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In Pricey N.Y.C., Residents Lose 'Right' to Rent Control

Rent will jump at least 20 percent for newly vacated apartments, but some controls remain in effect

Now that Ilan Mochari has his diploma from Yale University and a job with American Lawyer magazine, all he needs is an apartment in New York.

"I'm willing to wait tables, do a service job, anything to make the rent," says Mr. Mochari.

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It may take him more than one extra job. Mochari will feel the brunt of the 11th-hour changes made to New York rent-control laws, which will allow significantly higher rents for newly vacated apartments.

But the debate surrounding the state's rent-control laws runs much deeper than Mochari's plight. In New York City - where rent control has been as much a part of the culture as bagels and surly cabbies - the move marks a first step away from protection that many apartment-dwellers considered a right.

While the move was not as great as many might have liked, it could signal a change for other rent-control laws around the country.

In addition to charging higher rates for vacated apartments, landlords will also be able to raise rents for relatively well-heeled New Yorkers under the new law. The result will make New York rents - already among the highest in the nation - higher still.

But the agreement will also maintain 50-year-old rent controls and stabilization for nearly 2 million apartments. This will relieve the anxiety of thousands of senior citizens and others who were not certain if they would face eviction proceedings without any agreement in place. It also helps to keep city living affordable for the middle class in a city with almost a zero vacancy rate.

The final agreement, which was to be approved by the legislature yesterday, caps one of the most contentious issues in years. Republican state Sen. Joseph Bruno, the majority leader, had vowed to let rent controls expire if they were not significantly modified. Sheldon Silver, the Democratic Speaker of the Assembly, refused to budge. And Republican Gov. George Pataki found himself caught in the middle.

In the end, tenant groups were generally happy with the agreement since it did not include vacancy decontrol - that is, allowing rents to move to market levels after a tenant moves out. Tenant groups believed vacancy decontrol would lead to landlord harassing tenants to move out.

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"We're very pleased, we beat back the big bad wolf of vacancy decontrol," says Martin Brennan of the New York State Tenants & Neighbors Coalition.

Landlords, too, said they were generally pleased by the agreement, which will extend rent control six more years. They will get to increase rents by at least 20 percent on newly vacated apartments. If the vacating tenant has been in the apartment for a long time, there will be an additional vacancy bonus. "I'm happy but not ecstatic," said Mr. Bruno after the agreement was announced yesterday.

Bruno, who is from upstate, says he is merely trying to increase construction and jobs in the state. But tenants point out that since 1974 newly built apartments have not had any price controls. This has not prompted more construction.

"I think they were approaching this all the wrong way," says Steven Shapiro, a landlord. "They should have allowed decontrolled rents if the landlord upgraded the apartment with new wiring, plumbing and that sort of thing. That way they would increase the quality of the housing," says Shapiro, the head of Citadel Management.

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