Giuliani backs gradual vacancy decontrol

Real Estate Weekly, May 19, 1993

In an address to the Annual Meeting of the Bronx Realty Advisory Board, Rudolph Giuliani, upcoming candidate for mayor, said he would support state law amendments that begin to implement luxury decontrol as part of the process of emphasizing the private market in the city and returning housing to the private sector.

BRAB President Ruben Klein said he welcomed Giuliani's Support for a decontrol process, and he noted that a luxury decontrol proposal has been introduced into the State Senate. this year. Klein pointed out that BRAB for years has been asking state officials to authorize luxury apartment and vacancy decontrol.

Giuliani said he would not support the abrupt, total elimination of rent regulations because such a move would destabilize the lives of 10s of thousands of people who are living on low-and fixed incomes.

Under his "agenda for housing," Giuliani said, he would create an environment more conducive to housing investors, and he would move to return abandoned properties back into private hands as opposed to having the city spend billions to remodel and subsidize them.

The overflow audience of owners and agents attending the BRAB Meeting also elected the officers and directors who had been nominated, and they heard update reports from Michael G. Berger, counsel in the industry's suit against the Housing Court, and Richard A. Kahan, chairman of the Bronx Center, a planned, multi-billion dollar development on 300 blocks in the West Bronx.

BRAB Secretary Michael Laub introduced Berger, and, explaining the importance of the suit, said that the industry "can't survive unless there are changes in the Housing Court.

BRAB Executive Director Carol Keenan introduced both Giuliani and Kahan. Keenan cited Giuliani's experience as a former U.S. Attorney for the Southern District, and she emphasized that Kahan's background includes expertise in law, economics and urban planning.

Berger said he hopes that the suit against the Housing Court, brought for the industry by the Rent Stabilization Association, will go to trial early next year. He explained that despite a settlement two years ago, the Housing Court has continued to abuse owner's rights.

The lawsuit was started in 1989-based on Berger's findings of "widespread and systemic abuses" perpetrated against owners in Housing Court and condoned or carried out by the court's personnel. It was brought in the U.S. District Court, and the abuses cited included anti-owner statements; coercive conduct; refusals to discipline judges; acceptance of frivolous show-cause orders; and delays in the issuance of warrants.

In 1991, the Housing Court Administrators said they would implement changes to assure even-handed administration of justice, and the owners agreed to the settlement. But within a year, Berger said, Housing Court personnel, including judges, were violating the law and were "inventing new ways to thwart their obligation to dispense justice fairly." The new ways included applying different legal and procedural standards to owners and tenants in violation of the owner's rights under the Constitution's equal protection clause; and applying inconsistent rules that slowed the processing of warrants.

Berger and the owners bringing the suit moved successfully to have the case restored to the federal court docket and to include their new allegations of wrongdoing.

Bronx Center Chairman Kahan said that a progress report on the center will be issued in a few weeks. The center, he noted is a concept of Bronx Borough President Fernando Ferret and is expected to have a major impact on the Bronx both "physically and on its psyche."

He explained that the Bronx Center comprises a human agenda as well as the bricks and mortar of new housing, open spaces, and transportation facilities. The human agenda, he said, includes economic development to create jobs, and plans to provide health and human services, and education and cultural facilities.

"If billions of dollars are going to be spent on the Bronx Center, we want to keep as many of those dollars as possible in the Bronx in labor contracts," Kahan said. "The construction should aim at retaining residents and strengthening our commercial hub. We expect to improve the waterfront section of the site and the Yankee Stadium area. Meanwhile," he continued, "a new Police Academy will provide a mentor program for area children, and the Board of Education has agreed to three special schools in the area."