Two progressive Manhattan state lawmakers are back to pushing “rent control for the rich” to benefit residents of “Billionaire’s Row.”
State Sen. Liz Krueger and Assemblywoman Linda Rosenthal tried to sneak this into law last year, losing out only after we called out the injustice; they got a new version out of Senate committee last month but now are out with a third one.
Once again, their proposal applies to roughly 100 co-op buildings, mainly in Manhattan, that sit on land someone else owns; these “ground leases” are renegotiated every 20 to 30 years and usually result in a rent reset for shareholders.
Right now, an arbitration process kicks in when ground owners and co-ops can’t agree on a rent reset after the ground lease expires — all as per the original contracts.
Krueger-Rosenthal have given up on unconstitutionally setting strict limits on how much the land rent can increase; instead, they’re unconstitutionally rewriting the rules to put the land-owner at a gross disadvantage.
First, their new bill grants co-op boards right of first refusal (and 120 days to match) if the landowner opts to sell the parcel to someone else — which as a practical matter majorly reduces how much any third party would bid, outright reducing the land’s value.
Second, it drastically upends what happens if the co-op board finds it can’t pay the ground-lease rent that comes out of arbitration: Current law basically turns co-op shareholders into tenants with rent-stabilized rights, but at rents negotiated in good faith; the new bill would instead set those rents at an insanely low base — drastically skewing the dynamics of the arbitration in the co-op’s favor.
The two Manhattan progressives are plainly looking to curry favor with a few wealthy constituents who’d see the value of their units skyrocket.
Never mind the horrific precedent this would set as the Legislature tears up existing contracts by upending the terms of agreement.
Even if the law eventually got tossed as unconstitutional, it would poison New York’s business climate by proving that the Legislature holds contract rights in complete contempt.
If Senate and Assembly leaders don’t quash this madness, Gov. Hochul should tee up her veto pen.