Res. No. 1497
Resolution calling upon the New York State Legislature to pass, and the Governor to approve, legislation that will change the Rent Stabilization Law to require owners to maintain all units in the Rent Stabilization system when the owner of a building in which they are located is participating in the J-51 program.
By Council Members Garodnick, Brewer, Jackson, James, Palma, Seabrook, Mark-Viverito and Gerson
Whereas, There is currently a severe shortage of affordable housing in the City of New York; and
Whereas, According to the 2005 New York City Housing and Vacancy Survey (HVS), the citywide vacancy rate for rental apartments was only 3.09 percent; and
Whereas, The low vacancy rate is an indication of the City’s affordable housing crisis; and
Whereas, The City has for some time seen losses in its stock of affordable housing due to withdrawals from the Mitchell-Lama, project-based Section 8 and other affordable housing programs; and
Whereas, These circumstances have been substantially worsened by the loss of rent-regulated housing as a result of changes imposed by the State Legislature over the past decade; and
Whereas, The J-51 tax incentive program, authorized by Section 489 of the Real Property Tax Law, provides owners of residential property with tax incentives to rehabilitate their buildings; and
Whereas, According to Section 11-243 of the Administrative Code of the City of
New York, in order to receive J-51 benefits, apartments in a building receiving the benefits are made subject to the provisions of the Rent Stabilization program; and
Whereas, The Rent Stabilization program is one method of maintaining affordable housing by providing a tenant with rights to a renewal lease and regulated rent increases; and
Whereas, An owner may participate in the J-51 program and receive real property tax benefits although the building for which the benefits are conferred is already subject to the requirements of the Rent Stabilization system; and
Whereas, When a building is availing itself of a tax benefit from the City, it should not simultaneously be allowed to take its units out of the rent stabilization system; and
Whereas, In a recent decision in New York State Supreme Court (Roberts v. Tishman Speyer Properties), the court determined that an owner may remove a unit from the Rent Stabilization system while enrolled in the J-51 program if any of the various thresholds for deregulation of a unit was reached where the apartment was rent stabilized before the owner enrolled in the J-51 program, although apartments that became subject to Rent Stabilization only because J-51 benefits were received could not be deregulated; and
Whereas, The deregulation of affordable units in buildings receiving J-51 benefits creates an additional loss of affordable housing; and
Whereas, The loss of those affordable units may result in the displacement of low and middle-income New Yorkers, will severely disrupt their lives and may also severely disrupt the life of the communities where those units are located; and
Whereas, At a time when the City is hemorrhaging affordable housing, New York State must ensure that this affordable housing crisis ends and is not exacerbated by allowing any affordable apartments in buildings receiving J-51 benefits to become deregulated; and
Whereas, By amending the Rent Stabilization Law to prohibit owners from removing rent stabilized units from that regulatory program while receiving J-51 benefits, the State will make it easier for the City to survive this affordable housing crisis and perhaps avert affordable housing crises in the future; now, therefore, be it
Resolved, That the Council of the City of New York calls upon the New York State Legislature to pass, and the Governor to approve, legislation that will change the Rent Stabilization Law to require owners to maintain all units in the Rent Stabilization system when the owner of a building in which they are located is participating in the J-51 program.
LS# 4338
BJG
2/14/08