Spitzer Takes Action to Preserve Affordable Housing

ALBANY, NY (07/16/2007)(readMedia)-- Governor Eliot Spitzer today reaffirmed his commitment to affordable housing by closing a regulatory loophole that would have allowed tens of thousands of rent stabilized apartments to be removed from the State's affordable housing portfolio.

“Maintaining and enhancing affordable housing is critical to the quality of life of New Yorkers and to the support of a growing economy,” Governor Spitzer said.

By closing the "unique and peculiar" loophole, Governor Spitzer has ensured that landlords leaving the Mitchell-Lama program, or other government-sponsored affordable housing programs, will not be allowed to immediately and drastically increase their rents to market rate.

The unique and peculiar provision allows landlords to apply for rent increases for apartments that have artificially low rents for "unique and peculiar" reasons. For example, if a landlord had a family member as a tenant, or a building manager who enjoyed a lower than normal rent as part of his compensation, the landlord could use the unique and peculiar clause to increase the apartment's rent when they were re-rented.

Some landlords, however, have tried to use the loophole in order to bring apartments leaving the Mitchell-Lama or other regulation programs immediately up to market rate. They have claimed that their decision to end their participation in Mitchell-Lama, or other government program, qualifies as unique and peculiar circumstances.

"Clearly, the unique and peculiar provision was not meant to be interpreted and used to remove stabilization safeguards from apartments leaving Mitchell Lama or other rent-regulation programs," Spitzer said.

Initially, the new regulations will apply to 24 applications that are currently pending before the State Division of Housing and Community Renewal (DHCR), which would have dramatically increased the rents of nearly 5,000 affordable apartments.

Deborah VanAmerongen, Commissioner of DHCR, said "If the Governor had not taken this action today, and closed the unique and peculiar loophole, it could have been used to remove tens of thousands of apartments from the affordable range in the coming years"

Dina Levy, director of Organizing and Policy for the Urban Homeownership Assistance Board (UHAB) said, "Some landlords have attempted to get around the rent stabilization laws by manipulating the so-called unique and peculiar loophole, attempting to saddle low and moderate income tenants with totally unreasonable and unfair rent increases. Governor Spitzer has done the right thing by closing the loophole and protecting the rights of thousands of tenants."

Bertha Lewis, executive director of NY Association of Community Organizations for Reform Now (ACORN) said “By closing this loophole, landlords will not be able to pull their buildings out of rent stabilization when leaving the Mitchell-Lama program in violation of New York's rent laws. We commend Governor Spitzer and Commissioner VanAmerongen for their leadership on behalf of Mitchell-Lama tenants."

Michael McKee, a founder of NYS Tenants and Neighbors Coalition, said "We are thankful to Governor Spitzer and Commissioner VanAmerongen for this policy decision, which will help tens of thousands of tenants in former Mitchell-Lama buildings sleep more soundly tonight."

Since taking office, Spitzer has taken significant steps toward preserving and enhancing the State's affordable housing stock.

Earlier this year, he proposed changes to the luxury decontrol statute, which was first established in 1993 to protect rent regulation for ordinary tenants while allowing for deregulation of high-rent "luxury" apartments occupied by the wealthiest New Yorkers.

"In the fourteen years since the luxury decontrol system was put in place, rents have risen dramatically while the decontrol threshold has not changed," Spitzer said. "Increasing the threshold from $2,000 to $2,800 will protect nearly 75,000 rent-stabilized units from decontrol in the short term and many more in the long term."

Spitzer has also instructed all agencies with a stake in affordable housing, including DHCR, the Department of Health, SONYMA, the Office of Mental Health and others, to better coordinate their efforts and work together in order to streamline the State's housing programs.

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