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Rent Asunder

When the people in 11B are shelling out four times as much as those in 10B -- the ones with the weekend estate in Woodstock -- neighborly thoughts go out the window. It doesn't help that rent-protected tenants often get better services than shareholders paying full freight. A new kind of class warfare is breaking out in some of the city's toniest buildings. Alex Williams reports from the front.


David, 30, an executive in the music industry, bought his first home, a studio in a large apartment building in the East Village, four years ago. An undeniable part of its allure was the liberal, activist tradition of the neighborhood itself. "It's not like so much of Manhattan now, where the whole feel is about money. It's still downtown. If there was a political debate in my building, it was between Democrats and Naderites."

The building, which went co-op during the eighties, was a typical mix of young professionals, many carrying mortgages of $1,200 or more plus maintenance fees over $700, and an older generation of renters, several of whom had moved in when the neighborhood was still called the Lower East Side. Many of the renters were rent-protected, some paying as little as $500. "I think if you polled most people in the building, they'd have said unequivocally that rent control is a good thing," says David. He thought so, too, at least in theory, until he and the rest of his fellow shareholders decided they'd like to build a roof deck.

The building enjoys views stretching to the East River, and the residents formed committees to plan a roof deck that would include potted trees, deck chairs, and a large dining area for torpid summer evenings. Alas, it was only as they started scouting for an architect to draw up plans that lawyers on the board blew the whistle. The problem was not the city's archaic zoning laws but, oddly, its rent-regulation laws. Or rather, as David puts it, the "fear of the rent-stabilized tenants."

The board discovered that if it built the deck, the minute the first rent-protected sunbathers spread out their towels, it could be protected, forever, under the city's Rent Stabilization Code. This meant that should it ever be closed for repairs, or altered in any significant way, or if the board ever decided it couldn't afford the upkeep, rent-protected tenants could argue they had suffered a "reduction in services" and promptly apply for a reduction in rent. The people already paying the least would pay even less, leaving everyone else to shoulder even more of the building's costs.

As the board earnestly debated what to do, one member suggested barring renters from using the deck at all, as some buildings do. Though that's legal, others pointed out that it would clearly be difficult to police and might also open the building up to a lengthy -- not to mention costly -- discrimination suit. Even a frivolous lawsuit could drag on for months; legal fees could be ruinous.

"We didn't want to risk it," says David, "so there's no roof deck."

For the same reason, he explains, the building does not have a doorman. "Because once you hire one, if something happens and you can't afford to keep him, the rent-protected people could sue." He sighs crossly. "It just brings out these terrible thoughts that you wouldn't otherwise have. You see these 80-year-olds in the elevator and you think, Would you just die already?"

The rows about rent control were supposed to be a thing of the past. Albany's Rent Regulation Reform Act of 1997 -- which significantly bolstered the "luxury decontrol" legislation passed in 1993 -- was designed to eliminate the worst abuses of the system: Tenants who made more than $175,000 a year -- and apartments rented for more than $2,000 -- were ruled ineligible for protection. Over the past decade, 148,000 apartments were deregulated.

Gone were some of the most outrageous examples of the celebritocracy's exploiting laws drafted for the working poor: Mia Farrow was forced to move her brood from their famous Hannah and Her Sisters eleven-room apartment at the Langham on Central Park West when the rent shot from $2,300 to $8,000. Her neighbor Carly Simon relinquished her spread with park views, too (the Simon & Schuster heiress complained that she had been priced out of her native city because "I wasn't willing to move into a very small space").

But that still left thousands of cases where no more than an uneasy truce stands between co-op owners and the renters just down the hall they are subsidizing -- even though their incomes may be comparable. And long-simmering tensions have been aggravated by the astronomical rise of real-estate prices during the Rudy era. As the cost of market-rate apartments continues to shoot through the roof, the disparity between the rent-controlled haves and the have-nots is more extreme than ever. And so is the envy.

Examples are most dramatic at marquee buildings like the Apthorp, on the Upper West Side, home until very recently to the modern-day Nick and Nora (Pileggi and Ephron) and still the address of celebrities as diverse as Steve Kroft and Cyndi Lauper. Some tenants still pay less than $2,000 for eight-room apartments overlooking the building's courtyard and fountain, while their neighbors can pay up to $25,000.

But even in less rarefied buildings, it's not uncommon for protected tenants to lay out a quarter of what their neighbors down the hall do. Barbara Daly, president of ACP Realty Group, has some tenants paying as little as $350 for rent-controlled one-bedroom apartments, and a great number of rent-stabilized tenants paying less than $1,200 a month for two-bedrooms, while their shareholder neighbors living in identical apartments are paying out between $3,000 and $4,000 a month in mortgage and maintenance.

And the ill will flows both ways: For their part, rent-protected New Yorkers know that they could never get such a great deal again, making them, essentially, prisoners of their bargain apartments. They are an increasingly endangered species -- a situation that makes them only more willing to throw a few elbows as they try to protect their homes.

Sherwin Belkin, a real-estate lawyer, says, "You have residents who see their building changing. They couldn't afford to move into their own building today. There is a resentment to the new people coming in. As high-income residents become more and more of a majority, the long-term people -- a lot of these people have lived there for 30 years -- feel, This has always been my home, and suddenly I'm a stranger here."

Threatening to throw the match into this volatile situation is Assembly Speaker Sheldon Silver. In April, the Lower East Side Democrat stunned Albany with a proposal to extend all existing rent regulation in the city until 2008 -- and to roll back the very luxury-decontrol measures that served as the foundation of the 1997 compromise in the first place. The Republican-controlled State Senate seems intent on tabling what promises to be a very nasty fight until next year.

In the meantime, not only do controlled and full-fare residents pay wildly differing amounts, but they enjoy different privileges.

Molly, 25, is a marketing executive who inherited from her father a rent-controlled two-bedroom in a luxury Upper West Side prewar after college. "When my building went co-op, they tried to evict all the rent-controlled tenants, and they did get rid of a bunch," she says. "They almost got rid of me."

In the ensuing years, she has sensed underlying suspicion on the part of her neighbors. "One woman came up to me and said, 'Do you own your place?' What she really meant was 'Are you one of those rent-controlled people?' They know we pay a lot less, and they resent the fact that a lot of the rules don't apply to us."

One of those rules concerns furniture, which shareholders are forbidden from moving except using the service elevator at restricted hours. But rent-controlled tenants are allowed to move furniture anytime they want -- otherwise, they might claim a "reduction in services" and angle for a cut in rent. Molly says she happily flouts her privilege, but only to get back at the super, who also has treated her coolly since she moved in.

One time, she was carrying a small table up to her apartment when the super stopped her and told her it was against the rules. Not for her, she reminded him. It became a tense standoff: "He said he was going to shut down the elevator with me inside if I tried to go on up. He got really hostile. He only let me go when I threatened to call the cops."

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