Real Estate
Fighting fraud and for your right to right rent
TENANTS continued from p. 1
“New York City has an extraordinary,
existential affordability crisis, and
on June 15, 2019, New York’s rent laws,
which cover 1 million apartments, will
offi cially expire,” Hoylman told the
crowd. “Rent regulation is the largest
source of low-cost housing for low- and
moderate-income tenants, yet a third of
New York’s 2.5 million rent-stabilized
tenants already pay more than half
their income in rent.”
Hoylman traced this problem to the
1940s, when controls on rent were enacted
to combat the post-World War
II housing crisis. In 1947, New York
State passed the Emergency Housing
Rent Control Law. This law kept rent
largely stabilized, until 1994 when the
New York City Council implemented
vacancy decontrol, allowing landlords
to slowly move apartments toward market
rate. In 1997, Albany legislators
pushed through the Rent Regulation
Reform Act, allowing regulated apartments
to be decontrolled if the rent hit
$2,000 per month, leading to the loss of
400,000 affordable units since 2005.
Stringer said the resulting roughly
62,000 people (including 24,000 children)
currently fi lling homeless shelters
was “not an accident.”
“This has been designed to create a
city for the very, very wealthy, with enclaves
for the very, very poor, and nothing
aspirational in between,” he said.
Stringer added that the demise of
Mitchell-Lama affordable housing was
the beginning of the end, leading to developers
“coming to communities you
built and saying ‘Thanks a lot. Give us
the keys and get out of New York.’
“We’ve had enough,” Stringer declared,
“and we’re not going to let them
do it anymore!”
The biggest problem empowering
unscrupulous landlords, said Carr, is
that laws meant to protect tenants are
unenforced. Those laws include J-51, a
tax benefi t landlords receive for renovating
apartment buildings. The J-51
stipulation requires that 100 percent
of these apartments must then be rentstabilized
— but they’re not, he said.
“Our organization in 2016 found
that over a thousand buildings receiving
J-51 tax benefi ts were out of compliance
with rent-stabilization laws,” Carr
said. “And the outcome is a city saturated
with fraud — tax subsidy fraud, J-51
fraud, 421a fraud — across the board.”
This fraud is easy enough to spot. Visit
the Department of Finance Web site, type
in your address, and see if your landlord
is receiving a J-51 tax benefi t. If so, all
units should be rent-stabilized; if they’re
not, it’s fraud. Housing Rights Initiative
has mounted more than 40 J-51 class-action
lawsuits. But Carr said the New York
State Senator Brad Hoylman, left, and Comptroller Scott Stringer, to
the right of him, were joined by tenant advocates at a town hall meeting
last week on rent regulation.
State Division of Housing and Community
Renewal should be doing this work,
not “a nonprofi t that has the budget of a
nickel and a piece of lint.
“We need to keep pushing enforcement
agencies to do their job, to enforce
your rights and to uproot fraud,
so they can muster the political will to
solve this,” Carr declared.
Another method landlords use to
raise rent is to make Individual Apartment
Improvements, or IAIs, on vacant
apartments, allowing a rent increase of
about 2 percent. But landlords don’t
have to submit receipts: It’s all on the
“honor system.” Landlords can claim
they spent any amount — even, as one
of them asserted, $300,000 — on improvements.
And despite being tasked
with supervising affordable housing,
D.H.C.R. freely admits on its own Web
site that it doesn’t verify the truthfulness
of the owners’ statements or the
legality of rents.
Indeed, a recent government audit
investigated 13,000 landlords and
found 40 percent illegally overcharged
tenants in rent-stabilized buildings.
“And that just completely makes
sense, because why would they follow
the law?” Carr asked. “No one is looking,
COURTESY CITY COMPTROLLER’S OFFICE
no one is forcing them to, and even
good landlords are put at a competitive
advantage when everyone around them
is cheating.”
Yet another way landlords drive rents
up is by Major Capital Improvements,
or MCIs, annual rent increases of up
to 6 percent charged for building-wide
improvements. The increase is permanent
— even after the repairs are paid
off. Many unscrupulous landlords create
shell construction companies, have
them create large invoices for “repairs,”
then submit these to D.H.C.R., which
usually approves the claims. Then badactor
landlords do low-cost improvements
and pocket the cash.
“This is a huge problem because
they have defrauded tenants, duped
the government and stolen affordable
housing from New York City,” Carr
stated. “It’s more than just bad policy,
it’s the legalization of fraud. And that’s
why it’s so important to close these
loopholes.”
There are several methods legislators
and activists can use to close the
loopholes allowing landlords to act
fraudulently without repercussions. For
starters, lawmakers can repeal vacancy
decontrol. They can close preferential
rent loopholes, which allow for future
overcharges. And they can end IAIs.
“And you didn’t even mention the
vacancy bonus — the biggest driver
of rent increases,” said Glover. That
policy allows landlords to increase rent
by 18 to 20 percent for a vacancy lease.
This has led to an increase of “eviction
by harassment,” under which landlords
repeatedly push tenants out quickly so
rent-stabilized apartments convert to
market rate.
Affordable housing also suffers due
to Airbnb, problems with enforcement
of the Senior Citizen Rent Increase
Exemption, or SCRIE, and the lack of
both transparency and enforcement
by the New York City Department of
Buildings, among other things. There
is currently $1.5 billion in uncollected
“quality of life” fi nes on landlords —
and after three years, the city gives up
on collecting.
Glover’s solution: universal rent control.
She wants to remove geographic
restrictions in the Tenant Protection
Act, implement rent-control relief, end
vacancy control, eliminate permanent
rent hikes by means of MCIs and IAIs;
eliminate the vacancy bonus; and make
preferential rents — when a landlord
charges a tenant below the maximum
allowable rent — last the duration of
the tenancy.
And forget about resolving your issues
in Housing Court, which CASA’s
Garcia called “an eviction mill” that
landlords use to push renters out. Instead,
she urged audience members to
share information with neighbors, and
push D.H.C.R. to make administrative
changes. Hoylman pointed out that the
City Council introduced a package of
18 bills meant to stop widespread landlord
fraud.
But rather than waiting for new laws
to be passed, Garcia said the average Joe
would have better luck following two
simple steps. First, check online to see if
your apartment is rent-stabilized, and if
you discover you’re being overcharged,
reach out to D.H.C.R. to resolve it.
Then, organize a tenants association.
“If you have issues,” she said, “it is
much easier to get them addressed
when there are 30 people suing the
landlord verses you by yourself. It’s so
much stronger to submit a rent reduction
when a group of 60 people are
facing the same issue. It builds a power
that is so much more than you just getting
your initial issue addressed.”
Learn more about tenants’ rights at
the 13th Annual West Side Tenants’
Conference, Sat., Dec. 8, at Fordham
University School of Law, 150 W. 62nd
St. For information or to RSVP, call
845-367-7003 or e-mail jfurlong@hccnyc.
org .
30 December 6, 2018 TVG Schneps Community News Group
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