March 23_ 2011 Michael Skrebutenas President Office of Housing by liuqingyan

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									March 23, 2011

Michael Skrebutenas
President
Office of Housing Preservation
NYS Homes and Community Renewal
Hampton Plaza
38-40 State Street
Albany, NY 12207

Dear President Skrebutenas:

As representatives at all levels of government, we write to you regarding an important issue of
affordable housing – namely, the calculation of rents in buildings that illegally deregulated units
while receiving the J51 tax abatement. It is our understanding that you are presently considering
this question in connection with the rents at Stuyvesant Town and Peter Cooper Village. 1 The
implications of your recommendations, however, will be felt Citywide.

There are over one million apartments covered by rent regulations in New York, representing
roughly half of all our rental units. Rent regulation ensures that tenants are charged a reasonable
rent and, just as importantly, protects them from arbitrary eviction. Unfortunately, the
weakening of the housing laws resulted in the loss of an estimated 300,000 regulated units in
New York City and the surrounding counties between 1994 and 2010. The Office of Housing
Preservation at NYS Homes and Community Renewal (HCR) has estimated that some 40,000
units will be affected by the outcome of the Roberts v. Tishman Speyer case.

As you know, the New York Court of Appeals held in Roberts that landlords are not permitted to
take units out of the rent stabilization system while receiving the J51 tax abatement. While it is
now the responsibility of HCR to advise the court on the current legal rent for these units,
however you calculate the formula, HCR must not allow landlords to benefit from their illegal
circumvention of the rent regulation laws. This is key for the long-term affordability of these
units, and is consistent with what the Legislature intended in creating the J51 tax abatement
program.

Of course, we expect that building owners and operators will propose to you a formula that will
give them the benefit of each type of rent increase since the date the apartment was illegally
destabilized. Allowing landlords every conceivable increase has no basis in current law, is
inconsistent with the intent of our legislative bodies, and would essentially reward owners for the
improper deregulation of units. Under no circumstances, for example, should owners be allowed
to take multiple vacancy increases for a wrongly deregulated apartment. By way of example – in
Stuyvesant Town and Peter Cooper Village, by deregulating and escalating rents annually by up
to 30% or more, the owners created an artificially high turnover rate. We are advised that the

1
    Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270 (2009). See Order of Referral to HCR, January 18, 2011.
Michael Skrebutenas                                                                                 Page 2 of 5
March 23, 2011

vacancy rate was five times what it was for the same apartments before they were deregulated –
averaging one vacancy per market tenant every two years compared to one every ten years for
stabilized tenants.

New York courts have consistently held that in order to deter violation of rent regulations,
landlords cannot be permitted to retain any benefits they received as a result of evading the law,
whether this was done purposefully or not.2 HCR therefore must ensure that landlords refund all
the money they improperly received from tenants and that, as legal regulated rents are
reestablished, landlords are not allowed to charge more than they would have if their units had
remained continuously subject to rent regulation.

The future of 4,400 apartments in the Roberts case is immediately before your agency, but
HCR’s suggested formula in this instance will surely be used as precedent for future cases.
HCR’s response to the court is crucial to ensuring the fairness and integrity of the system. We
look forward to working with you to make certain that this process is carried out fairly and
efficiently.

If you would like further information or input from us on this matter, please feel free to contact
Assemblymember Kavanagh, Council Member Garodnick, Senator Duane or any of the
undersigned.

Sincerely,



Brian Kavanagh                    Daniel R. Garodnick                Thomas K. Duane
State Assemblymember              City Council Member                State Senator




Daniel L. Squadron                Hakeem Jeffries                    Linda B. Rosenthal
State Senator                     State Assemblymember               State Assemblymember



Carolyn Maloney                   Jerrold Nadler                     Nydia Velazquez
U.S. Congressmember               U.S. Congressmember                U.S. Congressmember



Bill de Blasio                    Scott Stringer
Public Advocate                   Manhattan Borough President




2
  See, for example, In re Berry Estates, Inc., 812 F2d 67 (2d Cir. 1987), Estro Chemical Co. v. Falk, 303 N.Y. 83
(1951), Constantino v. Lynch, 163 Misc. 2d 924 (Sup. Ct. N.Y. Co. 1995).
Michael Skrebutenas                                                      Page 3 of 5
March 23, 2011




Eric Adams              Joseph P. Addabbo, Jr.    Tony Avella
State Senator           State Senator             State Senator



Ruben Diaz, Sr.         Martin Malavé Dilan       Adriano Espaillat
State Senator           State Senator             State Senator



Ruth Hassell-Thompson   Shirley L. Huntley        Liz Krueger
State Senator           State Senator             State Senator



Carl Kruger             Velmanette Montgomery     Kevin S. Parker
State Senator           State Senator             State Senator



Bill Perkins            Diane J. Savino           Jose M. Serrano
State Senator           State Senator             State Senator



Toby Ann Stavisky       Carmen E. Arroyo          Inez D. Barron
State Senator           State Assemblymember      State Assemblymember



Alec Brook-Krasny       William F. Boyland, Jr.   Karim Camara
State Assemblymember    State Assemblymember      State Assemblymember



Nelson L. Castro        William Colton            Vivian E. Cook
State Assemblymember    State Assemblymember      State Assemblymember



Marcos Crespo           Michael G. DenDekker      Jeffrey Dinowitz
State Assemblymember    State Assemblymember      State Assemblymember
Michael Skrebutenas                                                  Page 4 of 5
March 23, 2011




Vanessa L. Gibson      Deborah J. Glick       Richard N. Gottfried
State Assemblymember   State Assemblymember   State Assemblymember



Carl E. Heastie        Andrew Hevesi          Rhoda S. Jacobs
State Assemblymember   State Assemblymember   State Assemblymember



Micah Kellner          Rory I. Lancman        Guillermo Linares
State Assemblymember   State Assemblymember   State Assemblymember



Alan Maisel            Margaret M. Markey     Michael Miller
State Assemblymember   State Assemblymember   State Assemblymember



Joan L. Millman        Francisco Moya         Daniel J. O’Donnell
State Assemblymember   State Assemblymember   State Assemblymember



Felix Ortiz            N. Nick Perry          Jose Rivera
State Assemblymember   State Assemblymember   State Assemblymember



Naomi Rivera           Annette Robinson       Robert Rodriguez
State Assemblymember   State Assemblymember   State Assemblymember



William Scarborough    Aravella Simotas       Matthew Titone
State Assemblymember   State Assemblymember   State Assemblymember



David Weprin           Keith L.T. Wright      Charles Barron
State Assemblymember   State Assemblymember   City Council Member
Michael Skrebutenas                                                 Page 5 of 5
March 23, 2011




Gale A. Brewer        Margaret Chin           Inez E. Dickens
City Council Member   City Council Member     City Council Member



Helen Diane Foster    G. Oliver Koppell       Brad Lander
City Council Member   City Council Member     City Council Member



Robert Jackson        Letitia James           Rosie Mendez
City Council Member   City Council Member     City Council Member



Ydanis Rodriguez      Melissa Mark-Viverito   Jumaane D. Williams
City Council Member   City Council Member     City Council Member

								
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