RSA conference changes attitudes

Real Estate Weekly, Feb 16, 1994 by Lois Weiss

What a difference a few hours can make. When Bronx Assemblyman George Friedman walked into the Rent Stabilization Association's Housing Conference, he was subjected to hoots and hollers from angry rental property owners for saying there was no need for a law requiring money be deposited in court.

"The judges can already do that," he said, adding, "you're not the only side of the story."

But after listening to owners' recount Housing Court horrors and explain cash flow problems, the Assemblyman said he could see where the depositing of money with the court could make a real difference.

When the conference was over, he encouraged RSA's president, Joseph Strasburg, to draft legislation that can be submitted in Albany to deal with the issue. Friedman noted, however, that in certain instances, the money would have to go back to tenants.

Now that's what direct contact with. a politician can do.

The RSA conference did that and more. When it was over, Strasburg said the message sent by city officials is that they are looking to encourage business in New York City, and that they consider the real estate industry to be a part of that business.

The one thing that can't pick up and leave New York is the real estate," said Deputy Mayor Peter Powers, who opened the morning program held at the New York Sheraton ballroom. He took the place of Mayor Rudolf Giuliani, who was monitoring snow removal efforts along with Sanitation CommisSioner Emily Lloyd. "Real estate is this place," added Powers.

Despite the storm, nearly 1,000 of the 1,200 registered owners turned up to hear the politicians put in the "hot seat."

Powers said the administration is committed to maintaining rental housing in private hands. That is a concern of Housing Preservation Commissioner Deborah Wright, who is troubled by the prospect of adding 8,000 Brooklyn buildings to her roster of 41,000 units if those vest in the next in rein action.

She will be working with Finance Commissioner Marc V. Shaw on that issue and on other housing issues that jointly concern the commissioners. They expect the new Commissioners of the Environmental Protection Agency and Building Dept. to join them at these meetings, which are being encouraged by the Mayor.

Jack Freund, executive vice president of the RSA, advised the officials to creating a center whereby owners can find out if they have complied, for instance, just with boiler inspections. Right now the Fire Dept., the Building Dept. and the Department of Environmental Protection all have varying rules, regulations and forms to file for boilers, and they are all filed in different places. "Put them all in one spot in a single service center," he suggested.

"Give me more examples like that," said Wright, that can be discussed at the housing commissioners meetings.

The Deputy Mayor responded to a question on water meters by saying that, "you cannot expect people to invest money if you make it difficult for them to make a return...The landlord is not a bad person, the landlord is there to provide housing."

He also said the Giuliani team would not be "looking for people with axes to grind," when they consider appointments to the Rent Guidelines Board.

The city's Water Board Executive Director, Steven F. Ostrega, said he would be willing to discuss reducing the cap on water bills per unit, which is currently $500 and considered too high by owners. He also does not plan to raise water rates, an action that was expected in July.

Wright recalled that when she left investment banking in 1987, she bought a Crown Heights brownstone with her IRA money. She said she has been to housing court, and knows what it's like to deal with that, as well as other apartment house owner paperwork.

Mark Alexander, executive director of the Hope Community, a non-profit organization that operates about 850 units in 45 East Harlem buildings, said the Housing Court judges treat him like every other owner. He complained also about what he deemed, "Kafka-esque" regulations. "All of us want to be pro-- tenant," he said, "They are our customers."

Small Property Owners of New York President, Roberta Bernstein, felt the chief administrative judge, Jacqueline Silbermann, was wrong in challenging a high court opinion that dispensed with inquests for the Bronx and Manhattan. In the meantime, owners are still waiting for warrants of eviction to be signed.

The Community Housing Improvement Program's (CHIP) president, Andrew Hoffman, is also general manager of Clarendon Management, which owns property in New Jersey as well as New York City. "I am a different person in Newark Court," he stated. "The tenant says 'I need my apartment painted,' and the judge says, 'you paint the apartment, you pay the rent.'"

Likening rent to feeding a cow in order to get milk, Hoffman said, if the courts continue not to require rent to be paid while cases are pending, "We're all going to lose our buildings."

In a poignant moment, owner Dennis Giddons of Crown Heights, who appears in the RSA video, said when he passes, his wife and kids will get rid of the building before they call the undertaker. While he thought the apartment house would provide for his children's college education, her salary as a nurse is subsidizing his building, he said, "in a very large way."