Good Riddance CHIP

David Goldsmith

All Powerful Moderator
Staff member
CHIP has been behind a disinformation campaign regarding HSTPA of 2019. They have lied about renting vacant RS units and many other things. So I'm not going to lose any sleep over this:


Cash burn driving landlord group CHIP toward insolvency​

Blames red ink on winding down fundraising ahead of merger with RSA

When The Real Deal reported in August that two New York City landlord groups were considering merging, the rationale seemed to form a united front for owners of rent-regulated buildings.
But the plan may also be a rescue mission, according to an internal report.

The Rent Stabilization Association and the Community Housing Improvement Program are poised to combine their lobbying efforts and membership. The talks have largely happened behind the scenes, but a report by PKF O’Connor Davies for RSA, pulls back the curtain on the deal’s financial considerations.
For one, the October report concludes that without financial help, CHIP might cease to exist within six months.

The accounting and tax advisory firm’s report, obtained by The Real Deal, found CHIP’s cash burn is driving it toward insolvency. The company spent $10.1 million but only took in $8.4 million in the 30 months ending in June 30.
The income included a $655,000 infusion from RSA, without which, the report notes, CHIP would have been “nearly insolvent.”
CHIP Executive Director Jay Martin acknowledged that the group has always been a small operation that has worked “hand to mouth.” However, he said the group’s lopsided financials are a result of a conscious decision to wind down operations and fundraising.
There is considerable overlap between the organizations’ boards and membership, and getting members to pay two sets of dues was becoming increasingly untenable, he said.
At the same time, CHIP maintained what Martin called “aggressive” lobbying efforts. The $655,000 from RSA was dedicated to CHIP’s campaign to pass a bill that would allow landlords to resent rents in some vacant stabilized apartments.

CHIP does not see the need to join RSA with a stash of cash on hand, its executive director said.
“I wish it would have happened sooner, frankly,” Martin said of the merger. “The industry probably would have been in a better position if this happened before 2019.”
He was referring to a 2019 rent law reform that rocked owners of rent-stabilized buildings.
RSA President Joe Strasburg would not comment on the report, but said merger talks are ongoing. He echoed Martin’s comments, noting that the groups have similar interests and share members.
“I’ve always believed, historically, that there should have been a merger a long time ago,” he said.

Zachary Kerr, president of CHIP, sent a statement on behalf of the group’s board of directors, saying that as many rent stabilized owners face foreclosure or are forced to sell their buildings, combining “ideas and resources into a new unified organization is necessary to organize the industry to survive in the current hostile environment against our businesses.”
He noted that both RSA and CHIP commissioned reports about combining.
“To the surprise of no one involved in the merger, the due diligence reports highlighted that CHIP is the smaller of the two groups financially, and has significantly less financial resources than RSA does,” he said. “Not only do we view a single unified voice advocating on behalf of our members the best financial interest of our membership base, we also view it in the best interest of the rent-stabilized housing community as a whole.”
The report indicates that 80 of CHIP’s 152 dues-paying owner and manager members are also part of RSA. The groups both represent rent-stabilized landlords and teamed up to challenge New York’s rent law by filing a petition with the U.S. Supreme Court. The court declined to hear the case in November.

The report also identifies “weaknesses” in CHIP’s financial reporting practices and says the organization needs to change how it tracks membership dues and who is responsible for accounting tasks. The group’s project manager, according to the report, handles many of these tasks without adequate oversight.
CHIP’s major expenses include a campaign to appeal to the city’s Rent Guidelines Board, which sets the rent increases allowed on stabilized apartments, and another for legislation that would allow a one-time rent reset on a vacant stabilized unit. Neither campaign appeared especially successful: The rent bill was introduced but gained little traction, and rent increases approved by the board disappointed both tenants and landlords.
The group’s revenue comes largely from membership dues and various fundraising events.
Arguments for merging with RSA include the overlap in members and policy initiatives. Combining the organizations would also mean members would not need to choose between the two or pay two sets of dues.
The groups, however, have different leadership styles and approaches to city and state politics, with CHIP being more vocal and RSA staying behind the scenes. It is not clear what a merger would mean for Martin, whose group was founded in 1966 but is much smaller, or for Strasburg, who was hired to lead RSA in January 1994 after 15 years in City Council staff positions.

Both organizations would gain something from the merger. For CHIP, the move would mean larger membership and access to the spending power of RSA, which last year reported $7 million in revenue and $51.6 million in net assets.
CHIP has built up its profile over the past four years under Martin, who has pushed the industry to change its approach, including by adopting the strategies of tenant advocates, such as door-knocking and flooding social media.
If a merger is completed, it would likely occur next year. The report notes that integrating the two groups would take several months.

 

David Goldsmith

All Powerful Moderator
Staff member

Why landlords kept unpaid rent plan secret from tenant groups​

CHIP went solo when it pitched an alternative to housing court

As an alternative to the madness of housing court, a landlord group pitched a mediation program on Monday and called for tenant advocates to support it, rather than consult with them in advance.
That was no accident.

The Community Housing Improvement Program felt burned the last time it shared an idea with the Legal Aid Society of New York City and Housing Justice For All.
“We had conversations that we thought were going well,” CHIP’s Jay Martin said. But when state legislators introduced the resulting bill, which aimed to increase rents of dilapidated vacant apartments enough to fund repairs, tenant groups falsely claimed it would remove 500,000 units from rent regulation and put New Yorkers on the street.

“I didn’t expect them to say that,” Martin said in a phone interview.
This time, CHIP pitched a voluntary “eviction diversion program” based on others in Philadelphia, Maryland, Indiana, Hawaii and New Jersey. It would allow tenants who fall behind on rent to go to mediation — if the landlord agrees — rather than housing court, which has been bogged down by a huge case backlog since the pandemic.
The premise is that the vast majority of eviction filings are for unpaid rent and call for a financial planner to craft a payment plan, not a judge to resolve complicated legal issues. From January through October, about 84 percent of the 106,000 eviction filings in New York City were for nonpayment, according to CHIP. Just under 10,000 evictions were carried out during that time.
Mediation would allow the two sides to work something out without the expense, delays and dysfunction of housing court. Both sides would benefit, Martin argued.
But Ami Shah, deputy director of housing at Legal Services NYC, said in a statement, “Eviction cases are hardly ever only about money and a certified financial planner cannot safeguard tenants against bad acting landlords failing to hold up their end of the bargain, such as landlords who illegally overcharge tenants, refuse to acknowledge a building’s regulatory status, or neglect buildings and fail to provide essential services or make repairs.”

Also, housing court’s dysfunction helps tenants because they can drag out cases for years without paying rent. Tenants’ lawyers also get paid by the city and state’s right-to-counsel programs, while landlords have to pay their own legal bills — typically $1,000 or $2,000 for a basic nonpayment case, Martin said.

Predictably, Legal Aid, Housing Justice for All and other tenant representatives oppose CHIP’s proposal. The Right to Counsel Coalition said in a statement that mediation would undermine tenants’ right to free legal services when facing eviction.
“Putting in place a mediation program in NYC, where tenants already have the right to an attorney, does not make sense,” the statement said. “With mediation, landlords would still be represented by their attorneys and tenants would enter the ‘mediation’ without an experienced and knowledgeable tenant rights attorney, perpetuating a very large power imbalance.”
The tenant group even characterized CHIP’s press release as “publicly lamenting a low eviction rate.” It dismissed the safeguards CHIP proposed, including that the tenant would first meet with a financial adviser and could then opt out of mediation and go to housing court.

The opposition makes it unlikely that state lawmakers would set up a mediation program. Legislators rely on tenant activist groups for information, even if it is untrue, Martin said. “The questions we get [from lawmakers about proposals] are always, Did you check with these groups?”
In this case, CHIP’s answer will be no, because it said that strategy backfired with the vacant-unit bill. Tenant groups got some legislators to drop their sponsorship of the measure.
But CHIP also knew that tenant groups have long opposed mediation as a housing court alternative.
Martin said about 80,000 or 90,000 of the city’s approximately 900,000 rent-stabilized tenants fall four to six months behind on payments every three to five years, bogging down housing court with cases that are typically resolved by the city’s one-shot deals or other aid.
“It seems a tremendous waste of time and money to keep going through the same process,” Martin said.

Diverting those cases to mediation would free up the court to focus on those involving building violations, nuisance tenants or other complicated matters, he said.

 

David Goldsmith

All Powerful Moderator
Staff member
CHIP certainly fucked small landlords by convincing them Rent Stabilization would go away if they held vacant units hostage and claimed they would lose money renting vacant units. And henchmen like the fraudster Sherwin Belkin promising a win in front of the Supreme Court caused the loss of billions of dollars in uncollected rent.


Say goodbye to CHIP, RSA. Meet the New York Apartment Association​

RSA members to vote, but merger is essentially done

Two landlord groups are now all but assured of becoming a new supergroup, and a leadership shakeup is also on tap.

The Rent Stabilization Association’s members are expected to vote next month on its proposed merger with the Community Housing Improvement Program. The combined group will be called the New York Apartment Association, according to a memo sent to RSA members.
The merger will mark the end of Joseph Strasburg’s 30-year tenure as president of RSA. Instead, he is expected to serve as a consultant for the new group for at least three years, three sources said. Strasburg and a representative from RSA did not respond to a request for comment.
RSA’s board, as well as CHIP’s board and members, have already signed off on the merger, and once the RSA membership vote happens, the proposal will head to the state attorney general for final approval.
Some names have been floated to lead the organization, but nothing appears certain. When reached Thursday, Jay Martin, executive director of CHIP, did not comment on the future leadership of the combined organization. He and Strasburg have both publicly supported the merger.
The Real Deal first reported merger talks in August. The groups share members and policy priorities, and tag-teamed a lawsuit challenging the state’s rent law. Their case died at the doorstep of the U.S. Supreme Court in October.
Some members have expressed concern that the priorities of small landlords will be lost in the new group and that RSA is bringing far more money into the deal than CHIP is. As part of the due diligence around the proposal, RSA commissioned a report that broke down CHIP’s spending.

The analysis by PKF O’Connor Davies found that the smaller group’s cash burn was driving it toward insolvency. CHIP said that was a result of its winding down fundraising while continuing its aggressive lobbying efforts.
The groups’ leaders have said that combining their membership would allow them to better represent the interests of owners of multifamily housing, as well as co-ops and condos, because they would be doing so as a united front.
The merger comes at a challenging time for owners of multifamily and especially rent-stabilized buildings. In the past five years they have endured a sea change in rent stabilization laws, the pandemic, a “cancel rent” campaign that led some tenants to stop paying, state and federal eviction moratoriums, a problematic rent relief program, rapid inflation of operating costs and a major surge in interest rates.

CHIP has pushed for the passage of a measure that would allow owners to reset the rents of rent-stabilized apartments that become vacant after at least 10 years of continuous occupancy. The rent would remain stabilized after that.
The landlord groups suffered an unprecedented setback in 2019 when a revamped state legislature overhauled rent stabilization. Landlords say they can no longer raise rents enough to properly maintain rent-stabilized buildings or re-rent their vacant, dilapidated units.
With CHIP’s rent-reset bill stalled, lawmakers this month proposed a grant program to help owners of such units. The state Senate has also signaled that it is willing to discuss increasing the cap on individual apartment improvements, a program that allows owners to increase rents based on the cost of renovations. The 2019 law limited those increases to $83 per month for most rent-stabilized apartments.

 
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