Perhaps the best scene in the 1981 film Reds is near the beginning, when an insufferable gasbag, after harumphing to a dinner crowd for a few minutes about how bloatedly excited he is to die in the Great War, turns to Warren Beatty and thunders, “What would you say this war is about, Jack Reed?” Beatty stands up, chews a little, waits. “Profits,” he finally says. Speech over.
One could say the same thing about the looming battle in Albany over rent regulations—that it's about profits or, more accurately, just plain money. Money is what landlords say they need to make more of. Money is what tenants say they have no more to pay. And money was the weapon of choice during the first round of the 2015 rent-regulations battle—the 2014 election.
Belligerents in the rent-regulations fight spent at least a million dollars on campaign contributions during calendar year 2014, showering candidates and parties with donations ranging from a couple hundred bucks to six figures.
Neighborhood Preservation PAC, one of two political action committees associated with the pro-landlord Rent Stabilization Association, sent checks worth $373,000 during the year; RSA PAC, the group's other spending vehicle, added another $326,000. Housing New York PAC, which is linked to another property owner organization called CHIP (Community Housing Improvement Program), spent a quarter of a million. A smaller landlord-backed entity, Affordable Housing PAC, threw in another $29,550. Badly outspent was Tenants PAC, which contributed $51,350 to a baker's dozen of candidates.
Did all these players get what they paid for? The full answer won't be known until June 15, the deadline for renewal of the regulations on 990,000 rent-stabilized apartments in New York City. Legislators could let the laws lapse but it is more likely they'll be renewed and—in ways impossible to predict—strengthened, weakened or left alone.
Some evidence on the payoff from those campaign checks is already in, however, in the form of election results. Seven of the candidates supported by Tenants PAC—including Justin Wagner, Ted O'Brien, Terry Gipson and Oliver Koppell—lost their races. Adriano Espaillat, George Latimer, Marc Panepinto, Gustavo Rivera and Toby Ann Stavisky won, though the PAC's support for all but Latimer and Panepinto was very modest.
The two Rent Stabilization Association PACs also bet on a few losers, like gubernatorial runner-up Rob Astorino, failed attorney general candidate John Cahill and tough-luck Senate candidates Fernando Cabrera, Joe Dillon and Anthony Senft. But they hedged their bets in the attorney general's race, giving $20,000 to Eric Schneiderman, and in the state Senate George Amedore, Martin Dilan, Rich Funke, Jeff Klein and Michael Venditto won with significant backing from the PACs.
Sen. Jeff Klein, leader of the Independent Democratic Conference, received $15,000 from the two RSA-affiliated PACs, the most of any Democrat and second most overall. Tenant organizations have long painted Klein as a pawn of landlords. In a statement, Klein's spokeman said, "Campaign donations play no role whatsoever in shaping the senator's legislative agenda. Senator Klein kept low and middle-income seniors in their homes by expanding the SCRIE program, passed legislation that enhances penalties for tenant harassment, is proposing a major expansion of the Mitchell-Lama program and supports the continuation of strong rules and regulations of rent stabilization and rent control."
What's not debatable is that Klein will play a different role in this legislative session because the Independent Democratic Conference no longer holds the key to Republican control of the Senate.
Indeed, the two Rent Stabilization Association PACs' spent $277,000 in combined support for the Republican Party's effort to win outright control of the state Senate and it paid off handsomely, in that it dashed tenant leaders' hopes of having both houses controlled by more tenant-friendly Democrats.
The very success of the GOP senate effort means that the individual senators—whether supported by either the Tenants PAC or the landlord campaign vehicles—will likely have little impact on the outcome of the rent-regulations debate. In fact, with the Senate unlikely to even consider any tenant-friendly version of renewal, tenant advocates are focusing instead on the Assembly. Their hope is that Speaker Sheldon Silver takes an aggressive pro-tenant negotiating stance against his counterpart in the Senate, Dean Skelos. And for Silver to take a tough line, his caucus the thinking goes, his Democratic caucus has to take a tough line with him.
Tenants PAC donated to only one Assembly candidate—Lori Boozer of Brooklyn, who lost. The Assembly has long been a reliable supporter of pro-tenant legislation but in an interview last fall, Rent Stabilization Association leaders said they had been chipping away at the pro-tenant advantage in the Assembly. The association's PACs sent donations to 12 Assembly candidates, 11 of whom won. The biggest recipient was Mark Gjonaj, a real-estate broker and Democrat representing the 80th district in the northwest Bronx, who netted $2,500 from the RSA PACs.
"My campaign donations do not influence at all how I carry out my legislative responsibilities," Gjonaj said. "I am an independent person." Gjonaj is a harsh critic of the rent regulations regime, calling it a "failed system" that provides benefits based on which apartment someone lives in rather than their ability to pay. He stresses, however: "I am not going to let the rent laws lapse."
The threat—albeit mostly theoretical—that rent laws will lapse adds to the drama that always accompanies the rent regulations debate, which played out with typical brinkmanship in 2011, as it had in 2003, 1997 and 1993. Given that New York City has been in what is legally considered a housing emergency for decades, one wonders whether it's helpful to revisit every four or eight years what is clearly a permanent part of New York's regulatory regime. Sometimes legislators shift the laws to favor landlords. Occasionally they give tenants a break. All that's guaranteed is uncertainty. And like other businesspeople, developers and property owners like profits best—but certainty is a close second.
"My belief is that it's done intentionally," Joseph Strasburg, president of the Rent Stabilization Association, told me in October. "You're always going to have a sunset [of the rent laws] because the elected officials don't want us to forget about them—on both sides. They want to reinforce to tenants that they're there to protect their interests and that's why they should vote for them when it's time for re-election, and also to others to say, 'If you want us to be fair and not extreme you should also support us.'"
In fact, there seems to be some appetite in Albany for making rent-regulations battles an even more regular occurrence. "I’d rather have it every two years, because it adds excitement to the legislative session," Senate Majority Leader Dean Skelos told City & State in an interview last week.
Excitement and a little more cash for the campaign coffers—what's not to like?
The laws governing rent levels for nearly a million apartments in New York City and thousands more in other parts of the state are set to expire in June.
|J-51 TAX EXEMPTION:
This exemption gives owners a tax break for renovating properties if they enroll in rent stabilization and is set to expire on June 29.
|421-A TAX CREDIT:
The property tax abatement for residential developers is set to expire on June 15, and it is expected to be part of negotiations in a broader rent regulation deal.
|2 PERCENT PROPERTY TAX CAP:
The legislation will expire in 2016 unless rent regulations are extended by the legislature in 2015.