Expiration of rent laws a political hot potato juggled by de Blasio, state legislators, and nonprofit groups

At the #1MillionHomes rally at Foley Square on May 14, 2015, activists demanded a strengthening of rent laws.  Source :  Louis Flores

At the #1MillionHomes rally at Foley Square on May 14, 2015, activists demanded a strengthening of rent laws.  Source :  Louis Flores

By LOUIS FLORES

Behind the News, WBAI-FM, June 17, 2015.  Host Nellie Hester Bailey.  With John Fisher, David Tieu, and Sam Anderson, discussing renewal of New York City rent laws, overdevelopment, gentrification, education, and corrupt New York politics.  (Source :  zyzoffq/YouTube)

As negotiations to restore New York City’s expired rent stabilization laws have ground to a halt up in Albany, Mayor Bill de Blasio (D-New York City) has been using crisis language to escalate political pressure on state legislators into action.

Even though the de Blasio administration is composed of former Albany officials, has close ties to Albany officials, and employs political operatives who double as Albany lobbyists on behalf of the mayor’s municipal agenda, Mayor de Blasio has blamed the expiration of the rent laws on Albany officials, saying, in part, that, “if Albany does literally nothing, then there’s a real nightmare coming.”

The rent laws expired at midnight on June 15 with no outline of steps by state legislators or Governor Andrew Cuomo (D-New York) to restore the rent laws.

Even as Mayor de Blasio has blamed Albany for failing to timely renew the city’s rent laws, he has been criticized for engaging in “fear mongering” -- by scaring tenants into thinking that the temporary lapse in the rent laws would create a short-term crisis for tenants.

What is more, Albany’s rejection of New York City’s rent laws flies in the face of promises by the de Blasio administration that it had developed insider relations with Albany.

Before he was sworn into office, then Mayor-elect de Blasio had announced that he would be appointing Dean Fuleihan as his municipal budget director.  Mr. Fuleihan had previously served as a top budget adviser to former State Assembly Speaker Sheldon Silver (D-Lower East Side).  In total, Mr. Fuleihan had served over 30 years in Albany, and his appointment was touted as an advantage for the then-still forming de Blasio administration.

“There’s no question in my mind that Dean Fuleihan will be an extraordinary asset :  literally no one more knowledgeable about how Albany works, no one more knowledgeable about how budgeting works,” Mayor-elect de Blasio said at the time of the announcement, according to a report published by The New York Post, adding about Mr. Fuleihan that, “He is the gold standard.”

But with all of Mr. Fuleihan’s insider knowledge and contacts up in Albany, Mr. Fuleihan was unable to deliver on Mayor de Blasio’s 2014 proposal for a tax hike on the wealthy to pay for his plans to expand pre-kinder.  And, as seen this year, Mr. Fuleihan was unable to deliver on either of Mayor de Blasio’s push to pass a reformed 421-a tax abatement program to pay for Mayor de Blasio’s affordable housing plans or on Mayor de Blasio’s calls for the renewal of the city’s rent laws.

Of course, Mr. Fuleihan’s insider track to Albany hinged on his close relationship to Assemblymember Silver, a connection that Mr. Fuleihan was unable to exploit in 2014 before Assemblymember Silver was arrested in January 2015 on federal corruption charges and forced to step down from his leadership post at the State Assembly, a shocking political miscalculation by Mayor de Blasio and his advisers on the political assets the administration would be able to activate up in Albany.

Mayor de Blasio has also twice very publicly deployed his chief political strategist, Emma Wolfe, to manage the mayor’s intermediations up in Albany, the first for the mayor’s effort in flipping the State Senate into Democratic Party control and, more recently, on his administration’s lobbying effort to press Albany officials to renew the rent laws, the first, which ended in disaster, and the second, which is heading in a similar direction.

Through Ms. Wolfe’s lobbying, Mayor de Blasio played a key role in supporting Assemblymember Carl Heastie (D-The Bronx), the former Bronx Democratic Party Committee Chairman, to replace Assemblymember Silver as the Assembly speaker.  However, Speaker Heastie has thus far proved himself to be politically impotent, unable to coördinate with the State Senate a renewal of the city’s rent laws.

With Mayor de Blasio’s political machinations thus far proving failures, Progress Queens attempted to reach out to the de Blasio administration’s key housing officials for this article to assess the political ramifications on the city’s housing agenda.

A request was made by Progress Queens to interview either Alicia Glen, the deputy mayor for housing, or Vicki Been, the commissioner for the city Department of Housing Preservation and Development.  However, in keeping to its practice of a media blackout on Progress Queens, the press office for City Hall refused to answer the request.

Certainly, Mayor de Blasio and his administration officials have no direct say in how the state legislature can vote.  Yet, the de Blasio administration can and has been able to exert indirect influence on state officials by virtue of his leadership over a municipal boss system that extends into key nonprofit organizations, which, in turn, can, by proxy, flex their own influence over state officials.  This process comes and has come with consequences, given that nonprofit groups must suppress their autonomy to the mayor.

Moreover, because Mayor de Blasio is now focused on his 2017 reëlection efforts, much of his municipal agenda is now guided by that focus, which is not necessarily the best for the electorate, in particular for tenants.

Telegraphing a standing down

For example, once Mayor de Blasio announced that he wanted to modify the 421-a tax abatement program to support the achievement of his affordable housing goals, the announcement acted to telegraph to his political supporters in key advocacy nonprofit groups that if the groups continued to deploy resources to work to end the 421-a tax abatement program, such work would put the groups in direct opposition to one of the de Blasio administration's principal policy goals :  the building or preserving of more affordable housing units. 

Key advocacy nonprofit groups stopped holding protests against 421-a, like they did last February outside One57, the Extell luxury condominium tower, with a specific demand to end the 421-a tax abatement program, and, instead, began holding demonstrations like they did last May in which the advocacy groups rallied at Foley Square before marching across the Brooklyn Bridge, demanding a strengthening of rent laws, evidencing this shift.

Time and again, tenants have seen key advocacy nonprofit groups genuflect before the mayor after he has announced policy positions that are in contravention to the missions of the advocacy groups.  The de Blasio administration has sold Section 8 buildings to a consortium of real estate developers without any backlash from the major tenant advocacy groups.  As reported by Progress Queens, some of these Section 8 buildings were refurbished prior to their sale, contrary to claims by the de Blasio administration that the Secion 8 buildings were too dilapidated to be maintained by the New York City Housing Authority, or NYCHA, which should have raised concerns amongst advocacy groups.  However, no advocacy group has complained about the sale of refurbished Section 8 buildings to developers under distressed circumstances.

Additionally, the de Blasio administration has announced the planned further sale of NYCHA playgrounds and other undeveloped NYCHA lots to real estate developers without any political backlash from the major tenant advocacy groups. 

The mayor knew that after he announced his reliance on a proposed modified 421-a tax abatement program, key advocacy groups would scale back their deployment of resources to defeat his proposal, because that is what he expected and that is precisely what has been seen.

The manipulation by the de Blasio administration of key nonprofit groups is a detriment to communities supposedly served by those nonprofit groups, because under the New York City model of activism, much of community advocacy is undertaken by nonprofit community groups.  That such groups would be willing to deliberately de-escalate calls for government reform serves as both a warning about the efficacy of such a model of advocacy and a possible explanation for why long-term community issues are never fully resolved.  

After Mayor de Blasio announced his support for a modified 421-a program and after some groups quietly ended the deployment of any resources to defeat the tax abatement program, the de facto policy of key nonprofit tenant advocacy groups became the indirect support of a $1.1 billion tax break program beneficial to developers and landlords, creating a political vacuum that allowed Mayor de Blasio to proceed these last few weeks with his proposal for a modified 421-a tax abatement program, that is until Governor Cuomo pulled the brakes.

On condition of anonymity, one grassroots government reform activist told Progress Queens that the activist believed that Mayor de Blasio went public with his modified 421-a tax break proposal as part of his affordable housing program only because he beat Governor Cuomo to broker such a deal with the Real Estate Board of New York, or REBNY.  Either through Mayor de Blasio or Governor Cuomo, REBNY was going to try to salvage the valuable tax breaks.  It was just a matter of which elected official could curry favor with powerful developers and landlords, first, and, this time, it turned out to be Mayor de Blasio.

As shown, the organized tenant lobby did not challenge Mayor de Blasio’s embrace of a trickle-down economics proposal for affordable housing, as many have characterized his modified 421-a proposal, even though just weeks before Mayor de Blasio’s announcement of a modified 421-a plan, the key nonprofit tenant advocacy groups had been demonstrating against the tax breaks.  The sudden flip-flop by the organized tenant lobby showed how much influence Mayor de Blasio is capable of exerting over them.

Furthermore, as mentioned by WHCR 90.3 FM radio talk show host Nellie Bailey during an interview with tenant organizer Alicia Boyd, the organized tenant lobby in New York City has not confronted Mayor de Blasio’s massive, city-wide upzoning program announced during his state of the city speech in February.  Ms. Biley noted that the organized tenant lobby has neglected to address the primary and secondary displacement to be caused by Mayor de Blasio’s plans for gentrification

As was said, in part, by Ms. Boyd, the housing activist, “A lot of the tenant movement is controlled by nonprofit organizations that get their funding … from political entities and private entities, and they are told to stay away from the rezoning.”

Ms. Boyd later added that politicians are able to get key nonprofit supporters T.V. time and other exposure.  Because of this dependence on politicians, key nonprofits don’t forcefully press politicians on behalf of tenants.

One result of this political dysfunction, Ms. Boyd said, is that legislators don’t accept responsibility for the ineffective tenant protection laws, which they pass.  Instead, legislators lay blame at the feet of Governor Cuomo, whom Ms. Bailey, the radio host, agreed, made a convenient villain.

“You actually have politicians organizing demonstrations,” Ms. Boyd said, adding that, “You have them leading the chants, but they are the ones also going behind closed doors and making these deals and they are also the ones creating these laws that will further the real estate industry to do what it is that they are currently doing.  So, the tenant movement is not making our local politicians accountable.”

(One example of such a politician, not named by Ms. Boyd, is Assemblymember Keith Wright (D-Harlem), the chair of the Assembly committee on housing, who, in 2013, sponsored a bill that grandfathered the $2 billion luxury condominium tower known as One57 into the 421-a tax abatement program to benefit its developer, Extell Development Company, according to an article published in The New York Daily News.

Assemblymember Wright appeared at a May rally calling for stronger rent laws, but not once did Assemblymember Wright commit to ending the controversial 421-a tax breaks program.

This is what Ms. Boyd meant by legislators abdicating any responsibility for their gross failure in leadership while, at the same time, being allowed to speak as tenant champions at events organized by the organized tenant lobby.)

Ms. Boyd added that Mayor de Blasio’s massive rezoning plan will instantaneously benefit developers and landlords, saying, in part, “It makes millions of dollars for landowners.  I mean, just with the stroke of a pen, you can take a piece of property that was once $50 a square foot and make it $500 a square foot.  So, there’s a lot of pressure put onto the local politicians and the local organizations, and they are told : ‘Stay away from rezoning.  Don’t touch the rezoning.’ ”

Ms. Bailey, the radio host, separately raised concerns that eminent domain abuse may factor into Mayor de Blasio’s massive rezoning plans.

Ms. Bailey further noted the duplicity by elected officials, who have stirred up the “hysteria” over the temporary lapse in rent laws.  These are the same elected officials, who, Ms. Bailey said, voted to support Mayor de Blasio’s rezoning plans.  The mayor’s political supports duplicitously issued statements calling for the renewal of rent laws, yet the same officials have supported Mayor de Blasio’s rezoning plans, which are detrimental to tenants due to gentrification and primary and secondary displacement. 

What can Mayor de Blasio do about rent laws ?

Some grassroots tenant activists recall that the organized tenant lobby was counting on using the possibility of the state legislature’s renewal of the 421-a tax abatement program as a negotiating tactic to force the renewal or strengthening of rent laws, as tenant advocate Michael McKee has stated publicly, when he said that he viewed opposition to the 421-a tax abatement program as mere leverage to presumably negotiate a renewal of rent control laws.

However, if tenant activists want to see a permanent end to the controversial tax breaks program, which has become the subject of a reported federal criminal investigation led by U.S. Attorney Preet Bharara, the nation’s top federal prosecutor in New York’s southern district, then tenant activists have to find some other pressure point to leverage against wealthy developers-landlords.

One possible leverage that Mayor de Blasio could exert over wealthy developers-landlords would be to use his office as a platform to ask the public to call on the Rent Guidelines Board to issue a substantial rent roll-back when it votes on June 24 for changes to rent rates.  An argument could be made that if Albany cannot be counted on to look after the best interests of rent stabilized tenants, then the Rent Guidelines Board should be pressed to grant tenants significant compensation for the lack of legislative support up in Albany.

One notable tenant activist privately told Progress Queens that this proposed approach may be problematic on two fronts. 

Firstly, since the rent laws have expired, the Rent Guidelines Board may have no legal standing to rule on any theoretical rent roll-back or rent increase on June 24, the date of a hearing at which the board will vote for its final decision.

Secondly, Mayor de Blasio is not supposed to overtly control the votes of his appointees to the Rent Guidelines Board, because once Mayor de Blasio has made his appointments, the appointees are expected to act independently.  However, most mayors have been able to engineer desired outcomes from the Rent Guidelines Board by lobbying their own appointees. 

A third problem, not mentioned by the tenant activist, may exist, in that Mayor de Blasio has close ties to real estate industry.  Some well-known executives, such as Rob Speyer, William Rudin, Douglas Durst, and Carl Weisbroad, as well as the real estate lobbyists James Capalino and Jonathan Rosen, either advise the mayor or serve or have served in capacities beneficial to the mayor in connection with either the mayor’s campaign, civic, or official entities, creating a conflict of interest for the mayor.

As reported by NY1, Mayor de Blasio had said that he would push for an end to the 421-a tax abatement program if Albany did not strengthen the rent laws.  However, Mayor de Blasio has not said whether he would seek considerable tenant benefits from the Rent Guidelines Board as a negotiating tactic to compel developers-landlords to press the Republican Party-controlled State Senate to renew or strengthen rent laws.

Another thing that Mayor de Blasio can do is to stop interfering with the autonomy of the key nonprofit tenant advocacy groups and, instead, allow the organized tenant lobby to fully express their opposition to anti-tenant political targets, regardless of whether or not they would benefit Mayor de Blasio’s 2017 reëlection campaign. 

What can activists do ?

Grassroots tenant activists can continue to point out, as was said by Ms. Bailey, the WHCR radio host, that although Governor Cuomo has served as a convenient villain, other elected officials were being let off the hook for being responsible for the collapse in negotiations for the renewal of rent laws.

Activists could also point out that the prevailing wage demand made by construction workers' unions was a red herring, because the recipients of REBNY's members' substantial campaign donations, namely, Governor Cuomo and the state legislators, would never entertain such a give-back to construction workers' unions, particularly since the prevailing wage demand was opposed by REBNY.  And although Governor Cuomo did make nominal statements in support of the prevailing wage demand, it was just lip service on Governor Cuomo's part.  Indeed, not long after Governor Cuomo nominally supported the prevailing wage demand, he complained that last-minute demands have only acted to problematize the final weeks of the 421-a talks up in Albany such that the only outcome Governor Cuomo would naturally embrace would be a straight extender.  In reaching such a conclusion, Governor Cuomo was betraying his own words of support for the construction workers.  Essentially, Governor Cuomo was admitting that the raising of last-minute issues, like the construction workers’ demands for prevailing wages during a difficult negotiation process that included tenant advocates’ demands for strengthened rent laws, was a cynical tactic :  It guaranteed that a Charlie Foxtrot would result, giving one party an out, namely, to be able to unilaterally claim that negotiations had collapsed, which is what we have seen Governor Cuomo and state legislators claim right now. 

Notwithstanding the red herring that was the prevailing wage demand -- and no matter how reasonable it was viewed by union supporters -- it also acted to highlight that Mayor de Blasio would not support any modification to 421-a that would was found to be unacceptable to REBNY.

Activists should also expose and demand reforms of the organized tenant lobby.  Besides Mr. McKee, other group leaders have been shown to be conflicted about 421-a.

Benjamin Dulchin, the leader of the Association for Neighborhood and Housing Development, which is a member of the anti-421-a coalition named the Real Affordability for All campaign, has proposed renewing an amended 421-a tax abatement program, upending the united front needed by the key tenant advocacy groups if they had planned to successfully defeat the 421-a tax abatement program this year.

Besides key tenant advocacy groups, other nonprofit groups also subjugate themselves to Mayor de Blasio's political agenda.  For example, the inefficient 421-a tax abatement program costs New York City an estimated $1.1 billion in forgiven property taxes.  That money could otherwise be used for pressing municipal needs, like funding the capital improvement plan of the Metropolitan Transportation Authority, or the MTA.  When Progress Queens contacted three key public transportation advocacy nonprofit groups for comment about whether that $1.1 billion should be used to fund the MTA's capital improvement plan instead of to support the mayor's modified 421-a proposal, none of the three groups wanted to comment for this article.

Reference Document