SHADOW EDITORIAL: Courts Redress Real Estate Wrongdoings--The SHADOW: Issue #54

COURTS REDRESS REAL-ESTATE WRONGDOINGS:
But Can Ordinary Folk Actually Get Anything Out of the Law in Corrupt New York?

By A. Kronstadt

Millions of ordinary New York City people received an unexpected semblance of legal remedy
from the court system recently in the form of two decisions from judges at the state level. On January 22, 2010, Judge Emily Jane Goodman of the New York State Supreme Court ruled that
the Rent Guidelines Board (RGB), a body set up to determine legally regulated rents for 1.5
million apartments housing over 3 million New York City residents and whose nine members
are now appointed and serve at the pleasure of Mayor Michael Bloomberg, was not allowed to impose a mandatory flat rent increase on long-term tenants, much higher than the regular percentage increase normally set by the board.

Under the rent guidelines handed down by the board in June, 2009, tenants who have occupied
their apartments for more than six years and pay less than $1000 per month would be charged
flat $45 increase for a 1-year lease and $85 for a 2-year lease, whereas all other tenants falling
under the regulations would be charged a percentage-based increase of 4.5% for a 1-year lease
and 8.5% for 1-and 2-year lease renewals, respectively. Tenants were therefore to be penalized
for being long-term residents and responsible rent payers who have held on to their apartments
for the long term. According to the Supreme Court decision, the RGB does not, according to the legal definition of its mission, have the authority to create a separate class of tenants and charge them in a distinct manner.

A spokesperson for the City has stated Mayor Bloomberg's intention to appeal the decision.
The appeal will be litigated by City lawyers being paid by the City out of funds provided by City taxpayers, including the millions of City residents covered by rent regulation whom Bloomberg
and the RGB are trying to prejudice. The problem is that these rent guidelines went into effect in October of 2009, and, even if the decision is ruled illegal, $36 to $100 million dollars will already
have been overpaid by tenants. Landlords will argue against paying it back because it was the
City that ruled they could have it. The RGB, presided over by Bloomberg crony chairman Marvin "Markup" Markus, is no longer committed to keeping rents affordable but to extracting
reparations for building owners at the expense of our most stable community residents and
those who have been paying taxes here the longest. The flat increase is often referred to as a
"poor tax" because it inordinately hits communities where the rates of gentrification are the
lowest and the incomes of residents are more moderate, including Harlem, Washington Heights,
and East New York. Legal or not, the overpayments will perhaps turn out to be a done deal, just because that's the way they do it here.

The N.Y. State Supreme Court decision reversing the discriminatory rent guidelines against long-term tenants followed on the heels of the October 22, 2009 New York State Court of
Appeals ruling against Tishman-Speyer, the real-estate mega company that owned Peter
Cooper Village and Stuyvesant Town, large housing developments on the northern edge of
the Lower East Side of Manhattan. The Appeals Court, which in New York State outranks the Supreme Court, ruled that Tishman-Speyer had illegally removed hundreds of apartments from
rent regulation under the "luxury decontrol" loophole in the rent laws, which allows landlords
to eliminate all rent limits once the regulated rent goes above $2000 per month, while
simultaneously benefitting from a J-51 tax abatement from the City, which was intended to
preserve moderately priced housing.

The ruling would require Tishman-Speyer, and perhaps other landlords who have received
J-51 abatements and nevertheless removed units from rent regulation, to repay several
hundred million in overpayments, depending on how the individual cases work out, and
to re-regulate some apartments. Once again, the overpayments, or some large part of them,
might turn out to be a done deal because possession is nine-tenths of the law, and it is much
harder to get anything back after it has already been paid out. This past January, Tishman-
Speyer sold Stuyvesant Town and Peter Cooper Village to its creditors at a several billion
dollar loss, victims of the effects of the nationwide economic downtown. Do they even have
enough money anymore to repay the victims of their land grab?

It is these semi-legal practices, sanctioned particularly during the Koch and Giuliani
administrations, that have changed the face of New York from a place of creativity to a sterile corporate showcase which is now fraying as the real estate boom fades. This is how big real
estate brought about the great wave of gentrification during the 1980s and 90s--that great Ice
Age of the New York spirit when hundreds of thousands of people who loved the city were
driven out of their homes. Many of these shady practices have since been made illegal, long
after the damage was done.

For example, there are no more co-op "Eviction Plans," where a sponsoring landlord is
allowed to evict the poorest rent-regulated tenants by offering to sell people their apartments
for a relatively cheap price and getting 66% to accept, with those unable to buy getting kicked
out. In the 1980s. This was a key means by which tens of thousands of people here in the
Lower East Side, in Alphabet City along Avenues A, B, and C, were displaced from their homes
and replaced by what we then called, and some still call "yuppies." Subsequent administrative
law has abolished such eviction plans, which would probably not pass court scrutiny in the
21st century. But what good does the legislation or the scrutiny do for the hundreds of
thousands of tenants who lost their homes in eviction co-op plans, many of whom have left
New York City never to return?

In New York, both the City and the State of that name, the way big shots work is that they go as
far as they possibly can without actually checking up on the legalities of things, grab as much money as possible and do as much permanent damage as possible to the people that they are
trying to get rid of, and then absorb the legal consequences several years later, when nobody
even knows anymore how much money has been taken, and the people affected are already
living in some trailer park down South.

That is how Giuliani worked with his quality-of-life blitzkrieg, recognized worldwide as a hornets
nest of human rights violations. The constitutional violations were ruled upon after the plunger
had been shoved up Abner Louima's rectum, after Anthony Baez had been strangled to death
for playing football in the street, and after Patrick Dorismond had been shot dead for not being
a drug dealer and getting mad at a cop for calling him one. The law slapped the wrists of the
guilty, or even punished them fairly severely like it did Officer Justin Volpe who had tortured
Abner Louima, but it did not protect any of the victims from having their human and
constitutional rights nullified.

In New York the law may sometimes provide an ethereal satisfaction to those of us who are
not yet dead or in exile, but one must never have the illusion of being protected by it.

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