Letter to LB on landlord incentives

To: NYC Loft Board
From: New York City Loft Tenants [NYCLT]

Dear Chairman LiMandri –
Dear Ms. Alexander –

NYCLT members were heartened at Thursday’s decision by the Loft Board to draft two sets for 2-06 Interim Rent Guidelines – one with a 0% increase and one with a single-year RGB increase, lesser for tenants who pay their for utilities. To reiterate we feel strongly that there should be no Interim Rent Increase before the statutory “compliance milestone” increases of 6-8-6%.

We agree with Mr. DeLaney that awarding landlords a rent increase before they reach any milestone in the compliance process is counter-productive and actually acts as a disincentive to start the work.

There were however some misconceptions that came up in discussion by the Board that we would like to comment on to add clarity.

It was insinuated that the first 6% statutory rent increase was a difficult and expensive first step for building owners. This is simply not true. The 6% increase is awarded to landlords upon submitting a provisional first draft of architect’s plans. Not only is the work solely architectural, but the plans don’t need to be complete or viable. The 8% increase does require negotiation with tenants in the Narrative Statement Process, and architectural and legal costs, but it is still before any material work is completed. Both of these milestones are achieved through paperwork and are awarded before an owner must spend any money on actual construction, materials or building labor. The implication that a landlord will be compelled to spend huge sums of money before getting any rent increases is inaccurate – owners will actually get a 14% rent increase before beginning any physical work or making any substantial cash outlay.

In making decisions about rent increases, the Loft Board should not underestimate its responsibility to foster sustainable neighborhoods. Making buildings safe from fire and collapse is an essential endeavor. Keeping entire communities with their history and culture safe from those who seek to uproot us is a valiant effort and something we hope the Loft Board can be truly proud of for years to come.

NYCLT

cc: Council Member Stephen Levin, Council Member Erik Dilan, Brooklyn Borough President Marty Markowitz, State Assemblyman Vito Lopez, State Assemblyman Joseph Lentol, State Senator Daniel Squadron

Letter on Interim Rent Guidelines

Here is our letter to the Loft Board on Interim Rent Guidelines.

To: NYC Loft Board
From: New York City Loft Tenants [NYCLT]

Dear Ms. Pogoda –
Dear Ms. Alexander –
Dear Chairman LiMandri –

This letter is submitted to the Loft Board on December 7, 2011. We request that you distribute it to each member of the Board.

On November 30, 2011 NYCLT requested an opportunity to address the Loft Board on rule 2-06, Interim Rent Guidelines, after witnessing four “experts” who spoke to the Loft Board on that subject on November 17. Our request has been denied, despite the fact that none of the speakers we heard two weeks ago specifically addressed the issues, concerns or hardships of loft tenants and all of the experts pleaded ignorance of the specifics of the law and the rule up for discussion.

Two of the speakers called to testify to the Board represented the concerns of landlords; one was a landlord attorney. None of the speakers who addressed the Board on the 17th had any knowledge of research or statistics that elucidated a methodology on which to base rent increases; none of these speakers knew how many tenants would be affected by 2-06 rent increases, and no one was able to say what outcome rule 2-06 would have on working and middle class families and how many would be driven from their homes and workplaces due to unaffordable rents caused by compounding rent increases (the 2-06 rent proposals plus 6-8-6%). Given the lack of quantifiable research on the effect of rule 2-06 on the loft community the position of NYCLT is that any Interim Rent Guideline increase is irresponsible and arbitrary.

We are aware of Chairman LiMandri’s desire for an efficient and speedy rule making process at the Loft Board. This desire for speed and efficiency, however, is no excuse for pushing through regulations lacking due diligence and a clear understanding of how these new rules will affect tenant’s lives and livelihoods. Without this information, there is no justification for setting Interim Rent Guidelines beyond 0%.

NYCLT has extensive grass roots knowledge of the loft tenant community. We are predominantly working and middle class individuals and families, artists and small business people. Many of our ranks are also teachers. Some work for non-profit organizations.

On November 17 the subject of whether the purpose of the Loft Law was to protect housing and help foster sustainable communities, or simply to “make buildings safe”, was discussed at length. We agree with Chairman LiMandri’s assessment that the Loft Law was put in place partly to ensure tenants are not forced out by excessive rent hikes. Certainly, one of the purposes of the Loft Law is to stem the tide of displacement and gentrification that threatens so many NYC neighborhoods by keeping tenants in their homes and work places. Many loft tenants, having signed leases in the boom years, are at or above market rent and a rent increase in the present economic climate will price them out.

By awarding building owners Interim Rent Increases the Loft Board is for all intents and purposes allowing these landlords to “double dip” since most long-term tenants we’ve spoken to had received sudden huge increases of 20-100% during their tenancy. It also needs to be taken into account that by basing Interim Rent Increases on Rent Stabilization Increases there is an assumption that loft tenants are getting services similar to that of regular apartment dwellers. This is most certainly not the case. Owners often do not maintain their buildings, leaving basic maintenance to be done by the tenants.

Interim Rent Guidelines as they are currently being proposed, could be the first nail in the coffin of displacement for many tenants. Additionally the current proposal will be a disincentive to tenants who have not yet applied for loft law coverage. By all accounts the initial 6% milestone, already written into the law, is a low hurdle, and already provides enough incentive for landlords to register. If the goal of the Loft Law is as stated – to legalize as many buildings as possible and bring as many units as possible into Rent Stabilization – tenants considering applying will “do the math” and once they see the compounding numbers of IRG increases added to 6%, 8%, 6% they will simply throw up their hands.

NYCLT believes the Loft Board has a responsibility to bring all eligible tenants and buildings under their wing, to help protect and sustain diverse, self-made, entrepreneurial communities and to keep people in their homes and work places. We have suffered through enough exorbitant rent increases. We are asking the Loft Board to make the Interim Rents Guidelines 0% and help maintain the cultural diversity of New York City.

NYCLT

cc: Council Member Stephen Levin, Council Member Erik Dilan,
State Assemblyman Vito Lopez, State Assemblyman Joseph Lentol,
State Senator Daniel Squadron