In an unexpected twist that RSA hopes will help our case against the City Rent Guidelines Board (RGB), Mayor Bill de Blasio further touted the consecutive rent freezes during a town hall conference call on March 15th with senior citizens about affordable housing.
According to Politico New York, Mayor de Blasio publicly took credit for the rent freezes and his appointments to the Board and that the historic zero guidelines happened “…under this administration because I instructed the Rent Guidelines Board — I name the members — and I instructed them to not follow the biases of the past, but be respectful of the needs of tenants and not just the needs of landlords…”
Last year, after the RGB voted in favor of the second straight rent freeze for one-year leases in RGB Order No. 48, Mayor de Blasio continuously denied having any involvement with the decisions made by the RGB and stated that the Board acted independently. After this recent admission by the Mayor, it has never been clearer that he indeed instructed the Board to fulfill his campaign promises of a rent freeze.
The timing of this statement by Mayor de Blasio could not have been better as RSA awaits a decision by the Manhattan State Supreme Court in regard to the lawsuit against the RGB for the second consecutive rent freeze. RSA argued before Judge Debra James that the RGB should not have considered tenant affordability when determining rent guidelines because it is not among the several criteria set forth in the statute. The language of the law states that the Board is mandated to consider appropriate rent increases based on costs incurred by owners of rent-stabilized apartments.
Based on the new claims by Mayor de Blasio in his conference call, Jeffrey Turkel of Rosenberg & Estis, P.C., who is representing RSA in the lawsuit against the RGB, formally wrote a letter to Supreme Court Justice Debra James on March 16th. On behalf of RSA, Mr. Turkel requested that RGB Order No. 48 be annulled and that the RGB be directed to issue a new order in accordance with the statute.
The Mayor’s comments, in light of his prior political rhetoric, establish that the process leading to the rent freeze in Order No. 48 was a sham. By “instructing” the RGB to not follow “the biases of the past,” the Mayor was in fact directing RGB to disregard RSL section 26-510(b), which requires the RGB to calculate rent adjustments based on landlords’ costs and the general health of the residential real estate industry. Purporting to focus on the “needs of tenants” – a consideration not permitted by the statute—the RGB in fact focused on the Mayor’s political agenda. The RGB then authorized rent freezes for the first time in its forty plus year history. All of this cannot be a coincidence.
Fortunately, the Courts have recognized that New York City agencies cannot arbitrarily make decisions simply to further the Mayor’s political agenda. In Prometheus Realty Corp. v New York City Water Bd., 2017 NY Slip Op 01263 (1st Dept 2017), the Water Board, at the Mayor’s prompting, issued resolutions increasing water rates for owners of apartment houses, only to use that revenue to fund a “rebate” for owners of one-, two-, and three-family homes. Justice Edmead annulled the resolutions in question. The Appellate Division affirmed Justice Edmead, holding that “the one-time credit adopted for some, but not all, water customers at the same time the Water Board needed to increase overall water rates to fund a projected budget shortfall for that particular year, has no rational basis.”
Mayor de Blasio has admitted on the record that the rent freeze in Order No. 48 was not the reasoned decision of an independent board following the governing statute, but was instead the arbitrary and capricious action of RGB board members, politically controlled by the Mayor, who were “instructed” to deliver on a campaign promise.
In addition to coverage in Politico New York, the New York Post wrote an editorial the day after Mr. Turkel submitted a letter to Supreme Court Justice James. The Editorial Board criticized Mayor de Blasio for his involvement in the outcome of the most recent RGB deliberations and defended RSA’s argument that rent freezes will ultimately hurt the City’s affordable housing stock.
As we went to press, we await the decision by Judge James which is expected on March 28th. We will have a full summary of the decision in the May edition of the RSA Reporter, however, stay tuned for immediate updates via RSA’s email blasts and Facebook and Twitter pages.