(Photo: Michael Crawford)

Her building is anything but unique. In many of the buildings Daly oversees, which include more than 1,000 units in seventeen Upper East and West Side buildings, residents used to be able to get spare keys from the doorman, at no cost, if they locked themselves out of their apartments. Then the management decided to charge a fee to anyone needing to borrow a spare key -- anyone, that is, except rent-protected tenants, who might have turned around and demanded a reduction in rent. Now any shareholder who misplaces his key is charged $25. The protected renters pay nothing.

Similarly, several of Daly's buildings decided it was also a security risk to allow food-delivery men upstairs, so shareholders now have to come down to the lobby to pick up their waxed cartons of steaming Thai curried prawns. But rent-stabilized residents still get it brought right to their door. "It's very contentious," Daly says. "The shareholders say, 'I pay a fortune for my apartment, and I have to leave my apartment and come downstairs to pick up my dinner, but the rent-stabilized person who pays $400 a month gets it delivered to their door!' "

In a building with nothing but rental units, the tension is mostly psychological, a matter of envy and resentment. It's in co-ops and condos where the practical, legal distinction between regulated tenants and shareholders becomes more nettlesome -- especially as building costs escalate.

"You see a lot of co-ops precluded from reducing services that cost a lot of money, just because they don't want to give regulated tenants a cut in rent," argues Jack Freund, executive vice-president of the strategically named Rent Stabilization Association, which contrary to its name opposes rent regulation. "A lot of times, a co-op board will want to get rid of manned elevators in their building and go to automated ones to save in maintenance fees. They can't, because that would mean a rent reduction for the regulated tenants. So in the end, the owners end up paying more."

Or living with less. James, an art critic, whose family recently moved into an Upper West Side prewar overlooking the Hudson, was a lifelong social progressive until he became a shareholder. "We're a large building, with 100-plus units, but we're the only co-op in New York without any storage space," he says, by way of explaining the litany of headaches that brought about his metamorphosis.

"It's all because, long ago, one rent-protected tenant managed to define the basement as part of his 'living space,' " James says wearily. "Years ago, apparently, he put a piano down there and gave his son piano lessons. He's a landlord himself, and he knows how to work all the angles. He's had the board in court a million times. He even told me, 'I survived the Nazis, I'll survive the invading yuppie scum.' "

Elizabeth, 38, lives with her husband on the Upper West Side and pays a market rent of $5,500 a month for a rambling classic seven. The rent is cruel enough. But even more cruel is the well-intentioned, raffish neighbor, a retired professor who has lived in an identical apartment for decades, only he is rent-controlled and pays around $1,300. "He seems to have unlimited disposable income," says Elizabeth, a writer. "He goes away to London 'for the theater' at least three times a year. I meet him in the elevator, and he'll say, 'Ah, Norway, the land of the midnight sun! You must go!' Who can afford Norway? The rent is crippling us; we can't afford to go on exotic vacations. It pisses me off because the truth is, we are subsidizing his trips."

Indeed, the most vexing situation is the sense of disparity between equals, which makes the remnants of rent regulation the equivalent of a lottery for the middle classes.

"It totally affects the prism through which you view your friends," says Andrew, a screenwriter who lives with his wife on the Upper West Side. "We're being priced out of Manhattan, but it's only when we start talking about that with friends that we start to find out how many of them are stabilized. You suddenly think back on all those conversations you had with them about the cost of living in New York, about how much private schools cost, and you start to wonder, 'Why are you so worried? You're not the ones paying $6,000 a month.' "

Sam Himmelstein, a tenants'-rights lawyer, says there has been a discernible shift in public sympathies toward the people who pay full fare, which is showing up more than ever in litigation. "I really feel it in court," he says. "I used to demand jury trials whenever I could, because juries in Manhattan were generally tenant-sympathetic. I don't find that anymore. Now you have doctors and lawyers, homeowners and free-market tenants, who I find often resent and feel envious of rent-regulated tenants. Some of those juries are just hostile."

Many rent-protected neighbors are acutely aware of the hostility they inspire.

"Listen, people do hate your guts as soon as they see how you're living," says Leslie, 46, a television producer who lives in one of the Upper West Side's premier buildings. "It can be pretty uncomfortable. Every time we have a new couple over, the first half of the dinner is basically silence while the guests sit there and try to process their envy."

For years, Leslie's building was a haven for upscale but happily shlumpy media types, the sort who moved to the neighborhood in the sixties and seventies and found sprawling rent-protected apartments big enough to hold their own book launches and close enough for a cab back from Elaine's. For them, rent control was the equivalent of a trust fund; it underwrote their bohemian New York fantasy, unthinkable on a writer's pay.

Leslie and her husband secured their gorgeous, rent-stabilized classic six twenty years ago. As comparable apartments in their building began to clear $10,000 or even $15,000, the landlord began to dangle six-figure buyouts for rent-protected tenants. Leslie, whose rent was stuck somewhere back in the era of important Woody Allen movies, never considered moving. She figures that any discussion of "fair" in New York is absurd, anyway, in a city of $600-an-hour corporate lawyers and trustafarians. "I'm the first to admit that it's totally unfair, but I would be crushed if I lost it. I wouldn't live the life I do without it." She adds, "We feel like Roy Cohn. They always said about him, he didn't own anything, but he lived like a gazillionaire."

Elizabeth, however, has a hard time sharing Leslie's glee. "When I complained about our rent to this one friend -- who lives in this fabulous rent-controlled apartment -- she says, 'Why don't you try Brooklyn? There are some really charming places out in Boerum Hill.' "

Simply moving "out" to Boerum Hill, however, is no escape -- at least when their new neighbors there are fighting every bit as desperately to preserve the very rent-control culture that the Manhattan yuppies are hoping to flee. Michael De Stefano, a project manager for the Department of Transportation, has lived in the same apartment in the less-than-fashionable Wyckoff Heights section of Brooklyn since 1985. Even though he has a comfortable white-collar job, he stays because the place is rent-stabilized, and at $583 a month, it's the last "deal" he's going to get.

"Where else am I going to go?" asks De Stefano, 46. "Neighborhood A goes chic and stylish, and all the regular people move to Neighborhood B. The people who are against rent control, I ask, 'What happens to us when Neighborhood B goes chic and stylish? Where do we go? Without rent control, it would be a city of bland, boring rich people. Oh, but that's what you want, isn't it?' "

As compelling as these arguments may once have sounded to liberal-elite Manhattanites, they often fall on deaf ears these days, since even handsomely compensated New Yorkers feel a growing sense of victimization by the inequities of the real-estate market. Their resentment bubbles over when they're brought face-to-face with lucky neighbors granted a statutory escape hatch from New York housing hell.

What is even more galling to those locked outside the system is that as often as not, the people they know with rent-protected places would not be unable to buy. On the contrary, some could afford a market-rate apartment if they had to. It's just that they don't have to, so they have the option of plunking their savings into, say, a summer house upstate.