Talking: Rent Freeze; A Boon To Aging Tenants

ONE in seven New York City residents, slightly more than a million people, is now at least 62 years old, according to the Census Bureau. Although many may be eligible for a rent freeze, too few bother to apply, according to the city’s Department for the Aged.

And that’s a pity. A recent relaxation in eligibility requirements and an increasingly aging population may have produced more qualified tenants than ever before. In some cases, lack of participation comes from ignorance; the tenant simply doesn’t know about the benefit. And landlords have no incentive to remind them.

The city’s growing population of foreign-speaking people may also account for lack of participation, officials say. In other cases, fear may inhibit action. "Too many tenants are still afraid their landlord will get angry and force them out if they apply," said Helene S. Wolff, a spokeswoman for the Department for the Aged.

Landlords say such an attitude has no basis in logic. "Older people are some of our best tenants," said Roberta Bernstein, president of the 1,000-member Small Property Owners of New York. "They don’t destroy anything. They pay on time. They don’t have noisy children running around." Besides, she added, the landlord is offered a dollar-for-dollar compensation from the city for every tenant whose rent is frozen. The compensation is either a credit toward real estate taxes or a cash reimbursement, or both in some cases.

But a word of caution to tenants: A landlord’s eagerness to hold on to an existing tenant who applies may not extend to incoming ones eligible for the same benefits. Maurice Mann, owner of some 600 rental units, maintains that the "horrendous delays and mounds of paperwork" involved in actually getting some of the compensatory refunds has made some landlords reluctant to take on newcomers who might fall into the rent-freeze classification.

Once again, it’s a pity, because a class-action suit may soon make rebates and refunds easier to get. Thus landlords should not be too quick to dismiss the idea or forgo the eligible tenant. How much of a benefit is actually at stake? And how does it work for both landlord and tenant? The city’s rent-reduction program should be available to anyone 62 years or older with a net annual household income (less income taxes and union dues) of $16,500 or less.

Before June 1992 the program had an income ceiling of $15,000. The person must also be living in a rent-regulated apartment. Anyone meeting these requirements must also be paying rent that consumes a third or more of monthly income.

If, for example, a 64-year-old woman had a monthly income of $1,300 and was spending $600 on rent she could have her rent frozen at that level and be exempt from future increases. Such a freeze would not cover increases the landlord is permitted to pass along as a result of new services, such as a night doorman, but it would cover normal lease renewal increases plus unexpected spikes resulting from a fuel adjustment increase or major capital improvements to the building.

The tenant should begin by calling the hot line set up for inquiries about the city’s Scrie (Senior Citizens’ Rent Increase Exemption program), as it’s called. The number is: (212) 240-7000. If it’s busy or there is no reply, Joseph Barnes, director of benefits and entitlement for the department, suggests calling (212) 442-1000, the general referral number for the department.

After preliminary discussion with a counselor to determine whether the elderly person is indeed likely to qualify, the applicant will be mailed a form and asked to supply supporting documents, such as a lease showing current rent and proof of age and income. The form must be returned to the department at 150 William Street, N.Y. 10038. THE department will notify the landlord directly if the tenant qualifies, giving the landlord details of the level at which the rent will be frozen. The landlord should also get a tax-abatement certificate equal to the losses incurred from an inability to raise the rent. This voucher can be used in lieu of cash for real estate taxes.

For example, if the landlord has a shortfall of $3,000 a year because of Scrie tenants, he would be eligible for a $3,000 certificate toward payment of the building’s property taxes. Moreover, if the building has so many qualified tenants that the credit exceeds taxes due, the landlord could request the excess in cash, though actually getting the check in the mail is a very different story.

Consider what happened to Barbara Kraebel, a lawyer who owns a 16-unit building in Upper Manhattan and has four Scrie tenants. In 1990, after she failed to get about $2,000 in refunds, some of which were two years overdue, she sued the city in Federal District Court in Manhattan, contending that prolonged and repeated delays represented discrimination against property owners who could no longer collect those dollars directly from their tenants.

The suit is still pending (although Ms. Kraebel eventually received her refund). Meanwhile, other landlords facing similar delays have persuaded the Atlantic Legal Foundation, a group that fights for citizens’ rights, to take up the issue. The foundation began its own class-action suit against the city in December.

It reckons some 1,200 landlords have overdue refunds pending, while dozens more may have become too disheartened to even go through the time-consuming exercise of gathering the additional paperwork — or badgering the department. "Too many landlords have been subjected to unnecessary and unconscionable delays," maintained Martin S. Kaufman, the foundation’s general counsel, who is handling the case. Not so, says the department. "We deny all the claims," said Susan Shapiro, assistant corporation counsel in the city’s Law Department.

Any landlord interested in information concerning any judgment or settlement in the foundation’s class-action case should call Mr. Kaufman at (212) 573-1960 and asked to be placed on the mailing list. Eligible tenants may also wish to contact the New York State Department of Taxation and Finance. It has a program that can top up any SCRIE benefits with a cash allowance. Called "IT 214," the program can provide up to $375 a year to tenants over 65 who have a gross household income of $18,000 or less. Call (800) 462-8100 or (212) 635-0203 for details.