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NEW YORK CITY-The stalemate over the leadership in the State Senate makes it likely that a package of bills designed to change the city’s rent laws will not come up for a vote before the legislative clock runs out on Monday, June 22. However, Steven Spinola, president of the Real Estate Board of New York, tells GlobeSt.com that the dozen or so bills were not a done deal regardless.

“I’m not convinced that the legislation would have passed had the change in leadership not taken place,” Spinola says. “It’s possible, but based on the counts we were making, there was still a shortage of the votes needed for passage.” He adds, “There was a significant amount of debate that would have had to happen before the legislation passed.”

The bills, including one that would modify the city’s vacancy decontrol law, had about 16 sponsors apiece, and Spinola says it’s likely that another six or seven senators would vote for them. However, a bill needs at least 32 votes in the 62-member State Senate to pass.

As an article in the New York Times posited earlier this week, there’s a perception that by upsetting the slim 32-30 majority of Democratic control, State Sen. Pedro Espada scuttled the bills’ chances and handed the real estate industry a victory. “Everybody’s pinning this on Espada, that he was the one who switched,” says Spinola. “His position all along has been opposition to his legislation.”

According to a summary of S2237-A, which would change if not abolish the vacancy decontrol provision of the rent laws, “Available data and several studies suggest that over 300,000 rent-stabilized apartments have been removed from regulation in New York City and the counties of Westchester, Nassau and Rockland under vacancy decontrol. The pace at which vacancy decontrol removes affordable housing units from regulation is accelerating with each passing year. Vacancy decontrol is an incentive for owners of rental housing to withhold services and to use forms of harassment to induce regulated tenants to vacate their rental units. In some instances, costs of renovation have been inflated or even falsified in order to drive apartment rents to the $2,000 threshold for vacancy decontrol. In other cases no renovations at all are done to vacant apartments and such apartments are treated as deregulated regardless of the legal rent.”

Espada, Spinola says, “made the point that the proposed changes would have no impact on his district. The bill would have kept apartments under rent regulation even if the tenant was paying up to $5,000 per month. His point was that this is not a rent that people in his district would pay, so the bill would have no impact on his constituents and in fact would have little impact on most New Yorkers.”

The changes to the rent laws, which were approved by the Assembly in February and await Senate action, were generally opposed by the city’s multifamily property owners and others in the real estate community. For example, Massey Knakal Realty Services chairman Robert Knakal predicted earlier this year, “If these bills are passed in June by the Senate, two things are virtually guaranteed: First, the housing stock in New York City will deteriorate at a faster rate than that seen in the 1970s. Second, the tax base will be negatively impacted to a significant degree.” Knakal, a blogger for GlobeSt.com, also discussed these concerns in a segment of GlobeSt.TV that appeared earlier his month.

Spinola points out that “the laws that affect rent regulation do not expire for another two years. In a year in which there have been some major issues, including a significant budget deficit and a bailout of the Metropolitan Transportation Authority, there’s the question of whether it was essential to pass changes to rent regulation when the current law–which in our opinion is working–continues to be in effect for two more years.” He disputes the Times story, which implies that the bills would have passed if the defection of Espada and fellow Democrat Hiram Monserrate had not thrown the Senate into turmoil. “I’m not convinced that this is what would have happened.”

For a related video, click here.

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