Landlords and tenants cope with old, run-down rental rules

How small was Manhattan comedian Paul Campana's first apartment? ``The first time I put the key in the front door, I broke a window,'' he says in his act. ``I'm talking small.''

Most New Yorkers settle for far less housing quality than other Americans do. And almost no one admits to being pleased with being either a renter or a landlord in the nation's largest city. Tenant leaders see ``problems'' where landlords see ``symptoms.'' The list of needed repairs to New York's housing situation is long: middle and low-income unit shortages, building abandonment, homelessness, black marketing, harassment, and bilateral scorn for rent rules, administration, and courts.

As Tom Conroy, a spokesman for Gov. Mario Cuomo put it, ``It's a simple case of people who want cheap rents and landlords who want to make a profit on the property they rent.''

The basic rules were imposed by Congress in 1942 during wartime housing shortages. Repealed by Congress in 1945, the rental rules survive in New York, modified many times. They regulate what landlords may charge tenants in about 1 million units (primarily in New York City), with provisions for tenancy succession, subletting, a landlord-tenant Rent Guidelines Board, elderly tenant protections, evictions, and cooperative conversions.

Extension of the rules is based on the legislature's finding, every two years, that a housing emergency exists in New York State. Tenants continually argue that the emergency is obvious. Landlords counter that regulation prolongs the ``emergency.''

Both sides are monitoring a case recently accepted for United States Supreme Court review. Pennell v. City of San Jose (Calif.) may affect the legality of controls in 200 or so US cities. The 1979 law limits rent increases by a formula based on the tenant's wealth.

Michael McKee, director of the New York State Tenant and Neighborhood Coalition, calls the two-year extension of the rent regulations ``clearly what the real estate industry wanted all along. What you have now is virtually a landlord protection act.'' But, he says, ``Even the regulation we have now is better than none. Without it tenants would have no right of tenure.''

McKee argues that although rent regulation will never create housing, it preserves it, especially when used to curb conversion of rental housing to co-operatives and condominiums. He says studies show rent regulation is a factor in inhibiting abandonment and deterioration.

On the other side is Roberta Bernstein, president of Small Property Owners of New York. She remembers her early landlord activist stirrings in the first building she owned.

``I saw the tenants' attitude when the apartment was free market - they treated you and responded to you as though you were both human beings. A controlled tenant would slam the door in your face.''

On the rent law extension, Ms. Bernstein allows, ``We could almost live with the laws that now exist. What they're trying to do is to make them ever tighter.

``I would send out a warning, a red flag to the rest of the country, that we are America, and just because New York has made some major errors doesn't mean other cities have to. And they should know who the players are.''

The most visible legislative player is Pete Grannis, chairman of the State Assembly's housing committee. In his jammed office on Manhattan's Upper East Side, he defends the regulations he has labored to expand.

``We are a renter's city,'' Mr. Grannis says. ``Seventy percent of us are renters. My district is heavily laced with rent control, but has little abandonment. I don't see any building booms in any other Northeastern city with housing problems but without regulations.

``Rent controls have been a factor in distorting the housing market,'' he continues, ``but I don't think they are as big a factor as do some others. I think those are classical economic theories without the human element. Should landlords subsidize tenants? In the ideal world, no. Have they been doing it, and has this been reflected in building values? Yes.''

Grannis says the ``housing crisis'' is moving across the country. ``All urban areas are going to feel the pinch on this issue of people's ability to pay these inflated prices,'' he says, ``not just whatever the landlord can charge, but what's necessary to maintain older housing stock.''

``If the system were functioning properly, a landlord would be like a regulated utility, allowed to make a fair return,'' he says. ``We probably want to move to a system that one, subsidizes those who can't make it, and not through the owners - a means test - and two, move toward a system which targets those in need, not just those who happen to have been there.''