Jan 10, 2011

State Assembly May Tie Property-Tax Cap to City's Rent Rules

From the NY Times
Nathaniel Brooks for The New York Times
Sheldon Silver, the assembly speaker, in the chamber in Albany last week.

ALBANY — Democratic leaders in the State Assembly are signaling that they are ready to embrace a cap on local property taxes, which could clear the way for its passage this year.
The cap, popular with voters in New York’s suburbs, who pay some of the highest property taxes in the nation, is one of Gov. Andrew M. Cuomo’s top priorities and already has support from the Republican-led State Senate.
But in what will very likely be one of the defining legislative battles of the year, Assembly leaders are indicating they want something else for their mostly urban constituents: stricter rent regulations for New York City, a measure strongly opposed by Republicans and the real estate interests that helped Mr. Cuomo capture the governor’s office in November.

“In a day and age when we’re talking about giving people the ability to live in their homes and not be priced out of their homes, we should not forget people who have rent protections,” the Assembly speaker, Sheldon Silver, said, adding, “I just think the philosophy behind the tax cap is the same as the philosophy behind rent regulation.”
Mr. Silver, a Manhattan Democrat, played down the idea that he was seeking to link the two proposals directly. But Assemblyman Vito J. Lopez of Brooklyn, chairman of the Committee on Housing and an ally of Mr. Silver, made clear they were connected. “The Republicans want property-tax breaks, and we want that, too,” Mr. Lopez said. “But if it’s tied to rent regulations that impact a million people, to me that’s a very logical option, and I believe the overwhelming number of people in our conference would support that.”
Indeed, Mr. Lopez and other senior Assembly Democrats are already paving the way for a kind of bargain, which could include extending an expired tax break, known as 421-A, avidly sought by New York real estate developers.
The proposed linking of the two issues in the Assembly was first reported on Sunday in The Daily News.
The position taken by Mr. Silver and other Assembly leaders is significant, because the Assembly has in recent years been the place in Albany where proposals to cap property taxes meet a quiet death. His Democratic caucus is dominated by New York City lawmakers whose constituents often do not own homes, and Mr. Silver is tightly allied with public employees’ unions worried over the cuts to local government spending that caps would require.
The Assembly is also a bastion of support for expanded rent regulations and has passed a package of such legislation several times in recent years — proposals that have gone nowhere in the Senate, even during the last two years, when it was controlled by Democrats.
Mr. Lopez said his committee was moving fast on an ambitious package of rent legislation, including a bill to abolish vacancy decontrol, a procedure that has allowed owners of rent-regulated apartments to move hundreds of thousands of units out of the rent-stabilization system, according to estimates by tenant advocates. He also said he hoped to pass a temporary extension of the tax break that would expire on the same day in June as the existing rent regulations.
“Those three issues have to be looked at and somehow thought of in an interrelated way,” Mr. Lopez said.
About one million apartments in the city’s five boroughs, roughly half of all rental units, are covered by the existing laws, which sharply limit landlords’ ability to raise rents and keep many apartments, particularly in Manhattan, renting at well below market value. Currently, apartments become deregulated when the rent reaches $2,000 and total household income of the tenants is at least $175,000 annually for two years.
Mr. Silver said he would like not only to preserve those protections, but also to expand them, by raising the income and rent thresholds.
“You want to preserve people making $210,000, $225,000 a year, living where they’re living,” Mr. Silver said.
One model could be a bill that has passed the Assembly twice in recent years: It would raise the thresholds for so-called high-income decontrol to $2,700 in monthly rent and $240,000 in annual income.
Mr. Cuomo has so far avoided taking a clear stand on the issue. The governor’s 273-page “Urban Agenda” extensively discussed affordable housing but did not mention rent regulation, effectively New York’s largest program of housing subsidies.
In a statement, Josh Vlasto, a Cuomo spokesman, said, “Our policy on rent control has always promoted and must continue to promote the dual goals of providing stability in the rental housing market while also offering necessary protections to the millions of New Yorkers who live in rent-regulated apartments.”
But the notion of a three-issue deal was quickly criticized by real estate leaders, who argued that property-tax caps and rent regulation should be considered separately.
“That’s unacceptable to us; the cap on property taxes doesn’t apply to people in New York City,” said Steven Spinola, the president of the Real Estate Board of New York. “The game of the Legislature is to negotiate and to make connections, and that’s traditionally what Albany and Washington have done. We saw nothing happen in Washington because of that policy, and I’m not sure anything gets accomplished in New York.”
Scott Reif, a spokesman for the Senate majority leader, Dean G. Skelos of Long Island, declined to comment on the Assembly’s proposed rent regulation package, though Republicans have tended to oppose such measures. But he joined Mr. Spinola in arguing that a property tax cap should in no way be linked to rent regulation.
“The property-tax cap should stand on its own,” Mr. Reif said. “It was a centerpiece of the new governor’s agenda. There are many members on both sides of the aisle who ran in support of a property-tax cap. So we should get a result.”
Much could turn on whether Assembly Democrats are able to split apart the real estate lobby, one of the most powerful and well financed in New York. While the city’s large real estate developers, represented by Mr. Spinola, have generally worked closely in Albany with owners of rent-regulated apartments, they may put a higher priority on continuing the 421-A tax break than on paring back rent regulations.

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