Testimony by New York State Senator Thomas K. Duane before the New York City Department of Housing Preservation and Development Regarding The Proposed Clinton Towers' Maximum Permissible Rent Increases

July 2, 2008

My name is Thomas K. Duane and I represent New York State's 29th Senate District, which includes Hell's Kitchen and the Clinton Special District, in which 790 11th Avenue, known as "Clinton Towers," is located. Thank you for the opportunity to submit testimony before the New York City Department of Housing Preservation and Development (HPD) regarding the petition by Clinton Towers Housing Company, Inc. (CTHC) to raise maximum permissible rents at Clinton Towers on account of increased fuel, maintenance and other operating costs.

While I recognize that CTHC has a need to offset these costs, I am very concerned about the scale of the proposed rent increases. Clinton Towers is one of the few remaining Mitchell-Lama buildings in my district and serves as an integral part of the neighborhood by providing affordable housing for working people. The rent increases proposed by CTHC amount to more than 30% over the next two years. This extraordinary net increase will undoubtedly be a burden on the low- and moderate-income tenants, who are unlikely to see increases in their own incomes during the same period that are even remotely commensurate.

Hell's Kitchen has long been an economically and socially diverse neighborhood. However, due to gentrification, working people have found it harder to find affordable housing apartments in the marketplace in the area; Clinton Towers and buildings like it have become that much more important in maintaining the character of the neighborhood. A 30% rent increase would make Clinton Towers unaffordable both for many prospective as well as current low- and moderate-income tenants, and should therefore be an option of last resort

As I have discussed with members of CTHC, it is my opinion that before a rent increase is implemented, alternate means of funding and opportunities for tax abatements and cost savings should be explored through consultation with various State and City agencies including HPD as well as the New York State Energy Research and Development Agency (NYSERDA), New York City Housing Development Corporation (HDC), and New York State Department of Housing and Community Renewal (DHCR), and I have strongly suggested that they do so. In addition, the non-profit affordable housing advocacy organization Housing Conservation Coordinators (HCC), which has worked with the building for many years and is representing the tenants in this action, has presented a similar list of possible options to the members of CTHC for review. Next month, I, along with other elected officials, HCC, the Clinton Towers Tenants Association, CTHC and Clinton Towers' managing agent, P & L Management, will meet with representatives of NYSERDA, HPD, and DHCR to discuss the variety of options that may be available to Clinton Towers. Certainly, a topic of interest to everyone will be the $3 million loan that CTHC has applied for from the HDC. Another topic of interest will be exploring cost-effective programs such as the DHCR's Weatherization Assistance Program and those offered by NYSERDA to realize the energy-saving actions such programs will enable. I am hopeful that with the expertise of and technical assistance from everyone in the room, we will be able to find sources of funding and opportunities for operating efficiencies that will lower costs and that can stave off excessive rent increases for now and will not burden CTHC and the tenants as severely in years to come.

It is likely that, as discussions continue in the coming months, other crucial matters will be brought up in the context of the proposed rent increases. These include the need for an agreed upon, closely-supervised plan to address the many repairs and fixture replacements that are needed throughout the building. Such a plan should provide a timetable for future replacements and their projected costs as well as ensure that the building is properly maintained so as to improve the tenants' quality of life and forestall or limit preventable expenses in years to come. In addition, the Clinton Towers Tenants Association and its attorneys have brought up a host of concerns regarding CHTC and P&L Management's operation of the building, and questioned statements made by CHTC in its rent increase request that I expect will be explored by the appropriate stakeholders, including HPD, while the rent increase application is being examined.

I have offered and will continue to offer my assistance to facilitate a solution that is amenable to both CTHC and the tenants of Clinton Towers. I believe there are ways both to fix the problems in the building and ensure its existence as affordable housing for Hellfs Kitchen residents long into the future. I urge HPD to withhold action on the rent increase application until all alternative sources of funding and cost savings have been explored and exhausted. Thank you for your time and consideration.

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