Monday, June 15, 2015

UPDATED SERIES ON RENT REGULATIONS: DHCR Enforcement & Timeline of Failure


Today's article in City &State:

After the Deal: Concerns About How Rent Regs Will be Enforced

and

Today's article in City Limits:

Timeline of Failure: How NYS Got to the Brink of Rent Laws' Lapse


Friday's article, #5 with more to come:

Reform, Interrupted: Study Up for Round 2 of Debate Over 421-a


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#4 in the City Limits series:

Where is Jeff Klein in the Rent Regulations Debate?


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#3 in the series for City Limits:

Loss of 333,000 Apartments Seen


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Here's the second article, about today's tenant rally in Albany and regulations affecting residents outside of NYC:

Rent Regulation Affects Tenants Outside New York City


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Here's the first article in a series on I'm writing on rent regulations/negotiations this week for City Limits.


Cuomo's Power Tested on Rent Regulations

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FYI: Community Board Public Hearings on Citywide Upzoning Plan June 10th:

http://www.gvshp.org/_gvshp/enews/gvshp-06-02-15.htm#two

Monday, June 1, 2015

A DAY IN THE LIFE OF A NYC RENT STABILIZED APARTMENT

UPDATE: Guess who is baaaack: THE ROOFERS!! The makings of scaffolding were spotted in the building earlier this week, and for the last few days the stomping, banging and associated noises can be heard both overhead and through the windows.

What's more, the tenants have just received new MCI applications, but not for the roof. One is for an unnecessary TV/security system worth more than $10,000. By unnecessary, I mean in the 20 years we've been together, I can't recall an incident of theft, robbery or the like--though there has been a problem with teenagers in the building smoking pot in the stairwells during the winter months. Installing a security system now is particularly ironic because during the heyday of the crack epidemic, the area was considered a ground zero for its sale. The landlord took no precautions to safeguard either the building or tenants then, but now that the neighborhood is gentrifying and "safer," it's clearly appropriate to step up security.

This another of the scams inherent in the MCI process--owners are permitted to make "improvements" whether they are needed or not, and regardless of what tenants may want. Anything to keep bumping up those base rents...

The second application (so far) is for a backflow preventer installed in 2013, allegedly at a cost of almost $14,000. I'm not sure what that is, but why wasn't it included along with the smorgasbord of other applications submitted in 2013? 

This highlights more system-wide weaknesses: how easy it is for landlords to get away with fraud. Despite what the agency says publicly, DHCR only really goes by check copies submitted by owners to verify work. With technology being what it currently is, it doesn't take much to make things up but still look official. It's also well known DHCR regularly ignores its own regulations.

And then there's self-certification, where DHCR relies on what an owner states to have done, but because of massive underfunding, too few inspectors and a lack of political will from the Governor, it's extremely difficult if not impossible to ensure the work occurred as described in the MCI application. And, we all know how well self-cert has worked within the city since Giuliani instituted it: crane and building collapses, illegal gas siphoning, an escalation in construction worker deaths due to unsafe conditions, developers building in excess of zoning limits....
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More extinct NYC sites as seen on Seinfeld reruns: La Reserve restaurant, Gladiator Gym....
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Even though I'm in the early stages of two different articles, I wanted to post this anecdote:

Recently, my boyfriend's rent-stabilized building underwent serious upheaval. The most current issues stem from roof work beginning late last October. From the very first day--the day the roofers literally just put equipment out--most if not all the apartments on the top floor began experiencing cracks in their ceilings. 


Because the city allows non-emergency work to commence as early as 7am, every morning started with what sounded like the workers throwing heavy equipment across the roof, that they were jumping in place over our heads--and then the banging and drilling started. The rooms shook. This continued for months, with breaks only for inclement weather.


The work permits posted listed several jobs including asbestos removal that are valid until August 2015, all the while management kept telling tenants the work would only continue for a few weeks or months. They seemingly stopped about three weeks ago. The perennial question, of course, is who on earth begins roof work going into winter?

The Friday after Thanksgiving turned into a debacle. Whatever the roofers had already done left the roof extremely vulnerable to water seepage. His apartment was so deluged with water because that happened to be a rainy day, that there were about 10 receptacles set up to collect the leaks, including at least four 55-gallon garbage pails the super lent him. We're talking about mini-gushers in some spots. Of course, his apartment was not an isolated case.

There were leaks in every room, water damage in most, and the phone line shorted out. Eventually, so did an electrical outlet. 


Plaster and bits of ceiling began falling, first as crumbles but eventually in small-to-medium sized chunks. It got so bad, he went around with a ladder, broom and scraper to poke out the water and air pockets to limit the potential of what could fall. He ended up filling two of those 55-gallon cans with debris.


Many complaints were lodged with 311 and online from a myriad of tenants. They ranged from reports of the damage and destruction; to a growing number of cracks throughout individual apartments as well as building-wide; to the fact the roof team often worked well past weekday hours (sometimes as late as 10pm) and on Saturdays. There was also considerable concern about whether the leaking water was asbestos-tainted, as well as what if any safety precautions were undertaken while they removed asbestos or to limit asbestos dust from tracking throughout the building. Some also filed 'dimunition of services for individual apartments' forms with the NYS Division of Homes and Community Renewal (DHCR).

Mind you, his apartment and others were repaired and painted in 2012, because of even earlier roof work which was also the direct cause of leaks, cracks and general chaos. Portions of walls had to be torn out in his apartment and in the one directly below due to widespread mold caused by the leaks. In fact, extensive repairs had to be made to the roof itself to correct the damage done from the first go-round, about seven years ago (which means it took them four to make the 2012 repairs). 


Still, the damage was much greater from the work commenced last year.

The landlord received giant Major Capital Improvement (MCI) increases for which he applied in 2013 and was granted in 2014 for jobs that included the roof, facade, partial parapet work, and some pointing. As a result of DHCR's action, the rent jumped by more than $200 per month, separate from any RGB increases.

In total, this means three attempts to "fix" the roof.


A letter from management dated December 2014, said, "The building has needed a significant amount of repairs in recent years, and we had hoped that the facade and parapet work would address the leaks that you and others on the 6th floor had been experiencing.

Unfortunately, while some of the leaks were addressed, several were not and the replacement of the entire roof could not be delayed any longer. The existing roof deck is constructed of wood planks. Several of the wood planks were found rotted and in need of replacement...[which] was not anticipated when this project initiated." 


This is significant as his apartment and others never had leaks until the initial roof work; furthermore, how is it the landlord was unaware the wood planks were rotted (at least in part) after the repairs just two years earlier?


"While working into the evening is not ideal, the roof deck cannot be left exposed or uncovered..." Except it clearly was, because if you had seen the leakage, you'd know there was virtually nothing standing in between the roof and the ceilings.


"The conditions of the original parapets and bulkheads below the roof line have also required a significant amount of repair." Again, for which they received MCIs in 2014. Clearly, as maintained by the tenants in response to the 2013 application, the work was either incomplete or poorly done.

"Even with best efforts to cover them, the heavy rain rain breached the protective sheets and caused the recent leaks. As of November 28th, the roof has been made completely watertight and there have been no further leaks into any area of the building." Except that there were additional leaks after the 28th, including the one that caused an electrical outlet to short out in the kitchen.

The neighbors were finally galvanized to organize and hire an attorney after they received the 2013 MCI applications, which is unfortunately the only real recourse tenants have. The lawyer is primarily focusing on challenging the haphazard parapet work. The state's rent stabilization code requires "complete replacement," which was clearly not the case. 

For whatever reason, they decided not to challenge the MCI granted for whatever was done to the roof. (Of course, the case could be made shoddy work should be automatically challenged, but the landlord-friendly system doesn't work that way.)

There is widespread concern the landlord will file another MCI application for the latest work because--the owner claims--as cited a few paragraphs earlier, repairs alone will not fix the problems. And, DHCR permits total rehabs.


This is a hugely controversial facet of the MCI program, because very often, owners deliberately allow conditions to deteriorate so considerably simple repairs won't suffice, as described in an article I wrote last December. It's effectively a perverse incentive to reward doing the absolutely wrong thing.


By the way, when HPD finally did send an inspector earlier this year (who miraculously appeared to be a diligent and dedicated worker), we discovered all the complaints should have been lodged about the roof itself and not about the apartment. The laundry list of complaints were, therefore, dismissed on a technicality--even though many were made over the telephone with an employee from either HPD or DOB, who could have apprised him of this at any point because conversations were had in each case. Frankly, who would have ever thought to do this, as the damage was inside the apartment?

DHCR has yet to respond or send anyone.


I can't omit that the walk through with the managing agent and contractor included talk the work would involve sheet rock to cover the damage, and then plaster. Yet, when the workers appeared, no sheet rock materialized, so he now worries whatever mending was done will be insufficient to prevent a recurrence. Also, my boyfriend was adamant about not allowing the repairs to even start before the roof was complete because he wanted to ensure everything was dry, though management lobbied him repeatedly.


And, it's not as if he was or will ever be compensated for the amount of time and energy he spent cleaning up the water damage, going around the apartment preemptively popping air and water pockets, and twice having to single-handedly move furniture from room to room to allow for the repairs
He managed to fill another 55-gallon can with water-soaked wall paper he personally stripped because otherwise they would have just painted over the paper. 

He will never get back the hours wasted trying to negotiate when the repairs would be made with both the managing agent and then the contractors. Nor for the work he had to turn down to be available for either management or the days work was done, because he didn't trust them to do a competent job unsupervised--given the track record, would you?


The point of this tale is two-fold:

1. Not only to give a glimpse into the not-uncommon pressures under which regulated tenants are forced to live, but to underscore something my boyfriend told me. Your home, he said, is supposed to be your safe place away from the enormous stresses already placed on our day-to-day lives as New Yorkers. To instead have this respite be the source of them--for eight long months--was almost too much for him to bear. 

One can only imagine what the physical state or mindset must be of tenants who face seriously dangerous conditions like toxic mold or no heat in winter everyday.


Whatever your view of rent regulations may be, we're still talking about tenants who are contractually obligated to pay rent in return for a safe place to live. NY State's warrant of habitability is supposed to guarantee a certain standard of just that--habitability. 


However, DHCR--which oversees most regulated-related issues including MCIs--and the city's housing agency, HPD, give landlords enormous latitude and flexibility to circumvent these commitments. There are also countless existing loopholes to facilitate this kind of activity.


Both agencies are notorious for looking the other way--or worse--time and time again when tenants are living in sub par conditions. As recounted previously on Ethics Ain't Pretty, HPD can barely recognize what might be considered harassment, even though it's reached epic proportions. 


2. The other is to remind readers the state's rent laws are set to expire mid-June. Extending the current laws alone will not suffice in helping tenants. An important tenet of what activists are advocating is to reform the MCI system--not only in what can be considered an MCI, but in the way tenants pay for these "improvements" in perpetuity, long after a landlord has recouped the initial investment (because after all, it IS an investment to keep your property in working order.) 


Even though DHCR initially granted a $200 per month increase, the agency later modified the ruling to about $60. However, despite the modification, that $200 still applies to the base rent and all future increases will be calculated with that amount as the starting point. All part of the game...

Every NYC regulated tenant--and anyone who cares about fairness and keeping the city remotely diverse, whether economically or racially--must convey this message to their state legislators and the governor

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TakeBackNYC, a new coalition of small business owners, residents and community organizations will be hosting a forum on Thursday, June 4th, 2015 @ 7pm at St. Joseph’s High School, 80 Willoughby Street. 

As was the case with a March forum, the goal is to allow different stakeholders to learn about and bring awareness to the problem, and its root cause: exorbitant rents and a lack of rights for commercial tenants. I've recounted ad nauseum on this blog about the situation and how political it is, mainly because it involves REBNY and big real estate--who want to maintain their unfettered ability to make the largest profits as possible, facilitated by our city's government.


They'll also discuss the different proposals currently under consideration in the City Council. That there are even multiple "solutions" and now acknowledgement of an actual crises of mass closings is in itself a minor victory for the small business community. Among them is the 'Small Business Jobs Survival Act,' which is the solution most supported by real small business owners and activists. 

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There's also a #SAVENYC event scheduled for Saturday, June 6, featuring The Rocksteady 7. Doors open @8pm, Hank's Saloon, 46 Third Avenue at Atlantic, Brooklyn, NY. 






Friday, May 1, 2015

What's missing from #OneNYC? Why losing NYC character is important, RGB increases, #SAVENYC event tomorrow....

Since my last post, here are a few more businesses that I saw on Seinfeld re-runs which have also vanished: United Artists movie theater in Times Square, 50th Street Guild movie theater, Putamayo, Chock Full o'Nuts coffee shops...
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And speaking of businesses, it's hugely curious the de Blasio administration's new #OneNYC (his version of Mayor Bloomberg's sustainability plan) includes a purported goal of lifting people out of poverty, while simultaneously appearing to ignore one of the most sure-fire measures that has accomplished this. Small businesses have traditionally been considered a major pathway for low-income earners to achieve social mobility. 

In fact, small businesses in general are often the only employers of the least desirable, like people with little education or with a criminal record, because they take chances, including in hiring. Just starting a small businesses implies you're a chance-taker, as the odds are overwhelmingly against you at the outset. And, you can be sure big corporations don't take similar hiring risks, and government hiring usually involves rules, regulations and certain minimum requirements.

Yet, there is not a single reference to saving an existing business or to job retention in #OneNYC, or anywhere else in the administration's repertoire, for that matter.

Depending upon whom you ask, immigrants own either almost 50 percent of all NYC small businesses according to the city's small business agency, or more than 80 percent, small biz advocates like the Small Business Congress (SBC) estimate.


Regardless, why would the mayor's plan ignore existing businesses? You can talk about creating jobs, workforce development and better job training up the wazoo, but why wouldn't you do anything to protect those that already exist? 

This heartfelt editorial written by an immigrant small business owner goes to the crux of what's wrong with the city's two decades of ignoring the needs of our mom and pop stores--a policy still in place and seemingly not in any danger of imminent change.


#OneNYC's biggest "initiative" to directly help the poor is raising the minimum wage, an admirable and necessary goal. However, it's a somewhat simplistic and one-sided solution that could ultimately backfire, if it alone is enacted.

To put this into perspective, understand NYC small businesses contend both with exorbitant rents IN ADDITION to often paying a landlord's passed-on property taxes. Throw in a living wage requirement, or anything that could lower revenues for many mom and pops, and that could very well be the tipping point. It's just too much pressure--something inevitably has to give. We could potentially see widespread closures and massive amounts of job layoffs.

Now, before you think I'm adopting some reactionary position suggesting a living wage is less important than keeping small businesses open, that misses the critical point. It's not an either or question---we should be able to have both.

The key reasons the city's mom and pops operate within such a hostile climate are twofold:
1-The unfettered speculative real estate market--rising rent is a major cause of prices increasing, but wages are stagnating simultaneously, and every lease renewal puts more pressure on wages. Every rent increase essentially takes away any flexibility a small business owner may have had and that covers how much workers are paid above minimum wage. Steve Null from the SBC said, "There's a jobs AND wages crisis, and its connected. [Real estate] speculation and profiteering is causing inflation." 

2-The top-down economic policy started under Mayor Giuliani, but expanded as if on steroids under Bloomberg; As Null explained, instead of the city asking small biz owners 'How can we help you pay more [to your workers]?,' it ignores the environment under which they operate, permitting speculators to keep making bigger profits. "You can have better wages or higher landlord profits, but not both. You have to make an economic priority," Null said.

Let's not kid ourselves--we all know the main reasons small business after small business close in NYC--especially these days--are astronomical rent increases or a tenant being denied a new lease.

To help paint the picture, the SBC described some of the most common results when a commercial lease expires:

  • It's a death sentence for many long-established businesses, arts and cultural institutions, and for thousands of jobs;
  • It perpetuates sky-high rents, the changing character of city neighborhoods and loss of an energy and spirit to that community that can't be replaced;
  • The loss of opportunity for social mobility and critical first job experience for lower income families;
  • Countless empty storefronts on main street, with some spaces warehoused for years to maintain artificially high rents.

The mayor can change this immediately if he so chooses. After all, as previously written in EAP, Council Member Bill de Blasio was once a sponsor of the 'Small Business Jobs Survival Act' (SBJSA), which he called a means to fighting economic injustice. 

The SBJSA is intended to equalize the one-sided relationship between commercial tenants and landlords by bestowing tenants with rights: equal rights to negotiate and mediation, to a lease renewal, and to a lease that would cover a decent time span.

And this bill applies not only to retail tenants, but also cultural/arts organizations and professional offices--as opposed to at least one other proposal currently floating around. Unfortunately, these desperately needed rights seem to have disappeared from the mayor's brain.

It shouldn't be surprising given the deputy mayor for housing and economic development, who recently told a radio interviewer in a stunning example of cluelessness, "New Yorkers have a tendency to over-romanticize the city's past...to rewrite history. Change is hard but change can also be great." 

How can someone with such authority and responsibility be so incredibly wrong? Then again, given her chosen and limited frame of reference--predominantly Goldman Sach's Urban Investment Group and Giuliani's HPD--I guess it's not that shocking.

Jeremiah Moss, creator of the Vanishing-NY blog and the #SAVENYC campaign, articulately explained why the DM is so deluded, in a segment I produced for WBAI radio's 'The Morning Show' on April 16:

I hear this argument a lot, that it's just all about nostalgia, and it's NOT all about nostalgia. It's not about the past really, it's about the present and a very real problem in the present of NYC losing its unique character. So, while many of the places we're losing are older--older places i think are like elderly people, the most vulnerable in this society--it's really about preserving and protecting what makes New York, New York. 

And that's not a nostalgic endeavor, that's about wanting to have a place with character, and we know NY is losing its character. We're hearing about it now everyday. We hear about it from celebrities. We hear about it from tourists. We hear about it from writers. It shows up in film... on Saturday Night Live. This is clearly something that most people agree upon...It's [the city] not there anymore, and it's disappearing faster and faster everyday.

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Like clockwork, the Rent Guideline Board's (RGB) just-released preliminary increase numbers for stabilized lease renewals simply underscore how utterly meaningless the administration has been about affordability--and sadly, how beholden it is to the real estate industry. 

Last year's shenanigans were bad enough. But in a year where owners costs have demonstrably dropped, it seems as though our progressive mayor--with his total control of RGB appointments and the cover the RGB's own data offered--if he had wanted a freeze or negligent increases, the mayor could have easily gotten them.

Instead, we got 0-2 percent increases for one-year lease renewals and 0.5-3.5 percent for two. One tenant activist wrote: BDB/Alicia Glen Screw Tenants Again.  
This year the argument for a rent freeze, or even a decrease, and the accompanying data, are even stronger. While the freeze is still in play, the upper boundaries are even higher than last year. And for a two-year lease, the lower number.... is almost a full percentage point higher than last year's 2.75 percent. With the decrease in landlord expenses, especially fuel, a 0.5 percent increase is obscene. These ranges were set with the full approval of Mayor de Blasio. (Glen is the DM to whom I referred earlier.)

It should be noted the RGB's own 2015 Price Index of Operating Costs for rent-stabilized apartment buildings increased by a mere 0.5 percent. The federal government's 2015 cost of living adjustment (in this case, increase) was 1.7 percent.

How on earth are these ranges justified, especially for two-year renewals? This administration was welcomed by many who expected a deliverance after so many years of exclusively pro-landlord disproportionate increases. Disappointment shouldn't be the only response. People should be irate and inundating their Council Member, Speaker and Mayor with calls and emails. They should be marching on those offices. This cannot and should not be accepted as a fait accompli.
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Don't forget #SAVENYC's rally/concert at Arlene's Grocery, in what remains of Manhattan's LES tomorrow, Saturday, May 2 @10pm. Admission is $5, with appearance by the very fabulous and entertaining NYC stalwart, performance artist Penny Arcade, and original NYC punk and front man of the Dictators-NYC (formerly the Dictators), Handsome Dick Manitoba. 

Having seen both perform several times, get ready for lots of fun. Because both are veterans of the city's one time thriving underground/alternative scene, prepare to also be schooled in why NYC's disappearing character is so damned important.
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Update and Correction: The RGB's 2-year lease renewal range is 0.5-3.5 percent, not 3.5-5 percent. Additional information has also been added.

Monday, March 30, 2015

A TALE pt. 2; SBJSA; EV Explosion, RGB......

2nd UPDATE: There are reports out of the immediate area affected by the gas explosion that the local businesses are really hurting. From a friend on 6th Street: As for local businesses, things are bad because we haven't had access to them, everything has been blocked off. Tuesdays was the first day I could get to the supermarket, and my laundry place, which is on 7th Street, still has police barricades and cops (you have to tell them where you are going.) Gem Spa, which I have been to twice this week, is only accessible from St. Marks side, the block is still all barricaded except as of yesterday, and the east side of street now has area where pedestrians can walk.... Had sweet conversations with supermarket with supermarket and laundry people, they were happy to see me (and everyone.) 

PLEASE PATRONIZE THESE LONG-ESTABLISHED BUSINESSES: GEM SPA NEWS STAND, MOISHE'S KOSHER BAKERY, B&H DAIRY, STAGE RESTAURANT, PORTO RICO COFFEE/TEA STORE... LET'S PREVENT A REPEAT OF WHAT HAPPENED AFTER THE EAST HARLEM EXPLOSION-- those businesses are still struggling, state-promised relief hasn't yet materialized a year later, and the city appears to be MIA.

UPDATE: Check out this blog and video about the area's history of disasters and the familiar conjecture why it has been allowed to go on.

The latest building explosion occurred one block north of my own. My sincerest sympathies to the tenants of those buildings whose lives are now in shambles. 

Construction--both legal and illegal--have placed the neighborhood under siege for years. The plumbing and gas work the city had stopped just a short time before the explosion will probably result in some kind of criminal charges against the contractor or subcontractor. However, it is the landlord who should most be held most accountable. Sadly, the likelihood of this is not great, based on history. Business as usual for NYC real estate......

It should be be noted that since Giuliani instituted self-certification--12 whole weeks of waiting otherwise!--that wild west development mentality to which i alluded last post is the norm, not the exception. We don't know if the plethora of construction crews and contractors who work across the boroughs are licensed and/or union--the only measures that ensure codes and safety regulations are strictly followed--and even then, it's still no guarantee

In other words, the city has enabled circumvention of rules to accelerate construction, too often at the expense of workers and residents alike. When there is malfeasance, the city has usually slapped the culprit's wrist, with little follow up. Remember how many offenses it took for architect Robert Scarano to lose his license? 

The Building's Department has been badly-run and underfunded for many years now, notoriously one of the city's two worst agencies, and the latest scandal is further evidence of this. An article quoted DOI Commissioner Mark Peters, who said "a leading reason bribery recurs is that inspectors have the unilateral power to quickly stop projects or let them resume--as they should, he said, in case of a safety hazard. But the combination of modest wages and the authority to make decisions worth millions of dollars to builders is a recipe for graft." It should be noted there is so far no evidence of bribery in the case of the East Village explosion.

One would think tightening-up city oversight of these potentially dangerous situations--whether it's a crane toppling over, ill-equipped private contractors working on volatile gas lines, or architects designing buildings that exceed site zoning--would finally become a priority, even before this latest incident. Alas, as I mention later in this post, the current administration (at least so far) seems to feel building at any cost should remain the priority.

Meanwhile, we should also be mourning the loss of a beautiful building, a wonderful example of early 20th-century architecture--a dying breed--probably because of greed. Has NYU already approached the owner about buying the land to construct yet another shoe-box looking over sized dormitory, as they can get extra bulk using a community facility bonus?
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In my most recent post of Ethics Ain't Pretty, I wrote about the plight of the city's small businesses, and the 'Small Business Jobs Survival Act.' The matter was really underscored lately as I found myself watching Seinfeld re-runs, circa 1994-96. Every single local store they showed (or used) as an exterior location no longer exists: the Regency and Metro movie theatres, Antique Boutique, Shakespeare &Company and Brentano's book stores, Love's discount drugs, the Improv, and a small Manhattan antique/junk store formerly located on 2nd Avenue between 3rd and 4th Streets. Frankly, it became sort of a morbid game for me.

I'm grateful the #SAVENYC campaign has garnered some traction, and I'm encouraged the organizers are beginning to realize momentum doesn't necessarily lead to action. Generally speaking, we'll all be waiting a long time by relying simply on the hope elected officials will do the right thing. It's still up to average citizens to back up that momentum using tools like: 
-Phone calls and letters to your council member, council speaker and mayor; 
-Street petition drives, as well as online: Save Our Jobs: Support the Small Business Jobs Survival Act (File #: Int 0402-2014), and make sure the petitions get to the area's electeds as well as an individual landlord;
-Flyer distributions;
-Holding public events like the recent Little Italy action, more forums, and press conferences where you essentially shame council members (especially those of immigrant origin) who don't support the bill, and thank those who do--utilize the myriad of community media vehicles, especially in the Bronx, Queens and Brooklyn.

Before I was a journalist, in my previous life I worked on political campaigns. It is critical to understand success will only come from the grassroots upwards, especially because the opposition is well-funded (the real estate industry), intractable (the bureaucracy), and either compromised or lacking in morale courage or political will (too many of our elected officials.)

YOU MUST BE VISIBLE. This will be a street battle. It will only be won block by block, district by district, and borough by borough. 
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Now, back to the main point of this entry, which as you will see, is extremely prescient. I started having regular and very specific nightmares in the mid-late 1990's that tortured me--mostly of my neighborhood--where every single building had been torn down and replaced by giant interchangeable shoe-box luxury towers. Not a single store remained from when I first moved in (or earlier), not a silhouette was familiar. 

My own building kept morphing into different shapes, but more importantly, I usually could not gain access. Sometimes the front door was moved; other times it simply didn't exist. The dinky elevator's door rarely opened, and if it did, would never stop at my floor. 

The nightmares weren't reserved for just my neighborhood and in fact, were amply repeated throughout the city. Every institution that helped to make NYC so unique--the rep movie theaters, used book, record and clothing stores, decent clubs, affordable (often ethnic) restaurants, historic markets and bakeries--any place that once offered something different from the norm all disappeared. The small businesses owned and run by people who worked 15 hour days, often seven days a week--people who were my friends and neighbors, vanished. (That one played repeatedly for a time when a three-generation Palestinian family who ran my local pet store was forced to close after 18 years because they were denied a new lease, no matter what the terms.)

Sometimes, they were more sinister: large institutions (usually academic or medical) literally gobbled up everything within sight. Giant development projects forced parades of the displaced to shuffle across various avenues, desperately in search of a safe and affordable place to resettle, with the ranks of the homeless swelling to never before seen heights. There were variations on these themes, but you get the drift.

Then, a little more than a year ago, I had this lovely dream where the darkness engulfing the city was replaced by light. As cliched as it may sound, for a while there, my dreams were optimistic and hopeful, even when they had nothing to do in substance with the city in which I grew up. (The same city where, after two years of college in DC, I transferred to a school here. I never missed my family, just my city.)

After a few months, the lightness began to dissipate. Slowly, some of the old nightmares returned. Nowadays, I have them regularly, interspersed with an entire set of new ones. On too many fronts, it's starting to feel like there was never an election, a new mayor or new administrationThat old feeling of deja vu is now coming on strongly.

There's the secret deal City Hall reached to sell certain NYCHA apartments--a variation of an idea that first originated with the Bloomberg regime. And despite his outspokenness against the Bloomberg plan to sell NYCHA land, it was just reported the de Blasio administration plans to do exactly that.

There is great irony in the fact the deal was made with not only very well-connected firms regardless of who has been mayor, but ones with dubious reputations for less-than-stellar work, L&M Development Partners/BFC Partners (who work together quite a bit in the field of affordable housing). Guess who one of L&M's lending partners is--Goldman Sach's Urban Investment Group, which our current deputy mayor for housing and economic development used to run. L&M also has a questionable track-record regarding subcontractors, fair wages and workers, hiring one even after the firm's owners "plead guilty to criminal charges of tax evasion and paying workers off the books."

So, the city is looking to improve living conditions for the poorest from companies commonly known not only to build shoddily, but who are also less than willing to correct their mistakes. BFC even had the chutzpah to unsuccessfully sue homeowners to shut them up for having the nerve to complain to their elected officials, given that the homes were subsidized with public money.

And, BFC first rose to prominence in the 1990's during the Giuliani administration for tearing down community gardens. Hmmm--isn't that interesting? That same aforementioned deputy mayor was a senior official in Giuliani's HPD, the point agency involved in selling off the gardens. I personally don't believe in coincidences when it comes to real estate in New York.

The development "deals" negotiated thus far are hardly a vast improvement in terms of the actual number of affordable units created. There's also the little matter of how quickly the city jumped to negotiate with a developer/landlord who has a history of harassing rent-stabilized tenants in an effort to vacate regulated units--precisely the kind of behavior about which Mayor de Blasio has been outspoken against. 


And, the perpetual question, "Affordable for whom?" appears to be answered in a shockingly similar fashion as when it was asked of the Bloomberg administration. (A-not for the people who need it most. No matter how you spin it, people or families earning $100,000 a year or more simply don't need the same kind of assistance. Whether they choose to send their children to exorbitantly priced private schools should not be a public policy quandary for the rest of us, especially today with options like school choice.)

During the mayor's race, candidate de Blasio repeatedly expressed his belief the city just hadn't benefited appropriately for such developer incentive programs to continue, particularly regarding financial bonuses to build affordable housing. However, Mayor de Blasio's recent 'State of the City' address and subsequent machinations have made it clear 421a with perhaps some tinkering, and its cousin, IZ, are both under serious consideration.  

Many don't realize how similar IZ is to something like 421a. In the end, they both predominantly lead to large towers, commercial and tenant displacement, segregation, and too few many actually affordable units. All the while, the money keeps rolling in for developers--why else would REBNY and its media shills keep maintaining that we need these incentives because otherwise no affordable housing would be built.

It's been widely reported the city spends in excess of one billion dollars per year on 421a alone, but what about the ancillary costs? As David Jones, president and CEO of the Community Service Society wrote, that expenditure exceeds "the entire budget of the Department of Housing Preservation and Development (HPD), which enforces the housing code, supports the development of new housing and distributes 33,000 federal Section 8 vouchers." Jones also noted that amount could pay for about 100,000 new rent vouchers. 

There's the concomitant costs when residential tenants are priced out so they either have to move--sometimes away from the city--or worse, become homeless. The city already pays about $3000 per month per homeless family for the privilege of being crammed into a dismal, tiny slum hotel. Yes, this is an area where the mayor and his highly qualified HRA commissioner are committed to improving conditions, but it will take time to undo so many years of willful neglect, disregard and callousness.

There is also a loss to the tax base when local businesses--usually long established--are forced out. It's been well proven local businesses contribute more to the local economy than franchises or chain stores do. And, what about the associated job loss, particularly damaging to immigrant and other vulnerable populations?


Mayor de Blasio's latest budget allots for more legal services in gentrifying areas, ie, those locations his administration will be singling out for the bulk of development and added density. But that extra money won't help tenants outside of those neighborhoods. And, it does little to correct HPD itself, where the root of so many problems originate.

Furthermore, few seem to take into account the impact of more towers and more people on the city's decrepit infrastructure. Our mass transit system is already over capacity, while both the city and state keep reducing their portion of funding. The cost of much delayed repairs to city bridges has become astronomical.

In many areas, there are insufficient numbers of public schools and/or seats in those schools. The energy power grid continues to age and deteriorate, with ruptures and 14 recent manhole cover explosions in Brooklyn alone. This  point now seems particularly salient.

We face increasing numbers of water main breaks, subway and street floodings, and the fairly recent phenomenon of sewage back-ups over the last two decades. It's not a coincidence these events have occurred at the same time of unbridled development with little thought to overall planning.

Granted, issues like climate change aren't something the mayor alone can solve, but he can certainly make sure the city plans more efficiently and effectively. Yet, the department of City Planning is something of a misnomer because it implies the chair, commissioners and staff take a macro-view on how and what shapes NYC. 

In reality, they lurch from mega-development project to mega project, zonings (sometimes up and sometimes down), and now rezonings, if Mayor de Blasio has his way. According to Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, these rezonings would mostly result in buildings 20-30 percent higher, even in contextual zoning districts. 

In areas where affordable housing has been included within these districts, the results have been mixed--not the influx of affordable units the city is promising will manifest. And this would be completely separate from any incentive or bonus programs like 421a, IZ, low income housing loans, etc., so developers can still get these breaks as well. 

Finally, the aesthetic argument the city is promulgating is simply ludicrous and ironic--that NY would be oh-so-much more livable without the boxiness of contextual zoning---BY ALLOWING TALLER BUILDINGS EVERYWHERE, to block out what little sun we have remaining to us. Because, that strategy has worked so well in the past....

Berman wrote in a recent op ed, "Fewer restrictions on height, allowing grander floor-to-ceiling heights and apartments with more commanding views, would fetch developers even higher prices. But it certainly would not make these new apartments more affordable. And neighborhoods would pay the price with less light, air and sky, and a loss of the character and scale they fought so hard to maintain... The main beneficiaries of these aspects of the 'Zoning for Quality and Affordability' plan appear to be real estate interests, not those who care about quality design or affordable housing. It's likely no coincidence that these proposed changes are ones that deep-pocketed developers have sought for years. Now, wrapped in claims about quality and affordability, they finally have a chance to get them." Enough said.

Not widely commented on at the time, the mayor's affordable housing plan from last year actually calls for accelerating the land use and environmental review processes, and making it easier for developers to build. Often, those reviews are the only lines of defense for a neighborhood to fight against the vast resources and lawyers of a developer, and a government more interested in enabling and enriching them than ensuring a habitable city. Despite its name, the city's new zoning plan underscores the real priority.

Pundits and journalists alike are missing the broader picture: it's not just examining how a specific program works--or doesn't, as is really the case. We can continue to examine 421a or IZ or any some such developer incentive scheme, or even the zoning plan, individually. But, we're not connecting the dots, to the detriment of the people who call this city home.
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As spring begins, so does the annual farce over lease renewals at the Rent Guidelines Board (RGB). The Rent Stabilization Association has already begun its radio campaign, first with general anti-rent regulations ads. Soon, we'll be subjected to the woe-is-me tales narrated by (allegedly) small landlords, many of whom live in their own buildings. Too bad so many regulated buildings are actually owned by large companies...

Additionally, there's already a bad precedent--where last year's vociferous pledges for a rent freeze failed to materialize thanks to interference from Mayor de Blasio's own deputy mayor for housing and economic development. Frankly, I'm frightened to see what's in store for stabilized tenants this year. There's been no similar promises so far, despite the massive decline in oil costs. Many people don't realize the board has never not voted for increases in its history. 

And there was this odd (and a little creepy) video, which had limited distribution. Note to the mayor's communications team: justing saying it in a bunch of different languages doesn't make it so. (I hope the city didn't spend a lot of money in its production!)

Now comes the news the mayor appointed a Forest City Ratner executive as an owner representative to the RGB. Ratner, of course, is best known for the Atlantic Yards boondoggle, which helped to destroy viable Brooklyn communities. Where the eventual (if ever actual) "affordable housing" will be unaffordable to a majority of New Yorkers who most need it, despite millions in tax abatements. 

Ratner cannot alone be blamed for this outcome--that would be like blaming a rat for eating garbage. Developers take advantage of whatever they can to make the greatest profits possible--it's what they do. That's where government is obligated to intervene, and where both the city and state have failed miserably.

What on earth can this person actually know about living in a rent-regulated apartment, an aging housing stock, and underfunded and unresponsive government agencies who regularly stand aside while landlords harass tenants, make unnecessary improvements for the reward of increased rent (often for things they should be doing in the first place) with the goal of destabilization. Last year's appointment as owner representative has a similarly dubious background.

No, things are not boding well for the city's roughly one million stabilized apartments. And we haven't even gotten to June...

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Tuesday, March 3, 2015

LAST HOPE FOR MOM AND POPS IN NYC?

UPDATE: This recent Crain's article demonstrates the difficulty our small businesses face on a myriad of fronts. In this case, the city has consistently failed to protect manufacturing zones, so land prices have shot up. The business ultimately had to contract, which probably means job losses (though oddly, the article doesn't say). Similarly, when a landlord only offers a one or two year lease to a commercial tenant, that makes planning for the future virtually impossible. Without the ability to plan ahead, businesses can't expand or hire additional workers. Often, because of this state of limbo, they have to cut staff. The SBSJA would require lease renewals to be a minimum of ten years.

Over the summer, I reported about the latest revival in the City Council of the 'Small Business Jobs Survival Act' (SBJSA), a bill that's been kicking around in some version since the mid-1980's and initially championed by then-UWS member, Ruth Messinger. The *Villager newspaper has been one of the few media outlets consistently reporting on this issue over the last few years, including a vital explanation of history and the political context. I urge you to read this recent article

The bill would require arbitration between a landlord and a tenant to negotiate a fair lease for both parties, equalizing the currently lopsided relationship. As it stands now, commercial tenants have no rights whatsoever.

Significantly, it would definitively stop the rampant extortion by some landlords in order to grant a renewal--especially in immigrant communities. Even though this is technically already illegal, it's rarely been an issue about which law enforcement and elected officials have been particularly motivated to take action. In many ways, it's a perfect crime as few complain, especially immigrants.


It's been well documented local businesses contribute more to the local economy than franchises or chain stores do. But we often forget about those predominantly employed by them--immigrants, the under-educated and under-employed and even felons--and how these businesses have successfully served as a gateway out of poverty for many low-income families.


And by the way, many people don't realize this situation has also been a death knoll for countless arts and cultural groups, who have also been really affected by astronomical rents and rent increases.


Although probably about fifteen years too late to be truly effective, activists see the SBJSA as the only real way not only to save these NYC institutions, but also thousands of jobs. 

However, the chair of the Council's Small Business Committee thinks the answer is to have Albany subsidize landlords to not rent-gouge. Only in New York....  

But this plan has some key flaws. First, it's voluntary. Second, it relies on state action--not exactly a sure thing. It would not stop the extortion. Lastly, his idea would give landlords who have commercial tenants property tax subsidies, but apparently ignores the fact that most owners pass those taxes on to their tenants.


And, make no mistake--the fight has been and remains a real uphill battle. They are facing off against a litany of obstacles which include:
1-the power of big real estate;
2-the increasing suburbanization and homogeneity of NYC.

Small business advocates have little faith in the city's official representatives of their community, especially the agency for Small Business Services (SBS) and Business Improvement Districts (BIDS). That is critically important to understand how things have gotten so bad


BIDS are predominantly comprised of banks and property owners, who have a very different agenda than do commercial tenants. In fact, governing laws of BIDS mandate the majority of board members must be landlords. It's a blatant conflict of interest. So is the fact that SBS pushes its various loan programs with some of the very same lenders who sit on BIDS. 


Plus, banks themselves play a giant part in destabilizing neighborhoods because they considerably skew the rental curve upwards. Banks are willing to pay a lot more in rent so that most other tenants are simply priced out of the equation, and many landlords are singularly concerned with obtaining premium rents--not the character of a community or its needs.


And SBS is teaming with former employees from assorted BIDS and pro-development entities like the city's Economic Development Corporation or the state equivalent, Empire State Development. Both have been historically unfriendly to small businesses, particularly if large scale development projects are involved. Quite a few at SBS are Bloomberg-holdovers. 


In fact, of the executive staff listed on its website, I know of only one person with any direct experience owning a small business--and I know about that person from when I was writing my article. It's not even listed in her bio.


This point cannot be dismissed, though SBS staff have and do. Can you imagine say, the Transportation or Environmental Protection departments with almost no leadership having a background in those given fields? It would be completely unacceptable--so why is it permitted at SBS?


Well, one main explanation is the power of the financial and real estate sectors. They don't want to see the SBSJA passed because it would change the unfettered ability to speculate. It's in their best interest to keep SBS out of the hands of people who actually know something about owning or running a small business.


Interestingly, Council Member Bill de Blasio was an adamant supporter of the bill as a means to fight economic inequality--which as we all know, was a giant campaign theme for him in the mayor's race. It was actually former Council Speakers Vallone and Quinn who did everything in their power to quash it. Guess why? 

However, Public Advocate, mayoral candidate and now Mayor de Blasio all but ignored his own argument, eventually towing the popular status quo line that fines, fees and regulations are the biggest obstacles currently facing small businesses.


Certainly, these are sometimes significant issues, but it's the difference between problems versus complaints. Business owners complain about fees and fines, but realistically, they don't generally close down because of them. They do, however, close because of the epidemic of small businesses being unable to afford leases or aren't even given the option of renewing--that's a true problem.  At this rate, there will be no surviving independent small business left.

It's highly peculiar that for all of the divisions and programs at SBS, there's no emphasis on job retention, nor has it been something the mayor has made a priority. Job creation and training, sure. And the SBS will tell you that it offers pro bono legal advice to help commercial tenants but again, if these tenants have no rights to begin with, what good is any kind of legal advise? And this program is especially galling, in the face of what can only be construed now as willful inaction.


There's also an odd disconnect within the administration. The excellent commissioner for the Human Resources Administration, Steve Banks, told NY1 in an interview last year that their data analysis revealed a quarter of "clients" (nice Orwellian euphemism from the Rudy/Bloomberg days) who had utilized some kind of city employment program returned to the agency for assistance within a year. Banks said that given the $200 million spent on employment programs, "We need better results for people, we need programs that work." So clearly, as early as a few months into the de Blasio administration, they knew what existed was not solving the problems, with the ultimate goal of helping people out of poverty.

The NY1 anchor had enough wherewithal to follow up the line of thinking by asking what good job training is if there are no jobs to fill? But he didn't take that thought further in asking why aren't there the jobs, other than to recite the obvious post-recession explanation.

For what it's worth, Banks' job focuses on the social needs of the city, and doesn't include land use and development. In the NYC of the 21st century, these somehow appear to be mutually exclusive and distinct areas.


As one activist emailed me, how much of the answer rests with the "anti-small business /pro-real estate policy" of the mayor and "progressive" Council Speaker. Speaker Mark-Viverito can't be absolved, given the role the Council has played over the years to not pass this bill, and because there is no evidence she is doing anything differently. (It would be very interesting to see how many members of the Council's central staff--particularly in areas like the newly created Development/Land Use Unit--either previously worked for or left the Council's employ to work for a developer/real estate entity. I made two formal requests to the Council's press office regarding the unit's employees and their professional backgrounds, but was seemingly ignored.)

"Does NYC have a jobs crisis with the closing of all our small businesses? Does NYC have a wage crisis, with businesses unable to pay fair wages due to paying exorbitant rents?" the activist asked. In actuality, the email read, there are three crises going on simultaneously--the closings, the job losses, "and stagnant wages at the same time as sky high prices caused by exorbitant rents. Yet, no mention of any crisis by our government. That is Bloomberg 100%." 


The data appears to bear out this sentiment. Commercial evictions during this administration remain on par with the two previous. Updated data from Landlord and Tenant Court for all five counties obtained by the Small Business Congress (SBC) to include 2014 reveals the average monthly number of eviction warrants issued was 485 in 2012, 499 in 2013, and 491 for 2014 (up to August). 


Extrapolating from this data, the SBC estimates this translates into 900-1200 closings per month, and thousands of jobs lost. As I wrote last year, these numbers tend to be lower than the actual numbers because they don't include the businesses who just walked away without a fight.  


For many years now, I've said the beauty of this city was always that anyone could come here and adapt to the energies of what used to make it so unique. But since Giuliani decided to become the 'Mayor of Niketown' (as expressed by the genius of Fran Lebowitz) and his push to make the city "family-friendly" at the expense of everything else, our once incomparable home is now a place where suburbanites come and expect it to change for them, conditioned by tv shows like "Sex and he City" and musicals like "Rent," all in an effort to give their sheltered little lives some glamour and excitement. 


These people are comforted by suburban norms like the chain stores that populate their insulated existences--how else can you explain Domino Pizza's presence here? Many insist on having a car--even in Manhattan--when we have one of the world's best mass transit systems (if you aren't disabled).


Frankly, the New York New York Hotel Casino in Las Vegas has more authenticity than does this current version of the city.


In what really is the last ditch effort to keep long-established businesses around, the SBC will be holding a series of forums in each borough, and have sponsored a petition urging the mayor, speaker and council members to support the SBJSA. This is the link. All but two Manhattan members have signed on--the two representing the mid and UES.


And here is information for the first community forum, to be held in Manhattan on Thursday 3/5:



A Community Forum

Solutions to Save Small Businesses,
Art and Cultural Institutions5  7-9 PM


Judson Memorial Church


 55 Washington Square South


New York, New York 


Sponsored by:  The Villager and
Village Independent Democrats


Join your neighbors, local business people, and a panel of experts to discuss how we can save and protect the small businesses that are the lifeblood of our community and our city.  Landlords now have all the rights that determine the destiny of owners, their workers, and the character and culture of an entire community. 

Because the gateway to the American Dream has been locked, and government has given the key freely given to big Real Estate…let’s throw a life line and empower our struggling small businesses drowning in a sea of greed.


Two opposite pending legislations claiming to be the solution to save our small businesses are at City Hall and in Albany : 


One, a new resolution was introduced at City Hall calling upon Albany to pass legislation establishing a property tax credit for commercial landlords who ”voluntarily” limit rent increases upon renewal - incentives to not rent gouge.


The other in Council committee: the Small Business Jobs Survival Act, (S.B.J.S.A.). regulates lease renewal process giving rights to business owners to arbitrate fair lease terms and 10 year leases.


Which is the best solution?  Or is there a better solution? 


Let your voice be heard on taking real action to save our businesses, art  community, neighborhood’s identity, middle class and jobs. 



Log onto The Villager or VID website for more details.
*Note: It should be acknowledged The Villager has had a controversial relationship with former Speaker Quinn in the past. 

UPDATE: PA JAMES IS A SPONSOR, NOT PRIME SPONSOR.
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Coming soon: A Tale of One City, Part 2