Beyond My Ken

Buildings containing rent stabilized units on Broadway in Inwood, Manhattan.

Benjamin Warren has faced his share of battles as the tenant association president at 1511 Sheridan Avenue in the western Bronx. As the rent-stabilized building has traded hands among investors, he says residents have suffered from deplorable conditions, rent overcharges and unwarranted eviction cases.

Asked recently whether he was getting any help from state government in fighting the landlords’ abuses, his reply evidenced decades of frustration.

“They don’t inform the tenants of their rights, how they’re supposed to go about obtaining their money…They don’t enforce anything…They’ve never come out to check anything,” he says of the New York State Department of Housing and Community Renewal (HCR).

Landlords of rent-stabilized buildings are required to register rent-stabilized apartments and file the rents charged on each apartment with HCR, but the agency doesn’t automatically check to ensure tenants are being charged correctly. Warren has helped numerous tenants request a copy of their apartment’s rental history from HCR to check for overcharges, but he says the process of making an overcharge complaint is frustrating. In many cases there’s a four-year statute of limitations for bringing a case, it’s unpredictable whether HCR will accept a complaint, and it takes a year to get an answer, he says. And even when HCR does intervene and find fault, he adds, the agency doesn’t provide the tenant with sufficient information about what to do if the landlord doesn’t comply.

These are not new sentiments. For years, tenants have criticized what they see as HCR’s lax enforcement of the rent laws. Some have also questioned whether the city could do more to enforce them. This is a concern in neighborhoods throughout the city, but especially in neighborhoods with a large stock of rent stabilized housing and where the de Blasio administration is pursuing a neighborhood rezoning. Warren’s building, for instance, is just a few blocks from the recently-approved Jerome Avenue rezoning, which allows property owners in the area to construct more residential buildings. In such neighborhoods, advocates want more tools to ensure that if the neighborhood becomes more “desirable” and the real-estate market heats up, rent-stabilized tenants do not become victim to rent overcharges and displacement.

“Ben’s building is like a hodgepodge of everything we’ve ever experienced,” says Sheila Garcia, director of CASA New Settlement and a member of the Rent Guidelines Board. “DCHR doesn’t proactively do anything. One of the challenges that tenants have is tenants don’t even know that HCR exists … People are directly impacted by the lack of enforcement or lack of engagement by HCR.”

Both HCR and HPD say they are deeply committed to protecting tenants from bad-acting landlords and have launched new efforts to increase oversight of landlords in recent years, from HCR’s Tenant Protection Unit, which investigates landlord fraud, to the city’s new certificate of no harassment and the right to counsel in housing court. Still, advocates say there’s more steps the state, and the city, could take to protect rent-stabilized tenants from rent overcharges and illegal deregulations.

State-level battles

In rent-stabilized housing, which in New York State exists in New York City, Nassau, Westchester and Rockland County, rent increases are limited and tenants are afforded additional rights and protections. With some exceptions, the city’s rent stabilized apartments are within buildings with more than six units constructed prior to 1974. They can also be found in converted co-ops and newer buildings that have received certain tax credits. But rent-stabilized tenants can be displaced—and their apartments deregulated—through a variety of means. Landlords can apply for higher rent increases by claiming to have made renovations. They also can provide tenants with a discounted, preferential rent, but then retract that discount and get a large percentage rent increase, and they also get an automatic rent hike when an apartment becomes vacant. Tenants say the combination of that vacancy bonus and the mechanism of vacancy decontrol—which permits units priced at over $2,700, once vacated, to be deregulated—incentivizes landlords to harass tenants and clear out apartments so they can earn the rent hikes that eventually push the unit over the decontrol threshold.

Albany introduced some reforms to the law in 2015, including raising the deregulation limit from $2,500 to $2,700, which HPD says has helped to slow down the loss of rent-stabilized units. Still, New York City elected officials and advocates continue to fight for bigger changes. A report released last week by a coalition called the Upstate Downstate Housing Alliance lambasts Governor Cuomo for not closing rent-regulation loopholes and calls for an expansion of certain tenant protections to the rest of the state and the creation of housing courts throughout New York, among several other demands.

Then there’s the matter of implementing those laws. Freeman Klopott, a spokesperson for HCR, says that the agency is already working hard to ensure tenants have the information they need, and that there are multiple ways for tenants to easily obtain rent histories (see the bottom of this article for a guide).  He says every overcharge case is determined based on specific facts, and that when overcharge is found, an order is sent to both the landlord and tenant, and includes information about how tenants can recover funds. (The tenant must wait 35 days to give the landlord an opportunity to appeal, and then can either begin deducting part of the overcharge penalty from their rent, or, if the penalty exceeds $1000 and the tenant no longer lives in the apartment, they can file for a judgment that also results in a lien being placed against the owner’s property.)

Furthermore, Klopott says that the agency engages in proactive enforcement of the rent-stabilization laws through its Tenant Protection Unit.

“Governor Cuomo created the Tenant Protection Unit in 2012 to act as a proactive law-enforcement office within New York State Homes and Community Renewal.  Since then, TPU has returned more than 65,000 units to the rent stabilization system and recovered more than $4.1 million in overcharges,” Klopott wrote in an e-mail. “Along with other investigatory tools, the TPU culls the rent stabilization registry and follows up with landlords who have not properly registered apartments. A landlord’s failure to register can be used by TPU when building a criminal or civil case against bad actors.”

Still, it remains unclear just how much of the universe of illegally deregulated units and rent overcharges the TPU has touched. Aaron Carr of the Housing Rights Initiative, a nonprofit housing watchdog group, thinks not enough: He points to one report, which says TPU performed 1,100 landlord audits over two years and found in forty percent of cases, landlords could not prove they had made the renovations to justify a rent increase.

“Rent fraud is like finding rain in a rain storm,” he says, later adding in an e-mail to City Limits, “In a perfect world, if a tenant files an overcharge complaint with [HCR] and it is found that the landlord is overcharging the tenant, this would trigger an automatic investigation by [HCR] of every building owned by that landlord. Rent fraud is part of a systematic business model.”

Tenant advocates also say there are still steps HCR could take to make it easier for tenants to learn about their rights and file complaints. The Uptown United Platform, a community response to the city’s proposed Inwood rezoning, calls for broad outreach to educate rent-stabilized tenants about how to obtain their rent histories and file for overcharge complaints, as well as the creation of pop-up clinics in churches on Sundays, and in building lobbies and storefronts after work hours, where tenants can access HCR records on the spot.

Last year CASA and several other tenant advocacy organizations launched the No More MCIs campaign to push for several administrative changes that would make it easier for tenants to fight rent increases when landlords claim to have made Major Capital Improvements to their buildings, such as by extending the time allowed for tenants to contest MCI rent increases from 30 days to 90 days. And HCR is responding: The agency has extended the contestation period to 45 days, according to CASA. The agency also recently released an updated fact sheet on its website about MCIs as well as an operational bulletin that calls for a higher burden of proof from landlords seeking MCIs, among other changes. The coalition also expects to work with HCR to develop a guidebook specifically addressing how tenants can fight MCIs.

Part of the problem is that it’s unclear how many rent-stabilized units actually exist in New York City. Propublica reported in January 2016 that there was a discrepancy of nearly 200,000 units between the number of rent stabilized units documented by the census’s Housing Vacancy Survey and the number actually registered with DCHR.

Since then, that gap has shrunk, mostly thanks to survey corrections. According to the census’s most recent Housing Vacancy Survey, conducted in 2017, the city has 966,000 rent stabilized housing units, but in 2016 only 842,144 units were actually registered with HCR.  In 2017, TPU made an additional 5,600 noncompliant landlords register their units.  That still leaves a gap between the city’s survey and HCR’s rent registration records of over 100,000 units.

While there may be more than one reason for the discrepancy, critics say that part of the problem is landlords are still not registering their units because the penalties for failing to register are not enough to stop landlords from collecting the profit they can make by flouting the law.

The de Blasio administration’s approach

The de Blasio administration says that while it’s HCR’s responsibility to oversee the rent laws, it has helped to ensure those laws are implemented in a variety of ways, including educating both tenants and owners about their responsibilities and rights, funding community organizations that can help tenants obtain rent histories and fight overcharges, making sure owners who receive HPD assistance or city tax benefits register their units, and advocating for changes to the rent laws.

The de Blasio administration can also be credited with conducting door-to-door outreach to tenants through the Tenant Support Unit,  for funding anti-harassment legal services, for creating a right to counsel for all low-income tenants facing eviction in housing court, and for participating in the Tenant Harassment Prevention Task Force, a partnership with DCHR and others to prosecute landlords of rent-stabilized buildings with a pattern of harassing large numbers of tenants, often through illegal construction.

The City Council has also passed a number of new regulations to create stronger consequences for landlords that harass tenants, from the Stand for Tenant Safety bills to the new Certificate of No Harassment pilot program.

When the administration makes its pitch to rezoning neighborhoods, it mentions all these initiatives and others. In Inwood, it also specifically promised to “Ensure rent-stabilized tenants are not being charged unlawful rents,” explaining that “HPD and TPU, in coordination with community partners, will use their tools to ensure compliance with rent stabilization laws.”

But Carr says he thinks the city could still be doing more, including “a better job flagging these kind of issues and pushing the state to ramp up its enforcement policy,” as well as more stringent oversight of buildings that are receiving tax credits.  His organization has brought 30 class action lawsuits in J51 buildings in just the last two years.

Furthermore, Carr says the city’s Department of Buildings doesn’t adequately monitor construction documents filed by landlords of rent stabilized tenants. A recent investigation by Carr’s organization found that from 2013 to 2016, Kushner Companies had falsely declared it had no rent-stabilized tenants on work permits at 34 buildings and the Department of Buildings had failed to catch the error because it had not cross-checked the companies’ claims with the Department of Finance (which receives information about which of the city’s units are rent stabilized from HCR).  Many tenants said they were subject to extensive construction work that they believe was part of a plan to harass them to leave. According to The Guardian, experts say the Department of Buildings too often fails to penalize landlords for false documentation.

Kushner Companies downplayed the finding, saying filling out those documents had been outsourced to a third party and that “if mistakes or violations are identified, corrective action is taken immediately.” The company also insisting that it would never deny tenants their rights and that it has renovated thousands of apartments with few complaints. The Department of Buildings, according to the Guardian, said it would be hiring new inspectors to monitor construction. Even de Blasio agrees that there could be more done to improve information sharing between different agencies.

But Rent Stabilization Association, which represents property owners, disputes the notion that landlord harassment is a major problem driving the housing crisis. “The issue of harassment continues to be one of the most overblown of the issues raised by tenant advocates,” says Mitch Posilkin, general council for RSA.  He argued that in neighborhoods with a certificate of no harassment, HPD has had to deny few certifications, and that that there have been relatively few findings of harassment in court.

Rezoning nabes want comprehensive assessments

Rezoning neighborhoods are not short on ideas for further ways to strengthen the protections for rent stabilized tenants. One reoccurring suggestion is to move past a system of relying on tenant’s complaints and instead carry out comprehensive assessments of all a neighborhoods’ regulated housing.

“Conduct an assessment of rental history of all units above 155th Street to send tenants that information and identify landlords who routinely abuse rent laws. Work with [HCR] to audit these same property owners’ entire multi-family portfolios in the city for such abuses … Make these registered rents public so advocates can also identify patterns and intervene,” wrote Inwood stakeholders in the Uptown United Platform.

Ava Farkas, director of the Metropolitan Council on Housing and a supporter of the Uptown United Platform, says that if the state shared more information about rent history with the city and advocates, it would be easier to identify patterns of landlord behavior and be more proactive in fighting rent overcharges.

The Bronx Coalition for a Community Vision, which formed in response to the Jerome Avenue area rezoming, has been calling for a “no net loss policy” that would require the city to conduct “a baseline assessment of affordable housing units within the city, broken down by neighborhood and affordability level” that includes information about the number of units, rent levels of such units, household size and resident income. The coalition also wants a moratorium on demolitions and conversions until the assessment is completed, and for preservation goals to be set for each income bracket in neighborhoods and in the city at large.

The coalition got the idea from Portland, which adopted a no net loss policy in 2001—a law that required the city to develop an inventory of all housing units and their affordability level in the Central City area of Portland, and to update that inventory on an annual basis. The policy also requires the city to maintain the number of housing units affordable to people making below 60 percent of the Area Median Income.  Portland hasn’t actually succeeded, according to a 2015 report: The city stopped tracking their progress in 2008 and ended up losing 1,468 of 8,286 units affordable to that income level.  (New York City’s overall housing stock, it should also be noted, is more than 12 times larger than Portland’s.)

But the no net loss idea is still a popular one. Last year, a report by Los Angeles said it was also considering adopting a “no net loss of affordable housing” strategy.

Garcia says taking an inventory could be used to inform the policy debate about rezonings. The coalition’s thinking is this: The city knows the rent levels of the new affordable housing units it builds, as well as the ones it preserves through its loans. But the city’s environmental review methods for analyzing displacement assumes rent stabilized tenants will be protected from any changes in the market, and the city has never tracked how a rezoning may impact the rents in rent stabilized buildings. An inventory could help the city do just that.

Furthermore, the city has no way of knowing whether the rent levels of the affordable units it is creating are at the same rent levels as the affordable units that are being lost through rent increases, rent overcharges and deregulation.  The inventory could be key in “making sure that we’re not losing housing for folks that the new affordable housing is not going to be able to serve,” says Christopher Walters of the Association for Housing and Neighborhood Development (ANHD), which has provided support to the Bronx Coalition and other rezoning groups.

Walters says they also hope to gain greater access to a variety of city and state data about rent regulated buildings. Public data sources currently available to advocates are either not granular enough, or are not fully reliable, and HCR’s rent records—while, of course, reliant on landlord reporting—are considered by advocates to be the best data source currently out there. While the state shares such information with HPD, under the state’s privacy laws, information pertaining to the registration of specific apartments is confidential and has been difficult for advocates to access. Advocates still hope there may be ways to obtain more data without violating the privacy laws.

Piloting an inventory

It seems like HPD may have warmed up to the idea of an inventory. The de Blasio administration is piloting a new program called “Partners in Preservation,” that will be applied in East Harlem, Jerome Avenue and potentially other neighborhoods identified by the city. In the Jerome Avenue area, it will involve taking an “inventory of all regulated affordable housing to the extent possible using existing data sources and an assessment of the potential for displacement and/or deregulation.” That assessment would be used to set “neighborhood-wide preservation goals, strategies, and actions,” including special action plans for 40 rent regulated buildings. The document says those plans will include strategies to address harassment and disrepair, offer legal support, and more. In addition, the city will create a Preservation Action Center, housed at a local community organization, and allocate $200,000 to local organizations for tenant organizing.

Asked whether the risk analysis conducted under the initiative would involve HCR data on rent levels and rent histories, HPD said in an e-mail that the agency intends to use publicly available rent registration data, but that tenant organizations can also help tenants obtain their rent history, which might inform the risk analysis. This is likely to disappoint some advocates.

“Our analysis of buildings where tenants might be at risk of harassment or displacement will likely also incorporate data such as demolition job applications, vacate orders and cap rates,” HPD said.

Garcia says she’s concerned that $200,000 is insufficient to do the kind of tenant organizing necessary, and isn’t sure the initiative will include the kind of on-the-ground survey work that she thinks is needed to get an accurate picture of tenants’ rent levels and living conditions. She also hopes the initiative expands to beyond a one-year pilot and ultimately results in a no net loss commitment.  But she says, she’s glad the conversation is started.

“HPD and the city have committed to being more proactive on Jerome Avenue,” she says—and she hopes this will support tenants to resist displacement.

To obtain a copy of their rent history, rent-stabilized tenants can e-mail rentinfo@nyshcr.org or call 718-739-6400, and their rent history will be mailed to them. They can also visit a borough or District Rent Office in person to obtain their rent history by showing photo ID, proof of tenancy, and filling out an Access to Records form. Alternatively, they can send an Access to Records form and copies of proof of residency to the attention of “Records Access Officer” at Gertz Plaza, 92-31 Union Hall Street Jamaica, New York 11433 or by email to ORArecords@nyshcr.org.

Update: The Office of Councilmember Benjamin Kallos informed City Limits that a new law went into effect on January 1st that will address some of the issues identified in this article. According to Kallos’ office, the law would require that by July 2020, the city launch a new or upgraded “Housing Connect” portal, the city’s affordable housing lottery website, with several changes to make it easier for applicants to apply for affordable housing. The law also stipulates that owners of new affordable units (built since January of this year) that receive subsidy, tax credits or bonus density from the city are required to register those units with HPD itself, provide HPD information about the rents being charged for units, and describe the affordable housing program the unit benefits from, among other information. Landlords could be fined for failing to register.

According to Kallos’ office, tenants of such units will by 2021 be able to see such information about their unit to verify whether they are being charged legal rents. The legislation also requires the city to assess by July, 2021 whether it would be possible to expand the registration system to all affordable housing, including older rent stabilized units.