Hyman Glick

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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 Friday of each month our guest for this series is Frederick S. Berman the commissioner of New York City's Department of rent and housing maidens going to be commissioner Berman Joe vision of Ermine from time to time you bring a very interesting guest a member of your staff or an outsider and we discuss a very interesting problem in the field of rent and housing making and I see that tonight you're brought somebody so why don't you introduce him and decide what we're going to discuss tonight would you know I'm delighted to have it without our microphones this evening one of our most distinguished. Departmental executives Hyman Glick who is our chief accountant who has been in the rent control business almost as long as we have had rent control I click started with the department back in one nine hundred fifty one the state assume the operations of rent control and he's been proceeding ever since for eighteen and a half years prior to that time he had a brief stint with the federal government in the old days when the federal government first got into the rent control business that was during the war years and shortly thereafter so I think it's fair to say that in Hyman Glick we have one of our most knowledgeable civil servants in this area a man who probably knows as much about the accounting end of rent control and of property management does any person in this city and he's been a source of the great assistance an aide to me during my almost three years as commissioner of this department he's very is knowledgeable these. He's always concerned about the public interest and I am delighted to have you at the microphones tonight Thank you Commissioner. Aha yeah you got to probably one of the toughest jobs in our department you had a team of accountants Incidentally how many cans do we have in the shop our staff is forty approximately forty and they perform a job that has from time to time been commented upon by publicly certainly by the landlords occasionally by the tenants and that is the so-called. Hardship increase or fair return increases it's referred to in the trade which permits a landlord who is not receiving a six percent return on the value of his property plus two percent depreciation to come in and get a or rent increase. How many how many applications of that type would do you get in an average year high of. The hardship type application we want about eight nine hundred commission and how many that would be eight or nine hundred buildings of that's correct right and so we're talking what in terms of about nine thousand and eighteen thousand or so. Now I think this whole area has become highlighted somewhat this past week because we all read with some interest that the park Chester development in the Bronx was sold by metropolitan life to a private syndication which I think is deemed to be the largest single real estate transaction ever made I think in the vicinity of a ninety million dollars sale Yeah I read the figures correctly that's right and how many apartments are there in that area in that and in part just. From what I read the papers that they approximate bought twelve thousand three hundred apartments is that correct and those are those are all right controlled apartment Yes they are so I suppose it's possible then that if the landlord or the new landlord feels that he has not been getting the the return that he's permitted on the law they six percent plus two percent for depreciation. I suppose it's fair to presume that somewhere along the line he will come in and apply for rent increases on those nearly thirteen thousand apartments is that right he has the right to do so now I think and it's probably of some interest to the tenants who would be involved in tenants in general in the city how often a landlord is entitled to come in for this so-called hardship increase and what kind of increase can he get how much or how much is a tenant required to pay when such an increase is granted well known or may fall application on there are hardship section the regulation once every two years that is if he's granted an increase in actually in the first application he files. An owner of course cannot receive more than fifteen no can make may be acquired to pay more than fifteen percent. Increase in rent generally under this section so that if a tenant is advised through papers that he receives from the rent office that the owner is seeking a hardship increase it's fair to say that the tenant can be assured that under no circumstances will he be required to pay more than the fifteen percent increase under that application is fair to say so even though. The landlord shows that getting the fifteen percent would not necessarily a bring him to that six percent figure is that right that's right the statute specifically describes that the increase cannot be more than fifteen percent in any two year period and in terms of the in terms of the the six percent figure that we're talking about there's been a good deal of debate in the last couple of years particularly as we went through the rent control procedures last year with the law was extended and where some adjustments were made in the law that the mayor felt would be make a lot fairer to both landlords and tenants in the city there was a good deal of talk about what that six percent figure is based on could you explain to our audience Hi just how we compute that six percent yes again the law defines the value base. Or a property may basis and may use as a six percent return company first exam return computation the value base is generally the assessed valuation of the property in effect the time of farming the application an owner if you acquired property since February first nine hundred sixty one may request that his purchase cost be used as a value base also. Now this use of the purchase cost can only be utilized by though the owners who acquired it probably suffered when the February first one thousand nine hundred eighty one so that let's take the park Chester situation just as an example since it was in the papers this week if the purchase price of that property is to be ninety million dollars then as would you say that the six percent to that would be calculated on the ninety million dollars No No If an application was filed. Relatively soon after the acquisition of property the owner cannot apply requesting his purchase price be used as the six percent return base he must wait as the law demands at least two years before he can request the utilization of his purchase price Yes that's an important point and one I think that was made in the paper is that in order for the owner to use the purchase price certainly in the park jester situation he would have to one of them or wait for two years before making his application so that would mean that the tenants up there for example in that particular project would not be faced with the possibility of a hardship increase based on this new purchase prize for at least two year period however immediately would there be any remedy that the landlord might seek in connection with a hardship increase and the landlord may file not occasion requesting the use of a lower assessed valuation as the six between six percent return base I was I would assume therefore that the owner of park just will have the right to do so any time he saw this are to file an application based on the assessed value as opposed to the purchase price and we know the purchase price here is at least reported to be ninety million dollars I think it's fair to say that the assessed value would be considerably less than that yes it would be probably somewhere in the vicinity of between sixty and seventy million I would presume is correct. Now another question I know that comes in so often to your office as it does to mind our inquiries from tenants as to how often a landlord can come in to our department and seek a rent increase up to fifteen percent on the grounds that he is not getting a six percent return why he may file an application of this type once every two years if he has received an increase and initially in the first application on that basis therefore he is restricted in that he can file once every two years and he can at most receive fifteen percent increases once every two years so that. The landlord who uses this avenue of this route who is legitimately entitled to the increase because he is not getting the six percent return I think if we had when we would try to sum it up a bit he can come in no more often than once every two years is that correct that's right and he may come in and no event get more than fifteen percent increase from any one tenant and in many instances he will get a lot less than the fifteen percent increase that's right now I think you mentioned before that you have you have about forty accountants who work full time on these various applications that come in each year what what type of proof what type of demands do we make in our department on the owners. To prove their case that they are entitled in fact to this hardship increase wellness respect Very think we can be proud for the fact that our examination I feel is a most exhaustive one. Following an application on the early hardship sections of our regulations must in effect prove completely always claimed operating expenses or all the all the client operating expenditures that he presents and the application. Such proof is documented by presentation the bills council checks as it checks as evidence of payment of those bills his books of account his contracts with vendors and all not all of the necessary accounting that would indicate proper some purposes sensationally expenditures that he presents I do feel that the audit review that we make is a very complete one and that the reports that paired by ours are section are quite comprehensive in explaining our findings and I think the results we come up with Ari equable never respect when a landlord does apply for this this increase this hardship increase. Perhaps every two years and in which we get up to a fifteen percent increase from the tenant what notice do the tenants get the fact that the landlord is seeking this remedy and what what rights do the tenants have in connection with this kind of an application while the application that at the UP cases done by a landlord also also has the Lambo is also required to prepare a copy of the application for service upon each of the tenets concerned be turns upon receiving notices application have a right and oppose a answer of their relating their objections to the application itself and also advising the commission of. Any service complaints or other matters that are relative to the building itself. Well what kind of what kind of objections do you generally get from tenants on these harsh about the cations What do they generally complain about while usually at the following these applications at times vies district offices of any service deficiencies and may have been excesses of the maid have been or are in excess of that at the proper in the land is of course required before you can receive any. And any orders and in this innocent location to correct these service complaints well when you say a service complaint you mean wad Well if painting is required and the apartment is long overdue the man will be required to do that if the apartment requires necessary fixing his carpentry Paracel plastering Lambo of the choir to take care of those complaints as they are serious complaints and of course the landlord's entire application may be that may be withdrawn to this list. Hi We're getting near the end of the line just one quick question. We have these thousands of applications that come in per year. Actually that represents approximately what percentage would you say of all of the rent controlled apartments in the city what percentage approximately come in for a hardship application Well I would guess that's a very miniscule percentage knowing that we control over. The nation I believe is one million we have about one million four hundred thousand on that basis and it's considerably less than. One percent or thereabouts you are well actually what you which shows that at least some of the landlords are perhaps not hurting as badly as they would have the public believe in connection with rent control on the other hand we know that certain landlords don't avail themselves of the remedies so it's difficult to judge how many really need this kind of assistance in any event I see unfortunately that our time is just about up and I want to thank you. For being my guest this evening and he do a great job you're one of the people that I'm most proud of in our department and I want to take this occasion publicly to thank you for all of your service and thank you Commissioner thank you Mr Breckon Thank you Commissioner Berman you've been listening to you and your landlord with Frederick S. Berman New York City's rent and housing maintenance commissioner Commissioner Berman's guest tonight I'm going Glick chief accountant of the office of rent control of the department of rent and housing maintenance mistranscribed series is brought to you at this time on the second and fourth Friday of each month and we invite you to join us again two weeks from tonight that's on October eleventh at nine thirty at which time Commissioner Frederick S. Berman will return for another edition of you and your landlord.

Audio courtesy of the NYC Municipal Archives WNYC Collection

WNYC archives id: 151616
Municipal archives id: T4384