to her in the world
at that time we were having that oil so-called oil crisis and she used every
dime that he left I mean she never came to me once and said well hey son you
know I'm not doing so good I didn't find out and tell about maybe like nineteen
eighty two three or so that she was really catching it with that building
and it had gotten to this to the point where she was about to lose it then she
stepped in and said we're having trouble I had to go into my account and take out
the money and I paid off we still owed the city money on the only original
mortgage I paid all that off for her and I paid all her back taxes and then she
took it on from there but she was using her social security
money at the point where my dad's money had run out which had been about maybe
ten years then she started on her social security check but she cared if those
people in that building had heating hot water many of them they're still in
there or her friends and she was going to sacrifice so they wouldn't have to go
without none of these agencies from Sanitation
from pest control from fire department from the fees that are charged for what
was the latest one oh that latest tax which was the police
tax what police and then our fuel storage tax a permit well I suppose
that's you know what else can we think of it's just it is purely none of it is
to support housing none of it is to support individuals who are in this
endeavor none of it or to support people who are
working in this field I had a choice of having two of my small buildings go in
rem or canceling the health insurance for these families that work for me and
have young children well what the hell kind of choice is that we have an
enormous bureaucracy in pest control let's get them in here and control the
pests don't just find me you know I don't think they've seen any poison in
years they've just seen checks this is what the men who are cleaning in the
buildings or tidying up the garbage this is what they're reaching into these are
all over our hallways the men know how to work with this we know how to be
careful about the bullets and doesn't mean that we're any less abusive to the
drug dealers but these these we can you're dealing with human beings in this
my biggest fear is that I'm not dealing with human beings when I'm dealing with
the city of New York once I became involved with buildings very shortly I
realized only in a building in New York it's not just taking care of building
it's all the paperwork the ACR the HPD they load us up with all the paperwork
and ambiguous and duplicating rules and regulations for a person who like me I
have a college education I have an education a degree in architecture and I
know how to add and subtract but I cannot deal with the HDR's paperwork I
cannot deal with HPD's paperwork it's just totally impossible because owning a
building managing a building is no longer just to fix this fix that you
have to be in a lawyer an accountant a legal expert to read their laws and
rules and regulations most of the time I find that I can't I can't understand I
don't know how the average small property owner can begin to comply with
the state and city regulations as you can see this is just a small portion of
the hundreds of people that we've had to hire to deal with the governmental
bureaucracy that the real-estate industry has been faced with the city in
the state have enacted regulations and geometrical portions over the last
number of years and I don't know how the small owner can comply we barely can do
it with our expertise dealing with dhcr is an impossible bureaucracy we take
four steps back before we can take one step forward we've some of the finest
people in the industry here and still can barely deal with the administrative
bureaucracy
owners must deal with more than two-dozen city and state agencies which
takes up a major portion of the small owners life
New York's rent regulations are the harshest in the free world and
effectively deprive owners of control of their buildings they cannot set the
amount of the rent they cannot determine the amount of the increase they cannot
make changes or improvements to the building without permission from the
tenants and state and city agencies they cannot take the apartments off the
market when they are ready to retire they cannot evict a tenant for
non-payment of rent or criminal activities without permission from the
housing courts but housing courts are protective of tenants and have
frequently allowed tenants to stay on without paying rent for months at a time
the basic agenda here in housing court is to prevent eviction and many small
property owners find that shocking they come here expecting justice expecting
that they will be able to collect their back rent in a non-payment case
expecting that they will be able to evict the problem nuisance tenant who is
harassing other tenants in their building in a holdover case and
expecting that they will be able to get a unit in their building for their own
family's personal use and they're constantly thwarted when they get here
they're disillusioned they are very upset tenants come down here and they're
taught by judges who give sermons from the bench that don't worry about not
paying your rent we're not going to throw you into the street now when five
to three hundred tenants hear this what are they expected to do but not to pay
rent a judge is telling them don't worry we're not gonna throw you out I have
been trying to get a trial from the housing court for
the last three years and the legal aid mr. senator has been all the time
dismissing our case by technicalities when you look in the courthouse is all
people are down there I was down there a week ago a tenant owes an all-lady nine
thousand dollars how is she going to make it she can't make it if the judge
is the court don't treat landlord better New York
will fall because person landlords who are housing these poor people just feel
like running and leave their bail in because you have the large taxes to pay
the insurance and everything sometimes I if I don't work I don't pay my rent my
mortgage with a thousand one hundred and seventy one dollars a month on this box
it's paperwork that I had to do for three different cases of illegal tenants
in the building and it costs me years of my life filling out the forms going to
court and so much money just to prove that these people were doing something
illegally if I cannot collect my rent I cannot pay my bills that's the bottom
line I mean it's like we're the only business in the world that has to
continue to provide service even though someone's not paying us I mean that's
crazy if you got food clothing and shelter can you imagine the the fool or
the claw of a guy going through we're going through I mean if I came into a
guy's for restaurant and sat down and ate a big turkey dinner every day and
and he has to send for the cops to throw me out cuz I'm not paying for the food
and some judge telling me you still got to give this guy a big turkey dinner
every day where would I be if a guy if I ordered a suit from a guy and the guy
makes me a tailor-made suit and I don't pay him they would say hey well you're a
rotten guy for not paying this guy for this food for the guys living in my
apartment I have to still send him hot water
I gotta still send him steam I gotta still do this for them that firm he's
got my four walls all my appliance he's using everything doesn't pay me has a
judge stand behind him then he slips out into the middle of the night after I've
spent who knows how many dollars in legal fees I can't see anyone making it
bind carpenter window washer janitor painter
garbage collector lawyer accountant social worker the typical New York City
landlord is all these things and more but increasingly there is the sense that
time and the system are against them oh we can rehabilitate one of these
apartments for five to six maybe eight thousand max whereas a city old house
someone in a shelter for thirty forty thousand a year and it just doesn't make
any sense okay we took over the building about eleven years ago for my father who
couldn't deal with the bureaucracy it just just wasn't working taxes were
going up what it was going up and rental income just wasn't coming up it's just a
lot of work it's been a fight ever since the city does everything it can to not
help small landlords try to get a loan out of a bank when someone's paying $40
a month rent and it just doesn't work very hard to rehabilitate very hot why
do I go on I've like everyone else I have a dream one of these days it's
gonna work one of these days the city will realize that you're losing a lot
more property than they're gaining they have to change some of the some of the
laws biggest fear is not having the money when the tax time rolls around and
have the city come and get it from me I'm always on edge I don't sleep a tax
time I don't sleep at all the government they make the rules
they said the payments something that a LAN LAN should get and if they do the
same thing that they do to us if they do that the restaurants and other
businesses New York City would be dead because you would have no restaurant you
have no other businesses allah-allah job is 24 hours a day my tenant called me
all the time anything I have to be around and you know it's just not fair
it's just unfair and we're talking about free enterprise we're talking about you
know having your own business no everything has increased
and my rent has not caught up with it and my face this that after taking good
hard morning and putting into this business one day I will have to walk
away from the building and then it would be it would be just chaos you know
that's what it is because then you cannot be taking money
from other places all the time all the time it's going to dry up on when it's
dry up and I can't pay the taxes and I can't be pity water and I can't pay the
insurance I'm out of business I have invested my hard-earned money and
you should be fair I should I should get a return of my money just as all the big
companies are getting a return any money that's all I ask for I am I have nothing
against tenants they are part of my business and we told them I don't have
any business but at the same time if I'm giving them a service and I'm not giving
them a good service I should get a fair return for my money thousands of New
Yorkers are in danger of being forced out of their homes because their
landlords can't pay the bills channel twos Mike Taibbi is in Manhattan now
with a story of the latest victims of the recession Mike
Michele we're talking about potential victims the building behind me at tenth
Avenue in 42nd Street is a building in trouble one of many thousands in this
city many windows broken and boarded up and those few tenants still living in
this building wondering how long they'll live there the last time that thousands
of buildings like this were dumped on the city was in the recession of 1968
1972 in that area one year more than 10,000 such buildings becoming the
city's problem can it happen again on that scale in the wake of our current
lingering recession the new study out today says it can he was oh yeah he was
out a Carmelo Gonzales says he hasn't paid rent in two years on his small
apartment a tenth Avenue at 42nd Street for one thing nobody fixes anything the
building is a fire trap and often lacks water or electricity or both for another
the building's all but abandoned after years of decay only nine of the 52
apartments are occupied finally even the building super couldn't tell us who the
rent would be paid to the building does - I know the guy changed so much time a
poetry different time it changed management what is known is that this is
a building whose owners seem to be in the process of giving up it's happening
in historically poorer neighborhoods in Central Harlem bed-stuy Crown Heights
and Bushwick Brooklyn and Mott Haven in the Bronx and it's happening here in
Clinton amid the forest of luxury towers spawned by eighties investment question
is it happening at a greater rate now than in the recent past well a nonprofit
agency called the community service Society of New York has just been a half
million dollars in grant money to correct some numbers and find out just
how much trouble how many rental properties in New York
City are in right now and the story told by those numbers is a grim one all told
some 7500 multiple dwelling buildings with 140,000 apartments are threatened
with abandonment because the owners owe back taxes or are already in foreclosure
proceedings that's one in six buildings in the five boroughs in 92 when a ratio
was one in 16 as recently as 1988 what's especially ominous is that in 1988 nine
out of every ten property owners facing foreclosure would find a way to pay
their back taxes and hold on to their buildings
today's story right now only one out of four properties of being redeemed by
owners who can pay back taxes to the city and recover properties the city
would otherwise foreclose well this building behind me known as 500 10th
Avenue was not an immediate danger of foreclosure the owners who include first
New York Bank have cut a deal with the city to pay the taxes that are owed over
120 thousand worth in installments however as you just heard from mr. Bach
many other owners of similar buildings have not been making those payments and
that threatens or promises big trouble for the city of New York in Manhattan
MyType channel 2 news reporting live back to this
my city's tax basis continues to dry up yes it does and I don't know what
happens to the people who live in these buildings I just talked to a bunch of
them today and they have no idea they can't even get anybody on the phone to
ask what's going to happen before I asked Peter Valon to come up I want to
lay out what I think of the workings of a blueprint that we can all walk out of
here today and begin developing number one I think all of us can agree that the
survival of rental housing is essential to the economic well-being of the city
of New York anybody disagree with that - that rental housing is in trouble
and without action now it may be too late and that next legislative session
in Albany is key anybody disagree with that three that we need to contain
building operating costs the point that Felice machete made the tax freeze is
important and we must keep it assessments in my estimation must be
frozen as well I know that's controversial but something has to be
done when values are going down market values with assessed values going up
water and sewer we're going to continue to fight the metering but absent court
intervention we need caps and/or transitional increases where owners know
what's going to happen to them next year let paint I think we already talked
about this and we've agreed on it that we but we can't do anything that or any
effort legislatively to require abatement or removal of all that paint
will bankrupt this city and will bankrupt this industry and it can't be
done we have to do management of this of this issue and we have to deal with the
peeling paint not intact paint recycling I think we all agree that we need to
educate the generators of the garbage we need to get to the people who are
creating this garbage and make sure that they recycle it and separate it as far
as housing court legislatively we need stronger laws to deal with a deposit of
rent in court and we've got to work on the election of judges or the selection
judges I think overall I think it's been clear today that there's not anybody up
here who thinks rent regulation is working well and we need to revamp this
system streamline it and take a real close look at combining both of these
systems not by combining the worst of both but by understanding that we need
to identify the people that we're trying to protect
and not protect everybody who doesn't need that protection we need to end
duplication of regulation and I think we've got a commitment at least to start
talking about that and bottom line is that we really need to convince the
members of the rent guidelines board that rent increases must reflect
economic reality and that's not an easy one for anybody because nobody wants to
raise their rents on people who live in your buildings but if government's
forcing you to pay more then somebody else is gonna have to pay that as well
incentives to upgrade property we've got to take another look at MC eyes and the
j-51 the council has before them the j-51 bill we really have to take a look
at giving back those rent increases that were subtracted off if you choose to
take both MC eyes and j-51 I think we can all agree that more incentives to
upgrade housing are essential
thank you very much Republican leader standing to mind sitting to my side
Freddie I see any audience we have Ken Fisher and Sam Horowitz quite a few
council members around Archy speaking laugh let me tell you
what you're doing today makes a real difference it really does just the
number of people that you have here indicates and the number of city
officials and commissioners and I understand Mayor was here earlier this
morning this is what changes government we know the importance of preserving the
city's rental housing market and fostering a better climate for its
growth we also know the huge investment you have made in this city and without
you we have no city
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