Edward Sulzberger

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Good evening and welcome to you and your landlord these transcribed programs are broadcast over the station on the second and fourth Fridays of each month our guest for the series is Frederick as Berman the commissioner of New York City's Department of random housing maintenance even commissioner. I understand you have a worthwhile guest alongside of you to get to articulate one yes I'm delighted to welcome to our microphones tonight a an old friend an adversary distinguished real tour in the city of New York Mr Edward Salzburg a who is the president of cells brother Ralph and known to the public as the president of the Metropolitan fair rent Committee which is the organization which has been and being for many years and which takes a public stand in behalf of the industry against rent control in the city of New York and it's nice to have you here these microphones we've had many for raise back and forth over the last few years and I thought today today we could possibly chat in general about some of the things that that have been on our minds both in rent control and other aspects of housing Thank you Fred I appreciate the opportunity and we're nice and spot our hands handcuffed I'm sure that this is going to be a real pleasant discussion well it should be pleasant Ed we're both freshly suntanned having come back from a brief holiday respite and and then we relaxed and refresh and maybe you even can see that we ought to extend rent control at this juncture I won't go so far as to say that I need a much longer vacation Well it had always been considered that a reasonable Rand is one that would represent one week's salary and as a reasonable monthly rent would represent a week's salary I think that this is still valid. It is generally recognized as such and this is what. Most. Housing authorities. And economists feel is the is a round about a person can afford to pay. For in my belief and I think that the statistics will bear this out rents in the city in the arc and certainly rents in the control sector is less. Than this one week's salary which is about twenty two and a half percent I guess of. A person's. Monthly. Take home pay and let's let's sort of set the stage as to where we stand here in the city of New York we're faced with a rather interesting dichotomy that you are so familiar with on the one hand a spokesman like yourself for the real estate industry feel that rent control has caused a problem with our housing that you are obviously unhappy with the law and would prefer that there not be such a law. On the ass on the one hand we're talking about rent controls which affect about a million four hundred thousand units in the city on the other side of the scale however is the problem that's been recently of some concern within the city ranks and certainly amongst many of the people of the city about the non-controlled apartments those primarily built since one nine hundred forty seven we got it close to half a million of those where there is an unlimited amount of rent increase permitted and the fact of the matter is that in certain of the instances at least there seems to be some rather large rent increases being asked in certain of these apartments and I clamor from tenants affected in some political people that perhaps we ought to extend rent control so here we have crosses on the one hand to extend rent control cries on the other hand to relax rent controls. Earlier this week the city council took action to override a mayor's veto and and in effect reinstate a City Council measure which would limit and in fact freeze declare a moratorium for two years on or rent increases in Mitchell Aamer middle income housing projects with all this variety of views and and can. Drastic actions on the port of the city government what do you see for the future of housing where are we going to think well let's. Let's go back. We have lost a tremendous number of housing units in the city and they are and although you and I have discussed this and. It is your feeling that. Housing has been abandoned in other areas of the country besides no yacc it is not the same type of housing that we have lost in the city housing that was built in the one nine hundred twenty S. which is now boarded up and vacant. In addition to that rent controlled by its very nature has. Frozen people into their apartments because of the fact that runs below the market and the normal movement that Rand has become involved in is nonexistent. In the city of New York when you have a situation where people continue to occupy and retain apartments just such as we do have here in the city and and add to this a loss of housing facilities. And by statistics and a very substantial increase in the substandard housing. It stands to reason that but such housing that does become available and I pray market is going to be subjected to upward precious and so far as rents are concerned and this is what we are experiencing. It's my feeling that if we had a normal supply of housing and unfortunately don't have it in the country. That the pressures that are being exerted on the part of. The nine controlled sector in the form of increased rents would not be as. Extensive as the. As we talk about them today I think that the solution here if we can get a solution may be in several categories number one some way must be found to encourage private enterprise to build and the surest way of not having private enterprise belled is controls and if the city council because a certain number of tenants and. The percentages I understand it very well. May be. A thousand of the five hundred thousand units so maybe two thousand out of the five hundred thousand units the City Council controls these apartments because of such increases. I am very much afraid that we are going to see an ace a sation of housing construction in the city and a yard by private enterprise. I I think that the industry is attempting to develop. That policing methods and so forth which would. Assist in those cases where a tenants' feel that they may have been subjected to increases that are excessive I think each individual apartment is one that requires individual study and I don't think you can pass a law that would be that would have the if such an effect upon that it be universal as far as the city is concerned and let me ask you let me ask you this course the self policing aspect is is an important one to as you know when when I first talked publicly about this issue I guess it was back last July when it first started to take on serious proportions at least in our office. The idea of self policing is obviously an important first step and I think those of us in the administration would like to see us resolve it on the basis of self policing many of the members of the industry though have stated both publicly and privately that they they are skeptical as to whether or not you can really have a a self voluntary self policing aspect because of the fact that there are so many people that are involved in ownership of buildings and and there are some who are not in the mood cooperate and if you don't have any kind of sanctions and they will them just disregard whatever criteria the industry might set now is there any way that that you can think of that perhaps could cause a recalcitrant owner who doesn't want to abide. To toe the line in this area yes that self policing would be effective I think that there are areas. Where a policing could be made effective. Or one of the there are many pressures that can be exerted upon. By individuals in the industry if such pressures would be required. I think that. Conversations with owners by other owners would have a very substantial effect the suggestion which which may be which may be made I know it was one that. I had thought about when I was home for three or four days with this Ariano bug was a type of committee which would be. Under a organization similar to the American Arbitration. Association or something of that type where the those complaints would be would be presented what I do think that if. A number of the people have expressed to you or if what these people have said to you that it's impossible to police industry and on that basis you have to pass a law I don't think anybody would be hurt in any way. By trying to see whether the industry can exercise the type of control that might be needed now I don't know whether it does or doesn't I'm going on the assumption that the that you say that there have been a substantial number of complaints and so forth and and complaints of excessive run increases. But I think that to proceed and say well we don't trust the industry per se bingo and let's let's. Put the controls on without giving the industry such opportunity I think could be a mistake and not and the seriousness of the mistake is the future of New York City's Housing Well it can switch is more to concerns me when you talk about the score again new building in the city of New York there is no rent control on new buildings what other provisions what other. Binds a city of New York have new building that would discourage builders from going ahead and doing just that there's no control on as yet if on you well what I'm talking about is you mean and. I think I understand what you mean but let me say this when I'm talking about is that if you do put control in the free market. You're going to further discourage building. By by the conventional builder what we need is housing we need a change in the zoning law to permit the type of an expensive housing or less expensive housing that could be belt and was being built prior to the present zoning law. The housing the nine and twelve story side street building which was going up which is cannot be built any more why is us or because of the requirements of the nose of the present zoning color they cannot get that and sufficient number of apartments in a in a building of that size you need corners and you need large plots. So this is that this has to be modified in order to have to in order to be able to be able to get were these I was off the street buildings. Luxury buildings in other words the city of New York you know have a Perhaps they have an abundance of high rise luxury building what about the lower middle class or the middle class I mean where do they live what what is the industry prepared to do for for that income category be in the that income category is got to live in the housing that is older and has already built and is presently under rent control and such type of housing is gonna be made. Viable it's gonna be upgraded so that the the housing as such is. More livable and they can only be done with some relaxation of rent control so that this housing becomes profitable which it is not profitable today for a great many many owners and by so doing this is the type of housing way a low and middle income people will be able to live and should and should be living under the present construction costs present mortgage because it's almost impossible to build. Middle income housing without tremendous subsidies we are involved and in middle income work we do middle income management of rental jobs and that is meant of middle income co-ops we are involved in the sponsorship of some and there are several in the west side of Manila area where the rents that high that the middle in that the middle income tenant can live there are feelings up to twenty five thousand I was the. Ed I mean this is not what. This is not what I design for and let me get back to a point you made earlier John interested in getting your opinion on you we made the point as the industry has made very clearly to us in the city that if legislation is extended to the present non-controlled sector that in your judgment this will discourage any new construction. There are two bills pending right now before the City Council one of which would extend the present rent control law to all of that non controlled sector. I would probably have to agree with you as a housing official that that would serve to discourage the builders from building new construction because of the of the rigidity that we all would have to agree exists in a monolithic law such as rent control law however. There is a nother bill pending before the council which is not a rent control bill it's a bill which is intended to protect a tenant in possession and that bill as I understand it permits a landlord a particularly new construction to charge any rent he that the market will bear but once the tenant is in the a particular apartment and as long as he stays in that apartment the landlord would be entitled to a periodic rent increase each year under a two or three year lease period and I think a ten percent increase for a two year lease and once the tenant moved out the landlord would then again be able to get anything that the market would bear Now that particular bill as I read it would not in any way have an effect on new construction or should not have an effect on new construction in that it would not inhibit a builder from charging whatever his first rent would be do you think that do you think that particular bill would also discourage new construction I think it would discourage new construction for several reasons in the first place the. In my opinion the increase of five percent a year was insufficient based upon and crease operating costs and properties increased taxes increased labor and. The increased cost of maintenance and fuel and whatnot I also fail at the concept of control as such just by its very concept is going to discourage the investment of capital it will certainly discourage investment on the Panama that the bankers. I can tell you this and I'm sure that you know that it is practically impossible today to get in to get a mortgage. On or in a rent controlled property and the entrance raised now are running in excess of eight percent. Because. It hit this figure with reference to the no. New increase in the and the prime rate. Tying all these things together with control and rates and so forth I just don't see why anybody would want to make this kind of an investment when he can go and buy bonds or treasuries and whatnot and make a return without going through all the trouble but I had like to just turn a moment to another point that there's an interesting news story that went out over the Associated Press ticker nationally. On December thirty first you may not have seen it only I just happen to have it sent to me today with as story done nationally on the run situation in New York and some of the other cities but particularly in New York and the thrust of the story was that the rents in New York City are so astronomical as a as compared to other major cities they cited in the in the story that in New York. A three bedroom apartment on the East Side of Manhattan in a new building runs upwards of seven hundred dollars a month rent which I think is probably a realistic figure as I as I know the rent market on the side of Manhattan and they pointed out. And I listed about ten other major cities San Francisco Baltimore Chicago Philadelphia Boston right down the line at three bedroom apartments in these other cities were as I recall the figures I think the next highest city was either Boston or Philadelphia and the rents for the three bedroom apartments were about one half I think the highest figure I saw was about three twenty five and it descended down to about one seventy five for cities like Atlanta and a few others why why is it so expensive to rent in New York City as opposed to some of these other cities number one. I think that you can just take a run figure and use it to compare and I see you look into what makes up the run. Construction costs in New York are probably higher than any other place in the country. At this by itself is going to cause an increase in rent because being it costs more to Bell you reconstruct for instance this instruction costs in New York I think are higher than any other place in the country the next thing is the type of services that are being given to tenants in New York is entirely different than the services being given to tenants I was with you up to Boston new up to these other communities and there is no such thing as Dom and they have none see it as and they don't provide the same types of services I think you have to look at the taxes the tax base you have to look at the assessments method of taxing in most communities a tax now on the basis of gross income as opposed to well you know there are many many Fact is I think we probably pay the highest wage to Bill and service employees who work in these buildings and and all these things together. In addition. You if you're going to pick your prime neighborhoods in every community and you pick your bacon Helen Boston and and your shore and Chicago and all the other prime neighborhoods I don't think you'll find that you have the same types of rental discrepancy I also know that you're not you're talking about a little little diamond when you talk about. Med Manhattan. And you know if you you can't say that because rents are high in the East Side of Manhattan that this is the level of rent in the entire city N.E.R. No but I wasn't but I think though the facts are that in the new construction even the West Side of Manhattan Riverdale section of the Bronx certainly even regal park and Forest Hill sections of means the rents are high and getting higher and getting substantially higher and it would certainly would appear that to live in New York today for a family that wants to rent is a is a very dramatic experience and a very difficult undertaking for people unless they are quite affluent this is the problem that we face in New York and I presume this is one of the reasons why the pressures are so great to to do something to protect the person who finds himself just locked into a situation that he can't afford to meet I don't know what the solution is a commissioner of protection I think possibly those who do are prepared to rent these new luxury buildings. And get a quotation of two hundred fifty three three hundred dollars a month that they renting agent ought to advise them that they're in for an increase as soon as the lease is over as that you know as as what was brought out of the last set of hearings that you presided over the a lot of you know very very comfortable people who thought they could meet the rent were put to the expense of having to move after two or three years because they were not advised was cut the autumn tore and they were bombed right out of the well in very posh apartment after they lease was up they just couldn't afford the increase as a bank of apartment construction in New York occurred in one nine hundred sixty two in one thousand nine hundred eighty three before the passage of the zoning law. Before it became effective and there was a very very substantial oversupply of apartments and they are. And as I've said many times is only one thing in real estate that you saw on that time and space. And was tremendous vacancies and we didn't have tremendous vacancies in the new apartments they were being rented below the market and would and people get it we were receiving some pretty substantial concessions trips to Europe and God knows what not you have a final word commission Excuse me sir we're about how your time as a high money star the time goes so quickly as it always does we'd enlarge the shelf in fifteen minutes or twenty five and we could have used another twenty five minutes to talk to weigh and inform them delightful gas dead cells burger and it I want to thank you for taking the time to come down and perhaps you will do this again some time and finish up where we left off thanks so much for thanks for having me Thank you Commissioner you've been listening to you and your landlord with Fredricka suburban New York City's rent and housing maintenance commissioner transcribe series has brought you with us time on the second and fourth Friday of each month join us again two weeks from tonight at nine thirty for another edition of you and your landlord.

Audio courtesy of the NYC Municipal Archives WNYC Collection

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