For Immediate Release:
Contact: Susan Lerner
June 24, 2011
Common Cause NY:BIG MONEY SPENT IN ALBANY TO INFLUENCE HOUSING POLICY
RENT REGULATION AND THE 421A SUBSIDY
CC/NY Executive Director Susan Lerner: "Follow the money from real estate power players when analyzing the new rent regulation bill"
Common Cause NY (CC/NY) remains concerned about the role of vast sums of money being spent by various constituencies in New York State to influence public policy. This concern is focused across the board, covering both progressive and conservative causes, both union and business expenditures.
In the debate over revising and renewing rent regulations and the 421a subsidy for New York City in the State capitol, the public is correct to ask what impact large campaign contributions made by powerful real estate interests have on that debate. A review by CC/NY of the most powerful New York City real estate interests' campaign contributions reveals almost $10 million ($9,656,372.64) spent on campaign contributions in 2009 and 2010 on state and local elections by the individuals and organizations included on the NY Observer's annual "Power 100 in Real Estate" list, as well as all Officers of the Real Estate Board of New York (REBNY) not included in the list (for the full list click here). This represents a huge increase from the roughly $5.4 million that the same interests spent in 2007-2008.
Susan Lerner, CC/NY executive director, noted, "Our analysis shows that the real estate industry invests not only in properties, but also in public policy through significant campaign contributions to both Republicans and Democrats running for state and legislative office. Like all good business people, they expect a return on their investment. We leave it to those directly involved in the issue to determine whether the bill that grew out of this free-spending environment indicates that Albany chose to prioritize the affordability of housing for working and middle class New Yorkers or the profits of the real estate industry.
"It is past time for New York State to adopt a public funding of elections system, to restore the public's faith that important issues, such as rent regulation, are determined without the oversized influence of special interest money."
The key issues in this bill for the real estate industry are rent control and the extension of the 421-a tax break.
The 421-a tax break is a 10-25 year exemption from property taxes for new residential developments intended to help produce affordable housing*** throughout the city. The cost of this tax break for residential building owners to the City in the fiscal year just ending, FY2011, is $920 million1 - a 700% rise from the $130 million2 it cost just nine years ago, in 2002.
Ms. Lerner asked, "Is this a reasonable cost for the affordable housing 421-a was supposed to encourage? In 25 years of this expensive tax break for wealthy interests, fewer than 10,000 affordable units have been created by 421-a3 while almost 200,000 apartments affordable to average New Yorkers have been lost4 Under the influence of special interest money, this question is glossed over."
Most of these almost 200,000 apartments were lost due to "vacancy decontrol" - the removal of rent stabilized apartments from the stabilization system that is permitted to occur when a rent-stabilized apartment is vacated and the landlord can find a new tenant for $2,000 a month or higher.
With both policies up for extension in 2011, the real estate industry's most powerful players spent poured money into the 2010 elections, when all legislative seats and statewide office were on the ballot. Real estate industry donations cut across party lines and target politicians in positions of power - the Governor, the Senate Majority, and the Assembly Majority (see table below). Under the current framework negotiated in Albany, the 421-a tax break will be extended another four years with no modifications, and rent control laws will be only slightly strengthened.
3 Seth B. Cohen. "Teaching an Old Policy New Tricks: The 421-A Tax Program and the Flaws of Trickle-Down Housing." Journal of Law and Policy 16.757 (2008). http://www.brooklaw.edu/intellectuallife/lawjournals/journaloflawandpolicy/volumes/volume16/Issue%202.aspx
4 According to HPD's Housing and Vacancy Survey, from 2002-2008, New York City lost 194,577 apartments affordable to those making 80% AMI or less (roughly $40,000 a year). This is a 16.4% decline in the total stock.
REAL ESTATE POWER PLAYER
CAMPAIGN CONTRIBUTIONS 2009-2010
For additional details, including specific canadiates click here
(all state and local races in New York)
TOTAL DEMOCRATIC PARTY
TOTAL REPUBLICAN PARTY
TOTAL INDEPENDENCE PARTY
TOTAL CONSERVATIVE PARTY
TOTAL WORKING FAMILIES PARTY
TOTAL OTHER THIRD PARTIES/PACS/CAUSES
TOTAL DEMOCRATIC GOVERNOR
TOTAL REPUBLICAN GOVERNOR
TOTAL NY STATE SENATE (CANDIDATES + SOFT MONEY)
NY STATE SENATE DEMOCRATS
NY STATE SENATE REPUBLICANS
NY STATE SENATE CANDIDATES
SENATE DEMOCRATIC CANDIDATES
SENATE REPUBLICAN CANDIDATES
NY STATE SENATE SOFT MONEY
STATE SENATE DEMOCRATIC SOFT MONEY
STATE SENATE REPUBLICAN SOFT MONEY
TOTAL NY STATE ASSEMBLY (CANDIDATES + SOFT MONEY)
NY STATE ASSEMBLY DEMOCRATS
NY STATE ASSEMBLY REPUBLICANS
NY STATE ASSEMBLY CANDIDATES
ASSEMBLY DEMOCRATIC CANDIDATES
ASSEMBLY REPUBLICAN CANDIDATES
NY STATE ASSEMBLY SOFT MONEY
STATE ASSEMBLY DEMOCRATIC SOFT MONEY
STATE ASSEMBLY REPUBLICAN SOFT MONEY
For more information contact Research & Policy Coordinator Brian Paul at 212-691-6421 x206 or firstname.lastname@example.org
Office: Common Cause New York
Common Cause is a nonpartisan grassroots organization dedicated to upholding the core values of American democracy. We work to create open, honest, and accountable government that serves the public interest; promote equal rights, opportunity, and representation for all; and empower all people to make their voices heard in the political process.