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July 14, 2009 @ 11:59 am

Madness: Tenants PAC Endorsements for New York City Council

“Insanity,” Albert Einstein said, “is doing the same thing over and over again and expecting different results.”

Michael McKee, the veteran tenant advocate, is not insane. But his endorsement of Christine Quinn and a group of other would-be, three-term incumbents to the city council is madness. I haven’t followed closely the tenant positions of all of them, but I’ve had enough direct experience with Christine Quinn to understand that she is typical of many of her colleagues on the Democratic side: Sound and Fury on behalf of tenants, signifying nothing.

Tenants & Neighbors, the organization that — with one title or another — McKee has led for many years, is a membership organization that champions stronger rent regulation in New York City. It helps mobilize tenants to attend and testify at the hearings conducted each year by the city’s Rent Guidelines Board (RGB).

New York City cannot enact stricter rent regulations without Albany’s approval. The real estate lobby understood long ago that unless Albany maintained control of the issue, local politicians, who were more vulnerable to organized tenant pressure, might be forced to enact tougher rent regulations. As president of a Mitchell-Lama tenant association in 2002, I and other tenant board members had to deal with the politics of a buyout that threatened the homes of some 3000 tenants. We hoped to change the political venue of our struggle to New York City.

The typical response of others faced with the same situation was to retain lawyer-litigators who were Mitchell-Lama specialists. They knew Mitchell-Lama and they knew how to litigate so they brought lawsuits based on Mitchell-Lama laws. Invariably, unless there were peculiar circumstances, the lawsuits only delayed the inevitable. They were forced into one-sided settlements that ended in a doubling and tripling of rents.

Our strategy was to seek passage of city council legislation that would force Laurence (“Call me Larry”) Gluck to negotiate in good faith with the tenants. It was the flip side of the landlords’ determination to keep things in Albany. That’s when I met Christine Quinn and her predecessor as speaker, Gifford Miller. This is a story I will tell later.

A Meeting With Michael McKee

At the time, McKee was doggedly working through the Democratic-controlled Assembly to try to pass state legislation to get rid of the Urstadt law and enact a host of tenant measures. I was supportive, of course, but his work had little to do with the Mitchell-Lama buyout problem. We weren’t part of the rent stabilization system and our rent increases weren’t tied to RGB guidelines.1

Because McKee was a well-known tenant advocate, I wanted to enlist his support for our city council bill. I went to his office to talk things over. He was noncommittal. He told me he would follow the lead of the Mitchell-Lama Residents Coalition and the Borough President’s Mitchell-Lama Task Force. (I have written elsewhere about the fraudulent task force that borough president Virginia Fields established to burnish her tenant credentials while financing her career with real estate money.)

McKee told me that Silver had included Mitchell-Lama in the Assembly’s rent-stabilization renewal bill, and he suggested that I bring Independence Plaza tenants up to Albany for a Tenant Day of Action to help get Silver’s bill passed.2 It was tough enough to get tenants to turn out to a City Hall demonstration, much less bring them to Albany for what I knew would be a futile mission.

“I don’t know much about it,” I said, “but I’m sure the Mitchell-Lama provision will fall off the table as soon as Silver and Bruno (the then Republican senate majority leader and present felony corruption defendant) get into a room and close the door. Bruno is never going to let it happen and Silver doesn’t care. If anything is going to be done for Mitchell-Lama, it’s got to happen in the city.”

McKee disagreed. He had been a tenant activist for many years. In fact, he had been a vice-chairman of Met Council when in 1971, Nelson Rockefeller pushed through a restriction on the city’s authority to impose stricter rent regulations than those authorized by Albany — the Urstadt law.

I knew McKee would have no more success in Albany than he and other tenant advocates had had for the past thirty years, which, except for the unusual circumstances of Governor Malcolm Wilson’s failed reelection campaign strategy in which he sought to woo New York City tenants by passing a new rent stabilization law, was none. That story should be told here as it provides a historical and political context for some of what’s going on today, not only with respect to tenants, but also the recent Republican coup fiasco — much of it real-estate related.

Republicans Pass Rent Stabilization in 1973

The Wilson story is a true man-bites-dog tale.

In 1973, Nelson Rockefeller resigned as governor to become Gerald Ford’s Vice-President. Malcolm Wilson, Rockefeller’s conservative lieutenant governor, moved up to the governor’s chair. Seeking election in his own right, he tried to win New York City tenant votes by pushing through the Emergency Tenant Protection Act of 1974 (ETPA). The law allowed the rents of decontrolled apartments to rise to market levels when they were vacated, but then placed them under the rent stabilization system, giving tenants the right to renew their leases at regulated rents. 400,000 apartments that had been decontrolled since 1971 went into rent-stabilization.

Wilson was badly defeated in New York City anyway. He lost the election to Hugh Carey. Apparently, New York City tenants hadn’t appreciated what he had done for them. That history hasn’t been forgotten in Albany. Republicans would never again make the mistake of competing for New York City tenant votes by damaging the interests of the real estate lobby, the hand that feeds them, and which, aside from Michael Bloomberg, is their major contributor.

The party may have permanently lost its Assembly majority as a result. Rockefeller, who, like Bloomberg, had been financing the Republican Party, had his state party chairman, Dick Rosenbaum, tell the Republican legislative leaders that the $150,000 contribution that the governor traditionally gave to finance each chamber’s legislative campaigns would go to Malcolm Wilson. Warren Anderson, the then Senate Majority Leader, rounded up a group of Senate Republicans to personally guarantee bank loans to replace the Rockefeller money. Perry Duryea, the Assembly Speaker, declined to do so. The Republican Senators retained their majority and the Assembly Republicans lost theirs. Many regard the decisions of the two legislative leaders as the reason for the legislative configuration that exists today.

Following that election, the Senate Republicans made it their first priority to retire their bank loans. They hosted a large fundraiser, which took in hundreds of thousands of dollars more than they had anticipated, much of it from the real estate lobby. This was in an era when the average Senate campaign cost about $40,000.

Fast Forward to 1997

The Albany rent stabilization battles have always been great political theater. Before 2002, when McKee and I met, Albany had last renewed the rent stabilization law in 1997. George Pataki was thinking about his re-election as governor. Joe Bruno had threatened to let the law expire, which would mean immediate, dramatic rent increases. Landlords estimated that ending rent regulations would mean annual rent increases of at least $1.2 billion. They had a lot at stake. So did Pataki. So did the tenants. The City’s Rent Guideline Board reported that the percentage of tenants spending 70 percent or more of their household income on rent had risen by 23 percent in the previous year. One-third of New York City tenants were already spending half their annual incomes on rent.

As the final days of the 1997 legislative session approached, Bruno was still vowing to end rent regulation. If he made good on his threat, the Democrats would have a campaign issue that might defeat Pataki. Bruno didn’t care so much about that prospect – he would become the biggest political cheese in the state party – but a weak New York City showing might even bring down some city-based Senate Republicans. Moreover, Nassau County, a Republican stronghold where Democrats had made some inroads, also had a significant number of rent-stabilized developments.

Bruno’s highest priority was holding onto his Senate majority, Pataki’s priority was of course his own reelection. As always, politics trumped ideology: Bruno folded.3 The Republicans allowed an extension of rent stabilization until 2003, a non-election year.4 That’s where things stood when I met McKee.

Tenants would be lucky to come away with a continuation of rent stabilization. Democratic assemblymen had been introducing and passing pro-Mitchell-Lama tenant legislation for as long as I could remember. But the legislation was never signed into law. These were the infamous one-house bills that housing chair Vito Lopez would introduce with great fanfare every year and the assembly would pass, secure in the knowledge that the bills would die in the Republican-controlled senate. The lobbyists made money, the legislators were paid handsomely by the real estate industry, and the tenants were screwed. Albany was a non-starter.

McKee knew all the players. He thought of himself as one. He knew more about rent regulations than most people, but he was wrong about the politics. He didn’t appreciate my telling him so.

We argued a bit. He didn’t seem to know how the Mitchell-Lama provision had gotten into Silver’s rent stabilization bill. He hadn’t asked for it. I hadn’t heard any Mitchell-Lama tenants demand it. Nor were there any important politicians committed to it. But Albany was the focal point of his strategy and he wouldn’t budge.

The Albany crowd didn’t want another political battle over the issue. Why awaken New York City renters to the realization that politicians, not landlords, control their housing costs? If enough apartments were deregulated through vacancy or luxury decontrol, concessions that Bruno had won in 1997, the rent-stabilization constituency would eventually erode to where it would be a less worrisome political force. Attrition rather than confrontation was a better political strategy. The real estate lobby would still make their campaign contributions.

I knew the Republicans would never go along with anything more than a simple rent-stabilization extension bill, much less would they ever agree to adding thousands of Mitchell-Lama and other subsidized developments to the rent stabilization system. If you don’t know whose signature is on your paycheck, you are truly clueless. Politicians always know.

The meeting with McKee ended badly. A prickly fellow with a cause that he had been fighting for more than thirty years, rent regulations pretty much defined who he was; he didn’t want any disagreements from me. Affordable housing wasn’t a cause that I wanted to fight the rest of my days; we needed a solution now.

Whether housing committee chairman, Vito Lopez was a tenant advocate – he wasn’t – or wanted to do something meaningful for Mitchell-Lama tenants – he didn’t — wasn’t important. The issue rested entirely with Sheldon Silver, Joe Bruno and George Pataki, which is why we never sought a meeting with Lopez or any other housing committee member. Unless Silver intended to put Mitchell-Lama on the table as a serious item, and Bruno could be persuaded to go along with whatever negotiating cards Silver held (Bruno’s son was a lobbyist), tenants would come away with nothing, which is what happened.

The Republicans passed a rent stabilization extension bill for eight years without the Mitchell-Lama provision and went home. Reportedly, Bruno’s was a take-it-or-leave-it move. If Silver didn’t pass the exact same measure in the Assembly, no law would be enacted, rent stabilization would automatically expire and hundreds of thousands of tenants would see their rents skyrocket. McKee later railed against the outcome, thinking that Bruno had outmaneuvered Silver. It was more likely that Bruno and Silver had made a deal to take this vexatious issue off the Albany political calendar for the foreseeable future. Neither of them wanted more tenants coming to Albany to demand strengthened rent regulations.

The following year, McKee was leading demonstrations in front of Silver’s office. He was calling on Albany to grant New York City home rule on the issue, a replay of a battle that had been fought and lost years earlier.

Today, he endorses Christine Quinn, a complete and utter fraud when it comes to tenant protection and many other issues on which she professes strong support. I’ll tell that story tomorrow.

– Neil Fabricant

[1]However, rent-stabilization laws do apply to Mitchell-Lama tenants when their developments exit the program provided they were occupied before 1974. Each year, New York City’s Rent Guidelines Board, whose nine members are appointed by the mayor, establishes the ceiling on rent increases in the approximately one million apartments subject to rent control and rent stabilization. Before it issues its rulings, RGB studies landlords’ financial submissions, and other relevant materials and holds hearings. Hundreds of tenants turn out to testify and shake their fists at the board members, demanding there be no rent increases that year. They argue that landlords cook the books, and that many of the mayoral appointees to the RGB are flacks for the real estate crowd. The landlords, led by the misleadingly named Rent Stabilization Association, organize struggling owners of small residential buildings to testify to their Horatio Alger beginnings and Sisyphean struggles to survive. Often, these small owners are black or Hispanic. Landlords like Laurence Gluck don’t attend these hearings. Periodically, the industry offers up studies that purport to prove that if the rent regulations are eliminated altogether, the housing supply will increase and rents will come down. But aside from the RGB process itself; the state controls the rent-stabilization laws.
[2]Unless the state legislature renewed it, rent stabilization would expire that year.
[3]Bruno won concessions that weakened the rent stabilization system. Renters who earned more than $175,000 for two consecutive years and who lived in apartments renting for more than $2,000 per month would be destabilized, as would those who moved into vacant apartments renting for more than $2,000 per month.
[4]According to the New York Times, shortly after the law was passed in June, tenants groups discovered an ambiguously written passage that allowed landlords to collect much larger rent increases on vacant apartments than supposedly had been called for in the original deal between Pataki, Bruno and Silver. Silver’s staff had drafted the passage. He hadn’t allowed tenant groups to review the draft language. The bill was approved before they noticed the ambiguous passage. Pataki and Bruno would not agree to a redraft. Thousands of tenants paid higher rents than were called for in the original deal as it had been announced. Because of the secrecy in which the deal had been struck it was impossible to know whether it was truly a mistake or part of the deal.

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