After Amazon – New York’s Coming Rent Laws Battles

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Working people in New York have been growing increasingly angry about the skyrocketing cost of housing  — and rightly so. Rental prices have shot up far beyond the rate of wage growth, fueling the popularity of left leaders like Alexandria Ocasio-Cortez and opposition to the now-defeated deal between the bosses at Amazon and New York’s political establishment.

Now, with a big battle brewing around the expiration of the state rent laws this June, the potential exists for the biggest mobilization of working class tenants in decades. At the same time, a new Democratic majority in the State legislature has raised hopes that bold reforms to the state rent laws will be passed without much of a struggle.

Nothing is guaranteed. New York Governor Andrew Cuomo and the real estate lobby are both ramping up attacks on left organizations and lawmakers in the aftermath of the collapse of the Amazon deal. Mass mobilizations will be needed to ensure the strongest possible reforms are won.

Cuomo and the State Legislature

Housing groups are pushing hard to expand rent regulations statewide and close a number of loopholes in the law, including “vacancy decontrol,” which allows for the deregulation of rent-stabilized apartments when the legal rent reaches $2,733.

When the rent laws have come up for renewal in the past (which happens every three to five years), landlords and establishment politicians have often used it as an opportunity to create new loopholes in the laws in the interests of real estate developers and big landlords. When the rent laws were last renewed in 2015, the current system was effectively preserved, with just a few minor tweaks that have done little to solve New York’s housing crisis.

But going into the 2019 rent law battle, tenants groups find themselves on surer footing. Decades of capitalist crisis, a global boom in luxury development, and skyrocketing rents have stoked the anger of working people.

Against this backdrop, the election of a new Democrat-controlled legislature in November has raised enormous hopes that strong rent reforms will be passed this year without much struggle.

The campaign for “universal rent control,” led by a statewide coalition under the banner of Housing Justice for All, has the support of a number of newly elected left-leaning Democratic politicians. This includes State Senators Zellnor Myrie and Julia Salazar as well as others in the state legislature who have renounced real estate donations and committed to fight for rent reform.

Even Cuomo, long a thorn in the side of progressive activists of all stripes, has opportunistically shifted his position and come out in favor of two reforms (at least for now): ending both vacancy decontrol and the “preferential rent scam,” a loophole that allows landlords to charge a rent below the legal rent and then raise it to the legal rent when the area becomes more desirable.

But these shifts do not make rent reform a sure thing, especially in light of the hundreds of thousands of dollars the real estate lobby donated to Cuomo in 2018 alone. The Real Estate Board of New York (RENBY) and other pro-landlord groups are gearing up to fight these reforms, warning of a return to the neglect and decay of the 1970s and 1980s if landlords are not given free rein to squeeze every last penny from tenants.

Aftermath of the Amazon Deal

The stunning defeat of the deal between Amazon executives and New York’s political establishment will boost the confidence of tenants going into the rent laws battle.

The collapse of the deal was a setback for Cuomo and the real estate industry who stood to benefit from booming property values.  Cuomo has called the deal’s collapse “the biggest tragedy” in New York politics in his lifetime – nevermind September 11th!

The establishment is furious with the left and are looking to punch back, viciously attacking Alexandria Ocasio-Cortez and others as “job killers.”

Socialist Alternative has warned this cynical campaign can have an effect. There were widespread hopes among an important section of working people that the Amazon deal would bring good jobs and other benefits.

It is important that the movement boldly challenge Cuomo’s misleading claims and not give in to his pressure. The deal has always been presented by Cuomo as simply a benefit “for all New York.” But the reality is the benefits would have been just as unequal as the city itself. The billionaire real estate developers stood to make a windfall, while working people would see rising rents and displacement.

Cuomo often repeats his rosy estimates that the state would have made $27 billion in new tax revenue over the next ten years. However, in the last decade New York has a seen massive increases in investment from big business and developers, yet the Metropolitan Transportation Authority (MTA) is still broken and New York City Housing Authority (NYCHA) still needs $25 billion for basic repairs. Where have the benefits of the last ten years gone?

As for jobs, Seattle’s experience shows that there is no guarantee that jobs offered by the deal would go to working class New Yorkers. The executives at Amazon are more interested in hiring top talent attracted to an urban environment rather than benevolently creating jobs for working people in Queens.

If Amazon and big business will only invest on the basis of handouts, union busting, and refusing to give working class communities any democratic say over development of neighborhoods, then we clearly need an alternative. That could start with taxing Wall Street and the more than 100 billionaires who live in New York state. Surely they could afford to pay more to help create thousands of good unionized jobs through a fully funded public sector and jobs programs fixing the MTA and NYCHA.

Appeasing Cuomo

Democratic Party leaders in the legislature are trying to appease Cuomo. This is a mistake. Andrea Stewart-Cousins, the Senate Majority leader, rescinded her appointment of State Senator Michael Gianaris to the Public Authorities Control Board, the state agency that can veto the project.

The appointment of Gianaris, one of the most outspoken lawmakers against the deal, triggered the collapse of the deal. If Stewart-Cousins appoints someone more favorable to Cuomo, it cannot be ruled out that the Amazon deal, handouts and all, comes back on the table.

Seattle’s experience with the Amazon Tax in 2018 should serve as an important warning. After the city council unanimously passed the widely popular measure that increased taxes on Seattle’s biggest business to fund affordable housing, the Amazon bosses threatened to cut 8,000 construction jobs in the city. Like the opposition in New York, the Seattle City Council was attacked as “job killers.”

Rather than mobilizing working people to push back against the bullying of Amazon executives, the majority of the Democratic Party members on the Seattle City Council secretly worked out a deal with the Mayor to appease Amazon. They rammed through a repeal of the tax barely a month after passing it.

If a similar thing happened in New York, it would be demoralizing and would weaken the ground for the coming rent laws battle. This should underline the importance of immediately mobilizing against Cuomo’s campaign against the left.

Mass movement strategy needed

In the fight for universal rent control, mass mobilizations will be critical. Even the most genuine left representatives will not have an effective counterweight to Cuomo or the real estate industry without a mass movement at their back. In reality, our ability to win change inside the legislature depends on the strength of working class movements outside.

Brooklyn State Senator Julia Salazar, a member of the Democratic Socialists of America, has put forward a bill that could pave the way for universal rent control. The bill would amend the state rent laws to prevent evictions statewide based on rent increases above 150 percent of the Consumer Price Index.

If passed, it would be a huge blow to the opposition to universal rent control. It’s possible it could win enough support in the legislature. But if Governor Cuomo pushes back, then mass action will be needed. Unfortunately, Salazar has not based herself on a strategy of using her position to build mass movements.

Salazar has largely oriented her efforts towards working with the Democratic Party leadership in the Senate. Stewart-Cousins and the vast majority of Democratic Party politicians are certainly better than the Republicans, but they are still tied to the corporate establishment in various ways. For example, Stewart-Cousins takes campaign contributions from big business and developers.

The main thing holding back more powerful mass movements in the U.S. are the illusions in the Democrats promoted by the vast majority of labor and left leaders. Socialists and left leaders need to challenge these illusions and warn people not to rely on the Democratic Party leaders.

People are electing socialists to office because they want an alternative to the tepid leadership of the Democratic Party mainstream. It doesn’t help us to elect socialists only to point working people back to the very people who have been part of the problem.  

We would encourage Salazar and other left leaders to break with the Democratic Party leadership and boldly build a socialist opposition in the state legislature based on building mass movements outside it.

Labor must break with Cuomo

Housing groups have broad support for their demands this year. The housing movement has always been at its strongest in the past when it had connections to a radical labor movement, rooted in the organized power of working people.

We need to win New York’s powerful labor leaders to throw their weight into this fight. Teachers, transit workers, airport workers, health care workers, and others all need to be able to afford to live in their communities.

Unfortunately, the vast majority of labor leaders in New York support Cuomo, despite his clear allegiance to big business. There is urgent need for a campaign in the labor movement to push for a break with Cuomo.

This would lay the basis for an even stronger and more united working class movement to pass strong rent reform, strengthen workplace rights, pass the New York Health Act, and pass taxes on big business and the rich to create unionized job programs and fully fund public services, the MTA, and NYCHA.

Even without labor’s support or mass mobilizations, it is still very likely that some package of rent reforms will be passed. This would be a huge victory for the movement.

Beyond that, the campaign for rent reforms will spark wider debate over the housing crisis, which could draw in thousands of people beyond the activist layer into discussion about these issues. This can create more favorable conditions for strengthening the movement for battles to come.

On the other hand, the political environment in the state capitol does not guarantee victory, especially in the aftermath of the Amazon deal’s collapse. It cannot be ruled out that Cuomo reverses his support for ending vacancy decontrol and preferential rents. This could provoke a clash with more left wing sections of the Democrats in the legislature and pose much more sharply the need for a mass action.

Socialist policies needed

Big business, big landlords, real estate developers and corporate-backed Democrats have shown time and time again that they will not cede even an inch to tenants without mass resistance and struggle. Furthermore, even the strongest rent regulations cannot guarantee affordable housing on the basis of a capitalist system that treats housing as a commodity instead of a basic right.

We need to keep building the housing movement, run more socialist candidates to challenge pro-corporate politicians, and ultimately build a new party that’s completely committed to fighting for working class communities. Critical to this is rebuilding the power of the labor movement and fighting for a socialist program that puts people before profit.

Wall Street and big developers have used their control over vast resources to turn New York into a playground for the rich. We need democratic control over resources so that working people have a real say over our communities. This was one of the biggest problems with the Amazon deal. The company wanted to dictate terms to working class residents instead of genuinely allowing working people the right to have a say in the development of their community.

Amazon, the biggest banks, real estate companies, and construction companies all use their control over enormous resources for the profits of a few. By taking these biggest corporations into public ownership and placing them under democratic control of elected committees of workers and the public, we could reign in their ability to bully our communities and instead plan development in a genuinely democratic way. Instead of housing being a constant flashpoint of struggle, a socialist society would finally guarantee quality affordable housing for all.

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