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Tenants on Roosevelt Island Denied Appeal in Rent Dispute

New York Law Journal, November 12, 1987

By E.J. McMahon

The State Court of Appeals has refused to intervene in a dispute over a proposed rent increase for about 1,000 tenants at a subsidized apartment complex on Roosevelt Island.

In an order handed down Tuesday, the Court let stand a decision by the Appellate Division, First Department, allowing the State Division of Housing and Community Renewal to promulgate a rent increase for tenants in the Eastwood complex. The complex is regulated under the state’s Mitchell-Lama housing program for low- and moderate-income tenants.

Tenants Sought to Block Rise

Nine members of the Eastwood Building Committee, a tenants’ group, had tried to block a rent increase of $20 a room, which was sought by the owners of the project and approved by the State Division of Housing and Community Renewal in December 1985. About 230 families living in Eastwood have been refusing to pay the additional rent for the last eighteen months while the case was pending.

The housing agency had determined that the rent hike was necessary to cover increased expenses and “would not cause substantial displacement” of tenants. The tenants group said the state agency was required by its own regulations to provide more detailed information on the reason for the increase and its potential impact on building residents.

The tenants won the first round in the case in 1986 when State Supreme Court Justice Louis J. Grossman of Manhattan vacated the increase and sent the issue back to the housing agency for further consideration of the increase’s economic impact. But the Appellate Division reversed Justice Grossman in May, ruling that the agency determination in favor of the rent increase was “legally sufficient on its face.”

Open Conference Required

The housing agency was required only to conduct an open conference rather than the quasi-judicial proceeding that was part of the precedent cited in the lower court decision, the Appellate Division said in a memorandum (In Re Eastwood Building Committee, NYLJ, May 29, 1987).

In reaction to the Court of Appeals decision, Commissioner William B. Eimicke of the Division of Housing and Community Renewal said he was “pleased that the state’s open conference approach to rent determinations for Mitchell-Lama housing has been upheld by the courts.”

“The conference approach has provided greater access to all parties and thus has proven to be a fairer method for the state to decide rent levels,” Mr. Eimicke said.

Jay B. Itkowitz, attorney for the tenants group, said his unsuccessful motion for leave to appeal had not challenged the agency’s open conference approach but instead focused on the claimed need for a more detailed economic impact statement.

“The state can be an engine for creating homelessness by displacing families,” Mr. Itkowitz said. “If they’re not going to look at the economic impact (of rent increases) there’s no real safety net for low- and moderate-income families.”