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DHCR Proposal a Step in the Wrong Direction on ‘Phony Demolitions’

August 13, 2008

I spoke at a press conference yesterday, along with other local elected officials, including Senator Martin Connor (pictured to my left), to oppose DHCR’s regulations proposals on demolition provisions.

It is no secret that the current real estate market provides landlords with strong incentives to find ways to remove rent-regulated tenants and convert their apartments to market-rate units. My office is contacted on a daily basis by rent-stabilized and rent-controlled tenants facing harassment, denial of services, improper refusal by landlords to renew leases or acknowledge succession rights, as well as numerous other pressures brought to bear by landlords who seek to raise rents and ultimately remove their units from regulation. In this context, it is all the more vital that the NYS Division of Housing and Community Renewal (DHCR), the watchdog for affordable housing in New York, to uphold the central principle of the Rent Stabilization Laws, which is that landlords may not evict tenants simply because they wish to charge higher rents for their apartments.

One increasingly common loophole landlords seek to exploit in order to rid their buildings concerns what we have come to call “Phony Demolitions.” The law grants landlords the right to refuse to renew leases when an owner intends to demolish the building. Increasingly, landlords have tried to convince courts that “demolition” includes cases where an apartment is merely gut renovated.

Phony demolitions represent an assault on affordable housing in New York, and an assault on the principles of the Rent Stabilization law. They reduce the stock of housing available to low- and middle-income New Yorkers, they upend families without justification, and they damage the public’s confidence in the government’s commitment to upholding the principles of rent stabilization.

In the past few years, tenant leaders and elected officials have called on DHCR to remove any ambiguity about the legal definition for “demolition” by updating the Rent Stabilization Code to clearly define it as razing a building to the ground.

Today, DHCR held a hearing on new regulations, but unfortunately what they propose is a step backward from any common-sense definition. The new language would allow landlords to evict rent-stabilized tenants in order to perform a “complete gutting of all interior space in the building.”

This change would essentially give property owners a green light to continue this abuse. I testified at the hearing today and urged DHCR not to approve these regulations because of their potential to undermine affordable housing in New York.

I asked them to instead adopt the common-sense definition as well as to guarantee tenants the right to a hearing when a landlord files a demolition application. Longstanding DHCR policy affirmed such a right, but a policy change during the Pataki administration eliminated this crucial guarantee of due process.

Also at issue is what happens to tenants in buildings that are demolished. Right now, tenants receive an inadquete stipend as compensation, but the proposed changes to the stipend have a complex formula based on “the mean registered rent of the zip code of the housing accommodation proposed for demolition.” DHCR has not clarified how such a figure would be calculated, and until they do, it’s hard to judge what this means.

But ultimately it is the stipends themselves that are the problem. They require landlords to provide minimal compensation for a limited period of time – eventually, leaving tenants to fend for themselves in an increasingly difficult real estate market. All this does is postpone the date when tenants will no longer be able to afford to live in their own neighborhoods. It’s a system, if anything, that encourages a vicious circle.

When I testified today, I told DHCR that I think the stipend should be eliminated and instead owners should be required to relocate their rent-stabilized tenants to similarly-sized apartments, in the same neighborhood, at comparable rents. If a new apartment is not rent-stabilized, DHCR should require landlords to ensure that the relocated tenants are contractually guaranteed the same rights as those provided under rent stabilization.

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Written by Micah · Filed Under Blogroll, Community 

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