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For Immediate Release: January 6th, 2004 Contact: Contact: Jordan Isenstadt (c) 516.991.3842 (w) 212.490.9535 (f) 212.490.2151 ***PRESS
RELEASE*** State Senator Liz Krueger
Emphasizes Need for Overhaul of “Flawed & Archaic” MBR System New
York, NY – State Senator Liz Krueger submitted testimony today before the
New York State Department of Housing & Community Renewal (DHCR) regarding
the proposed Standard Adjustment Factor (SAF) for the 2004/2005 Maximum Base
Rent (MBR) cycle. “A SAF of 17.24%
would be devastating for the tens of thousands of elderly low- and
moderate-income rent controlled tenants in New York City,” stated Senator
Krueger. “According to the 2002
Housing and Vacancy Survey, rent controlled tenants maintain the lowest
average income of any group of renters in the city, earning a median
household income of only $20,120 in 2001.
The vast majority of rent controlled tenants, who have a median age of
68 and on average already pay a greater percentage of their incomes for
housing than any other group of residents, do not have incomes that have been
able to keep pace with previous rent increases of 7.5% a year,” continued
Senator Krueger. “I fear that a SAF
of 17.24% will make it impossible for many rent controlled tenants to pay for
essential goods, and will place many of our city’s most vulnerable residents
in danger of eviction.” The SAF
formula, which was designed to attempt to measure and compensate owners
changes in their operating costs, has not been updated since the NYC Council
originally created it in 1970. DHCR
contends it has no power to change the MBR system and that it is simply
implementing a mathematical formula that is codified in law. However, Senator Krueger pointed out that
DHCR has the ability to “take a number of important administrative steps to
lessen the burden on rent regulated tenants.” One such suggestion is to conduct frequent audits on the books and
financial records kept by owners relating to the operation of their
buildings, and to alter the SAF formula if there are significant variations
between the formula and the actual costs.
The NYC Administrative Code states that owners’ books must be made
available to the administering agency at least once every three years, a
power DHCR has never chosen to utilize.
Senator Krueger also stressed that DHCR should immediately eliminate
self-certification by landlords of their expenses and of clearing rent-impairing
violations. “The
market and legislative changes which have occurred since the creation of the
MBR system, coupled with the fact that the system has never been administered
as its founders intended, have entirely undermined the legislative intent of
the law,” remarked Senator Krueger.
“The MBR system was designed in 1970 for a rental market in which
there were over one million rent controlled apartments, vacancy decontrol did
not exist, New York City controlled all of its own rent regulation laws,
inflation was high and the market value of most properties was comparably
low. The reality in 2004 is clearly
very different!” |
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