Low-Income New Yorkers Pay Higher Rent – Billionaires Receive Massive Tax Break for Luxury Condos
Two decisions by the NY State Legislature and Rent Guidelines Board will deepen gentrification in NYC
JAISAL NOOR, TRNN PRODUCER: Welcome to The Real News Network. I’m Jaisal Noor in Baltimore.
New York is one of the most unequal places in the world. The most recent census data reveals income inequality in Manhattan is on par with Nambia and Sierra Leone. Amid record homelessness and the highest rent in the city’s history, activists say two recent decisions demonstrate how housing policies play a significant role in exacerbating such disparities. A panel appointed by New York Mayor Michael Bloomberg voted for a rent increase of at least 4 percent for nearly 1 million city tenants in rent-regulated apartments, the largest such increase adopted since the financial crisis of 2008. Meanwhile, New York Governor Andrew Cuomo just put into law massive tax breaks for millionaires buying luxury condos under a program intended for low-income housing.
Now joining us to talk about these latest developments is Jaron Benjamin, executive director of the Metropolitan Council on Housing, New York’s oldest tenant union. Before joining the organization, he was the AIDS housing network coordinator at Vocal New York and active in the group Men Against Violence.
Thank you so much for joining us, Jaron.
JARON BENJAMIN, EXECUTIVE DIRECTOR, MET COUNCIL ON HOUSING: Hey, thanks for having me.
NOOR: So, Jaron, what’s your reaction to these two latest decisions? As we mentioned in our introduction, they come at a time of record homelessness and already the highest rent New York City has ever seen.
BENJAMIN: It’s unacceptable. And if the mayor and the state legislature are serious about ending homelessness, about making sure the people that live in New York City and New York State have a place to sleep at night comfortably, they can’t keep doing this.
NOOR: And can you break down–let’s start with the decision by Andrew Cuomo. What exactly does it mean that these tax breaks are going to millionaires who want to buy condos?
BENJAMIN: Yeah. So it’s actually a pretty tricky situation. The mayor, even though he doesn’t have a vote in the state legislature, typically does things like this. He supports legislation that gives real estate a big shot in the arm.
NOOR: Jaron, for our international audience, can you talk about New York’s mayor, Michael Bloomberg and just quickly give us a little bit about his background?
BENJAMIN: Yeah. So Mayor Bloomberg is one of the richest men in the world. And it’s only gotten–he’s only gained money and power since becoming mayor. I think the estimate is that he was worth $5 billion before becoming mayor, and just recently he checked in at net worth of, I think, $20 billion.
NOOR: And, yeah, so continue on how his policies have affected rent and development in New York.
BENJAMIN: Right. So the policies that Mayor Bloomberg has either pushed for in Albany or enacted as mayor of New York City has done nothing but drive low-, middle-income people further and further out of the city. There was a report released today that shows that over the last 12 years, which–somehow Mayor Bloomberg suspended term limits and was able to serve for a third term after winning another election most recently. But studies have shown that since–that, you know, in the last 12 years, lower-income people are living further and further away from the city and further and further away from their jobs. And that has real impact on people’s lives.
NOOR: And also the decision by the panel appointed by the mayor to increase rent in rent-regulated apartments–who exactly lives in these apartments? And what impact–it’s just a 4 percent increase, but what impact is that 4 percent going to have?
BENJAMIN: Right. Well, that’s a really good question. And I think it’s really important to dispel a lot of the myths. The myth seems to be that rich people live in rent-regulated apartments and it’s only rich people. Just to give you the landscape, nearly half of the rental units in New York City in all five boroughs are rent regulated. And the average income for a household of a rent-regulated tenant is about $37,000. And those folks are paying more than a third of their income towards rent. And by federal definitions that’s severely rent burdened, which means, you know, they’re sometimes a paycheck away from being homeless. So that’s a big chunk of New York City, of the neighborhoods of people that have lived here for so long. And those are folks that can’t afford a 4 percent increase for one-year lease or a 7.75 percent increase for a two-year lease. You know, that–they can’t sustain that.
NOOR: What exactly do you mean that they can’t sustain it? Can you put this in the context of the economy in New York City right now?
BENJAMIN: Right. So more and more people with the economy sagging have turned to jobs just to get a job that pays hourly. So if you have to commute further and further away from your house or if you live further and further away from work, that cuts into your wages. So literally people cannot afford these kinds of increases and can’t afford to be shuffled out further away from their jobs, away from the city any more than they already have. You know, being a paycheck away from being homeless means that getting sick at a place where you don’t have paid sick leave, that means that you’re in danger of losing your apartment. And we’re talking about a million rent-regulated units, which is 2.5 percent–sorry–2.5 million people in New York.
NOOR: And on the issue of the tax breaks for essentially millionaires who are buying condos, is there a link between these tax breaks and campaign contributions that you found?
BENJAMIN: Yeah, absolutely. We, the Met Council on Housing, collaborated with the Center for Working Families and Common Cause to produce a study that showed a direct link between the wealthy real estate developers that benefited from this tax break and the legislators that voted for it. And there’s a direct link. They were giving money to the legislators, and the legislators in turn voted for this bill.
NOOR: And in their defense, they would say that’s totally legal. Some of the other responses I’ve seen is that, you know, fuel prices are going up; it’s costing more to maintain these buildings in New York. What’s your response to these kind of reactions?
BENJAMIN: So our response is, you know, follow the money and look at the numbers. Landlords in New York City have reported fewer expenses than the city has given them credit for. Landlords themselves say, I’m actually not spending as much money on fuel and oil or repairs as the Department of Finance, which is controlled by Mayor Bloomberg, is saying, well, this is how much we expect that to go up. They’re actually reporting more money being gained, you know, they’re reporting more profits, which I think is–you know, there were several people that were involved in the Rent Guidelines Board process that have never been people to call for either a rent freeze or for a rent reduction. You know, I would–you know, they probably wouldn’t consider themselves radical. But when they took a close look at the numbers, they all agreed that a rent hike this year meant that, you know, Mayor Bloomberg does not care about the working poor. He doesn’t care about low-income people. He doesn’t care about the middle class. All he cares about is having what he called a luxury product in New York City.
NOOR: I want to read you a quote from The New York Daily News about this bill that just passed giving tax breaks to essentially millionaires to buy luxury condos. It says, quote, the bill singled out five developments to make them eligible for tax breaks, which would cost the city tens of millions of dollars in property taxes. Give me your response to that.
BENJAMIN: So right now in New York City a lot of my friends who are activists across many different sectors, whether it’s the health-care sector, whether it’s the housing sector or what have you, or whether it’s the sector that works with people that live with disabilities, everybody’s getting cut right now. Everybody’s losing money. And the city keeps saying, we don’t have money. We just don’t have money for your programs. Meanwhile, they are very, very willing to dole out tens of millions of dollars in tax breaks for the wealthy.
So really it’s about choices. Mayor Bloomberg and the state legislature have chosen to give tax breaks to the wealthy at the expense of low-income people and people who rely on programs.
NOOR: Finally, Bloomberg is in the last year of his 12 years in office. Is there hope that things can change under his successor?
BENJAMIN: Absolutely. We’re at a very critical time right now in New York City. Homeless numbers in New York–you know, the amount of homeless New Yorkers has never been so high. Under Mayor Bloomberg they have effectively doubled. I think it was about 25,000 people sleeping in the shelters when he took office 12 years ago, and now there are more than 50,000 people sleeping in the shelters, and that’s not including people who have been displaced by Sandy, and it’s not including people that are sleeping on the streets because there’s no room in the shelter.
So really I think with a new mayor who is willing to make affordable housing a priority, to make, you know, the other 99 percent of New Yorkers a priority, that can definitely happen. We really need someone to step up and to save our rent laws that really keep a lot of neighborhoods in place. If we don’t, if we don’t have that, then rent will continue to skyrocket, homeless people will–you know, the homeless number will continue to rise.
Some people forgot about this, but Mayor Bloomberg had an infamous policy for dealing with homelessness a few years ago where they would offer a one-way ticket out of town either by bus or by plane to a homeless person or to a homeless family provided that they could show that they could live on their own outside of New York City. So that’s basically what Mayor Bloomberg wants to do and has done is just evict people that can’t afford to live here. And I think a new mayor who’s not going to make that their policy can really effect some change.
NOOR: Benjamin, thank you so much for joining us. And we’ll certainly keep following this story.
BENJAMIN: Alright. Thanks so much.
NOOR: And thank you for joining us on The Real News Network.
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