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.”
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.
A not uncommon story is that of the couple who live in a brownstone on East 87th Street owned by a client of real-estate lawyer Howard Stern. The couple maintain a rent-stabilized one-bedroom for $821 a month – which has allowed them to purchase a spacious retreat in Columbia County. “The wife keeps her driver’s-license address and car registration upstate to take advantage of lower insurance rates,” Stern says. “The husband maintains his driver’s license and makes sure he votes in Manhattan to take advantage of rent regulations.” They’re the archetypal Manhattan couple, fingerpicking the system with the delicacy of a Segovia. “And the law permits it,” Stern adds. “Holidays and weekends, they go up to their country home, which is in effect subsidized, because their rental is nowhere near what the market rate would be.”
“It was always this running joke in the building that the smaller the rent, the larger the apartment, but now no one’s laughing anymore,” says Andrew, 41, the screenwriter. He and his wife are now shopping – reluctantly – for a family home in New Jersey. Last summer, they were served a 70 percent increase on their rent, taking it to $6,000. Andrew was already feeling rather uncharitable toward his rent-protected neighbors this past winter when he was forced to witness yet another flexing of their statutory muscle: Management removed a bulletin board from the building’s lobby on which the tenants posted announcements for meetings and such. “They took this as an attack on their right to free speech and staged a near revolt,” Andrew groans.
“It’s a lousy system, just completely backwards,” he says, sighing. “It’s the rent-stabilized people who go to the tenant meetings and complain the loudest. Why? Because they can. We who pay so much more money are afraid to rock the boat. We’re the ones who are going to have to sit face-to-face with the landlord and negotiate a new lease every two years.”
Barbara, an accountant, and her partner, Maria, a travel agent, live in a prewar building in Murray Hill. The building has some 50 units, and perhaps 10 are rent-stabilized, including one that belongs to a couple who live next door to them who pay $850 for a spacious two-bedroom. Barbara and Maria, meanwhile, have seen their rent spike by as much as 20 percent every time their lease is up. They’re now shopping in Astoria, because they feel priced out of Manhattan.
“It’s unbelievable what they get away with,” says Barbara, 41. “The apartment has been in the family for years, so they do anything they want to, because they know they can. For a long time, they were smoking such incredible amounts of pot that the smell was wafting into our apartment. It drove us crazy. Plus, it turns out, they had a six-foot python in their apartment for years. We didn’t hear about it until it died and they left the carcass out on top of the garbage bags in front of the building.”
The landlord is little help. “We complain to the landlord,” she says. “But he’s too terrified to do anything at all about it. He knows they could haul him into housing court at the slightest provocation. He just says, ‘Hey, if you want to try to put together a tenants’ petition, fine, but there’s no way I’m getting involved.’ There’s another rent-controlled guy who keeps a big dog that’s always barking, even though there’s a sign in the lobby that clearly reads DOGS NOT ALLOWED. He says he’s keeping it for a friend, but he’s been keeping it for, like, three years.”
Still, Barbara supports rent control in theory. “The problem is looking at it in terms of camps, the rent-controlled versus the rest of us, because it’s basically all of us versus the landlord,” she says. “I’m the last person who would argue that people should be thrown out of rent-controlled apartments. I’d kill for one myself. The rent-controlled people are just doing to the landlord what we all wish we could get away with.”
Already, Leslie, the Upper West Side television producer, is starting to monitor the battle unfolding in Albany. After the initial uproar following Silver’s recent bill in the Democratic-controlled Assembly, it’s been eerily quiet. The Republican-dominated Senate so far has yet to take up Silver’s challenge and at this point seems intent on holding off the fight until it becomes inevitable next year, when the current laws do actually expire. Albany insiders on both sides of the issue predict a war for the future of rent regulation to match the vicious fight of 1997.
In the meantime, some find longtime homes transforming before their eyes. Leslie sees the pleasing Annie Hall time warp that she and her husband enjoyed for decades vanishing into a new-money void. “They seriously dress to kill,” Leslie says. “You’ll get the major babe with the major designers and the major jewelry. It’s getting to the point where I’m going to start having to put on makeup for the elevator.”
Every time the lease renewal comes due, she is forced to scrutinize an ever-more-intimidating series of documents written in dense legalese. “I get really anxious about it. You just feel like there’s a gotcha game going on, like they’re looking for any little mistake to use as an excuse to get rid of the stabilized tenants,” she says. “I reread every page 85 times. I always feel this tremendous tension, like if I don’t dot every i, they can throw you out.”
Michael Lutin, a tenant organizer in his building on West End Avenue, scoffs at the growing demonization of rent-regulated tenants he feels across the city, particularly in his own building. “Oh, there are very few of those little old blue-haired Jewish ladies living in three-bedroom apartments for $400 anymore,” he scoffs. “That was not fair to landlords or to other people in the building. But a lot of us aren’t paying $8,000 in rent for our apartments, either. I don’t feel bad about that. They’re not worth $8,000.”
An astrologer who writes Vanity Fair’s horoscopes column, Lutin sounds perfectly terrestrial when he assesses the cultural divide within buildings.
“Nonregulated tenants resent us regulated tenants very foolishly,” he says. Lutin is currently forming a residents’ group intent on uniting all tenants. “They were stupid enough to come in when the rent was $8,000. That was nobody’s fault but their own. Who in their right mind is going to pay $96,000 a year down a rathole? But to be against rent-regulated tenants is crazy, because we’re the only ones with clout in the building!” It’s been to landlords’ advantage, he adds, to divide tenants. “I have the law on my side. You have money on your side. You’re afraid that if you dare make a squeak, they’ll jump the lease up to $16,000. I’m telling you, if we all stick together, they won’t do that.”
An editor at a midtown publishing house, Raymond, 33, has witnessed the tension from both sides of the divide. He lives in a stabilized one-bedroom in the Village and pays a little over $1,000 a month. For the first few years, his upstairs neighbor was an elderly and irascible man, a rent-controlled tenant paying only about $250 for the same-size place. He infuriated Raymond by leaving his bath taps on so water would cascade into the downstairs apartment. Eventually, however, the old man died and Raymond looked forward to starting afresh with civil neighbors.
The landlord was happy, too, especially as the new tenants, a young married couple, were paying more than $2,500. Unfortunately, Raymond’s enthusiasm was short-lived. “The wife worked really late,” he says. “And every time she got home, she’d go tromping around on their hardwood floor in heels. I mean, call me sexist, but women’s shoes make a lot more noise than men’s, and she was being really aggressive on the floors. It just seemed gratuitous. Finally, I went up to complain. I was very polite. They just said, ‘Yeah, so what? We pay a hell of a lot more money than you do to live here. We’ll do what we like.’ “