A Vote Against a Rent Freeze Means New York Is Still Run by and for the Rich

By six on Monday evening, the diverse crowd assembled on the corner of Third Avenue and Seventh Street in Manhattan's East Village to demand a rent freeze was just about ready to explode.

New York City seemed to be on the verge of making history, as the Rent Guidelines Board (RGB), a majority of whose nine members were recently appointed by liberal mayor Bill de Blasio, were set to meet inside at Cooper Union's Great Hall. This was no ordinary meeting: At a press conference earlier that day, de Blasio had freshly indicated his support for a rent freeze, which would be the first time since the body was established in 1969 that rents in stabilized apartments didn't go up. Rent stabilization is New York's way of protecting housing for the lower and middle classes from the worst impulses of the market—if you live in a stabilized apartment your landlord can't raise your rent above a percentage set by the RGB each year, and generally your landlord has to renew your lease. This sort of housing is a precious commodity in our age of unbridled financial capitalism, and it's often the only way the non-rich can afford to live in gentrifying neighborhoods; 47 percent of NYC's total housing stock was rent-regulated in 2011.

The idea behind a rent freeze was pretty straightforward: It would protect the working poor and retired population from yet another painful hike in housing costs, a goal that happens to be of a piece with de Blasio's "tale of two cities" campaign mantra decrying the incredible wealth gap that's a fact of life in the 21st century. His comments on Monday indicated that mayor was finally ready to put his money where his mouth was.

"The facts are with us," one feisty organizer yelled to cries of agreement in the run-up to the vote. "The message is with us. The mayor is with us. We have the forces aligned. Today is our moment. Today is our time."

With de Blasio on board, it looked—if only for just a second—as if the activist left had the business establishment on the run in New York.

But renters got burned in the end, losing the key vote five to four. Instead of a freeze, renters will be faced with an increase of 1 percent for one-year leases and 2.75 percent for two-year leases—a reminder that de Blasio, who sold himself as a progressive trendsetter, is in fact a transactional politician with close ties to the real estate industry, and almost certainly not the radical change agent many of his supporters hoped for.

"I can't even imagine a rent freeze," a retired courier named Diane, who barely stays afloat in a rent-stabilized apartment in East Harlem, confided to me before the vote. When I mentioned that both de Blasio and Public Advocate Letitia James supported a freeze, she was quick to retort, "I don't think that the politicians are going to allow that. I think that they, uh—I don't know how to put it without sounding crass—that they're on the payroll of the real estate lobby."

Put plainly, New York is, and has always been, run by the rich. Even when progressives have power, they're seemingly terrified of wielding it. We saw this on a national level with Barack Obama in late 2008 and early 2009, when instead of taking on Wall Street in the wake of the global financial crisis he decided to coddle it, appointing a crew of former bankers like con artist Tim Geithner to set national economic policy. Likewise, de Blasio apparently had no stomach for a messy fight with New York City's real estate interests—or at least that's the only way I can make sense of his waiting until just hours before the vote to back the freeze he campaigned on, rather than leveraging his considerable base of supporters or, you know, explicitly telling the people he installed on the board to vote for it.

"It's the difference between the economic interests of the oligarchy that finances the Democratic Party and the interests of the people who vote for it," said Joel Kotkin, professor of urban development at Chapman University and author of the forthcoming book The New Class Conflict.

Ultimately, two of de Blasio's six appointees backed the rent hike. One, Sara Williams Willard, is a landlord—the industry gets a few seats at the table—and thus hardly a surprise. But the more conflicted was Steven Flax, vice president for community reinvestment at M&T Bank, who was supposed to be there representing the public. He was clearly in agony during the meeting and called the vote "a nightmare" while slamming the "disingenuous" process and explaining that his "intention was to push the conversation to the center-left position," apparently annoyed at having to go on record against a freeze. Flax nonetheless felt compelled to remind the pesky renters screaming at him from all sides, "It costs money to run buildings!”

In fact, the data assembled by RGB Chair and Seton Hall law professor Rachel D. Godsil shows that landlords who own rent-stabilized apartments spent just 60.5 percent of revenue on operating and maintenance costs in 2012, which suggests that they aren't exactly facing the poor house—unlike some of their tenants.

The Board is one of the few power levers that de Blasio can wield pretty much by himself. But instead of appointing rock-solid backers of a freeze, or leaning on Flax to vote for one, he appears to have gone soft, legitimizing many progressives' worst fears about the mayor, who has maintained close ties with powerful developers like Bruce Ratner over the years. (It was also hard not to notice that the RGB is lily-white while the crowd pleading for a freeze was mostly black and brown.)

To be sure, the rent hike the RGB ultimately approved is historically low. Presumably the emergence of de Blasio is what made that possible, and his supporters will point to the vote as a sign that change isn't easy. But recently departed Mayor Michael Bloomberg's name was still the one being hissed by angry activists at the meeting, a testament to the left's failure (so far at least) to apply any pressure on de Blasio to keep his campaign promises. If he doesn't fear being held accountable by those who voted for him, de Blasio has little incentive to appoint unabashed champions of affordability—of which there were one or two, including Sheila Garcia, a fiery tenants organizer at Community Action for Safe Apartments—to key bodies like the RGB. He's too calculating to give up the goods without a fight.

So even if Monday was supposed to herald the start of something new in the city, for now, at least, de Blasio's New York looks like Bloomberg's—it's easy to find advocates speaking on behalf of policies that would benefit the poor, but harder to find people in power who agree with them.

"It's very disappointing," Park Slope City councilman and "shadow speaker" Brad Lander told me immediately after the vote. "This was the year to do a freeze."

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