Chinatown Landlords Fear New Rent Laws Herald Corporate Takeover

CHINATOWN, NY — Chinatown landlords fear sweeping rent-regulation changes set to be introduced in New York are going to force them to sell off tenement buildings often owned by their families for decades.

Lawmakers reached a deal Tuesday night on the changes, which will restrict when a landlord is allowed to raise rents. Among them is a limit on rent hikes stemming from renovations — known as major capital improvements and individual apartment improvements.

But for one landlord, the changes threaten to make years of work pointless.

The man, who owns a property on Hester Street and asked not to be named, has kept an apartment in the building empty for more than a decade as he tried to save money to renovate it.

"I've been saving every last dollar I have working multiple jobs ... in order to get to the point where I can put money into renovating the apartment," said the building owner, whose family has had the five-story building since at least the 1960s.

He has taken on jobs as a day laborer and assists a handful of other families in Chinatown with maintaining their buildings. He has tried to take out a small business loan, to no avail, he said.

This year, he'd planned to spend the tens of thousands of dollars he'd saved and improve the building, with hopes to recoup the expense through the city’s individual apartment improvement, or IAI, program.

But with the expected changes to the law — which will reduce how much he can increase rents to make up for the costs — he says the work isn't worth doing.

"I just cannot rent the apartment out," said the building owner."I just can’t afford to."

He had hoped to destabilize the apartment — a dirty word among tenant advocates who want to curtail the deregulation of housing. But he said destabilizing the unit is necessary to make-up for the costs of renovations and help subsidize the other regulated apartments.

Tenants-rights groups have long said the package of legislation will strengthen tenants’ rights — emphasizing landlords have abused the existing laws to raise rents and push out tenants, including through building and apartment improvements.

"The Senate and the Assembly have come together with a proposal to confront decades of injustice caused by inadequate tenants’ rights in New York State," Cea Weaver, campaign coordinator for the Housing Justice for All campaign, said in a statement Tuesday.

Weaver called lawmakers' deal a "partial victory" since legislation regarding rent hikes to make up for renovations keeps the programs — MCIs and IAIs— in place, though with limits. Advocates wanted to scrap those programs altogether.

Under the proposed changes, landlords would be able to hike rents by 2 percent per year with building improvements, down from a 6 percent hike. Individual apartment upgrades would be limited to costs of $15,000 over a 15-year period in up to three units.

The woes of owners opposing rent regulation reform are not new. The rallying cry from small landlords has resulted in one group, Responsible Rent Reform, to spend tens of thousands on advertisements and public relations, drawing on tactics from tenant activists.

The Hester Street owner's concerns echo the Taxpayers for an Affordable New York, a coalition of landlord groups that includes the Real Estate Board of New York. That group said in a statement the legislation "will lead to disinvestment" and cause buildings to "fall into disrepair."

But in Chinatown, some say the legislation will push out longtime minority owners and spark sales to massive corporate landlords accused of harassing tenants.

Keeping the buildings despite financial difficulties is a part of maintaining Chinatown's history, some said.

"I could’ve left 10 or 15 years ago. But I wanted to stay around to preserve what was Chinatown," the Hester Street property owner said.

Chinatown activist Jan Lee wants lawmakers to differentiate “legacy owners” from corporate, bad-acting landlords in the package of nine bills, expected to be signed by Gov. Andrew Cuomo.

"We're what we would call legacy owners. We're owners who are single family owners that are trying to get by, that own a small number of tenement buildings, most [who] are single building owners," said Lee, who represents a small property owner family on Mott Street.

Under the new legislation, Lee said, a "corporate owner will buy it and they have the money to litigate with the tenants, to pay off the tenants, and the net effect of all of these laws is a drastic loss of affordable housing in Chinatown," he said.

"That’s what's going to happen. Because once we leave, they’re kind of like vultures that are hanging over Chinatown," Lee said. "You're creating an environment that is so onerous to ownership the only option is to get out."