The expanded and permanent Loft Law will protect tenants, say its proponents, but industry and arts advocates say it might hurt manufacturing and push out lower-income artists. — Photo by somethinghumble, from the BushwickBK Flickr Pool

Assemblyman Vito Lopez and tenant groups citywide are calling the extension of Loft Law a major victory for burgeoning artists communities in neighborhoods such as Bushwick. But opponents worry about its effects on local industry, low-income artists, and their even lower-income neighbors. Aaron Short explores both sides, but the verdict could be out for years.

In 1987, when the debate for extending tenant protections in multifamily loft buildings was rushing through Albany, Assemblyman Vito Lopez’s attention was drawn to a converted loft on the corner of Morgan and Metropolitan Avenues at the edge of his district.

Tenants in the building asked Lopez for help in a matter with their landlord. Lopez lent his assistance, and for his work, they threw him a party.

On Tuesday night, about a week after the legislature passed its first significant amendments to the Loft Law since 1987, Lopez celebrated with a victory lap at a tenants-only meeting at another converted loft building in Williamsburg in the other edge of his district, at 475 Kent Avenue.1 Light refreshments were served, though few in the room would actually call it a party.

"It was weird," one tenant said a few days later. "It was a little self-congratulatory."

And why not?

The passage of the Loft Law is a significant legislative and political accomplishment for Lopez, who sponsored the bill and has been trying to pass it for decades. As Lopez himself explained, he felt a sense of "personal gratification" for finally passing the bill as a tenant advocate since he first started working in Bushwick.

"My job, my interest is not to accommodate landlords, my interest has been to accommodate tenants," said Lopez. "I’ve met with them regularly, this has been their number one priority for the past eight years and I’ve delivered that priority."

The bill will extend a number of rental protections to tenants living in illegally converted loft units from January 2008 to January 2009, effectively bringing thousands of units into rent stabilization. Landlords of converted factories will have to renovate their buildings to meet safety codes for residential use or face fines as high as $17,000.

The speed with which the bill moved from committee to passage in the state senate caught many city leaders by surprise, including the Mayor’s office, which admitted to being "caught off-guard."

In response, both Mayor Bloomberg and a group of elected officials led by Diana Reyna sent letters on June 21 urging Governor Paterson to veto the Loft Law. Both letters focused on the consequences of Loft Law enforcement, which Bloomberg and Reyna believed would undermine the city’s industrial retention policy and further displace businesses from manufacturing zones.

"As written, this bill would hurt our economy by driving manufacturers out of New York City, reducing the number of good-paying jobs available to New Yorkers at precisely the time we need them the most," said Bloomberg, in his letter.  "The bill would, in effect, prioritize residential occupancy over industrial use wherever they conflict, sending a clear and discouraging message to current and would-be industrial tenants anywhere in the city." 

Lopez’s allies summarily dismissed that argument, noting that manufacturing jobs have been disappearing from the city for decades and that these industries would not be returning to loft buildings that have been slowly converting to residential use. The Loft Law, in their view, merely applies the law to an already existing trend, providing an incentive for landlords to make those units safer and preventing landlords from evicting long-time tenants with little cause.

On June 21, after testifying in front of City Council in opposition to the rezoning of Williamsburg’s Domino sugar refinery, Lopez drove up to Albany and hammered out a deal. The Governor has until July 12 or 13 to sign it, and he is expected to do so.

Interestingly, the compromise between Lopez and the Mayor’s office was that 13 of the city’s 16 Industrial Business Zones would be excluded from the Loft Law’s effects. The three that the Loft Law would apply to were Greenpoint-Williamsburg, North Brooklyn, and Maspeth. In a later revision, Maspeth’s IBZ was swapped with Long Island City, another area already full of residential conversions.

That move made Reyna furious and she blasted the bill, and Lopez himself, in several papers for a "direct demonstration of the exploitation of power." Reyna predicted that within three years there would be a residential rezoning in Bushwick, similar to the one Williamsburg and Greenpoint experienced in 2005, which would likely spur conversions to manufacturing buildings and push out the remaining industry in her district.

"You have to appreciate, in three years, this will lead to a rezoning that will have no one else’s input other than his, and we’ll see every artist displaced, and every business, if there is any left, will be gone," said Reyna. "Unemployment will roar through the roof… in three years."

Industry representatives, such as EWVIDCO‘s Leah Archibald and the New York Industrial Retention Network’s Amy Anderson and Sarah Crean, argued that the bill would expedite the decline of existing industrial space — 1 million square feet of which has already been lost in the past decade — while also pushing out artists and small manufacturers from their work studios.

"The real artists can say goodbye," said Archibald. "They will have to go out and colonize another neighborhood. They will not be able to come out of this. If you’re an artist and you’re going to produce, you really need the space to do it. That’s the common ground. They’re going to lose cheap studio space with the relentless onslaught of gentrification over time. Today, tomorrow, next week it will be about the same. But over time?"

That concern was echoed by Arts in Bushwick’s Laura Braslow, a loft tenant herself, who has questioned how landlords will cover the costs of upgrading buildings and whether the Loft Board, which will ultimately set legal rents for loft units going into rent stabilization, would price out many of the artists who moved to Bushwick for spacious, affordable studios to work and live.

"It drives a wedge in long-term immigrant communities who are trying to retain jobs and industries and the creative communities who are trying to live in these loft buildings," said Bralsow. "This isn’t good for developing solid connections and a shared vision of the community between artist population and other immigrant groups."

Other loft tenants and tenant advocacy groups, such as organizer Chuck Delaney and Housing Here and Now Executive Director Michael McKee, were more supportive of the bill, arguing that the tenant protections would more than offset rental increases established by the Loft Board.

"That’s the way the original Loft Law worked," said McKee, who credited Lopez and Senator Martin Dilan for the legislative accomplishment. "The way it works, tenants have to pay for the upgrade and it’s all subject to jurisdiction of the Loft Board."

And Betsy Kelleher, a tenant at 475 Kent Avenue who is currently involved in a bitter lawsuit with her landlord, believes that the new law could overturn a recent court decision that her landlord won and prevent her from being evicted.

"I’m really happy," said Kelleher. "It’s been an emotional roller coaster for me. I have been fighting for ten years to stay in my building. So many times I thought about getting out of here. It’s difficult to find a space like this and I built it."

Housing attorneys such as David Frazer, who addressed tenants at 475 Kent, believe that landlords will convert their buildings on a case by case basis, determined by their own finances, how much work residents have put into a building, and how much the renovations would cost.

"The building we were in, 475 Kent, got vacated because of ‘explosive wheat’ in the basement," said Frazer. "Prior to getting back in, the landlord had to do an enormous amount of work bringing building up to code and that building has already been done.  It’s going to be an enormous cost building to building and even unit to unit. Landlords may need to rearrange corridors, means of egress. The Loft Law will light a fire under landlords."

The political implications of its passage are only now beginning to unfold.

With the bill awaiting the governor’s signature, Bushwick’s industrial advocates and tenants are in a "holding pattern." After the Council passed its budget, Reyna has turned her attention to working with the Mayor’s office to find ways to ensure that existing businesses in the industrial zones in her district are not displaced.

Meanwhile, the Ridgewood Bushwick Senior Citizens Council, which strongly backed the Loft Law, is continuing to hold loft tenant meetings to advise tenants facing harassment from landlords or being charged higher than legal rent, and Lopez is moving to highlight both his work defending loft tenants and fighting for services in his upcoming reelection campaign.

The long-term political consequences are still up in the air. Some observers say that Lopez is keenly aware a shifting electorate in Williamsburg that led Reyna to eek out a victory in last year’s Council election and that this legislation was pushed through in order to set up new political alliances down the road. By reaching out to loft tenants, Reyna has argued, Lopez is "shifting the district to his will."

"He’s using Ridgewood Bushwick’s legal team to organize artists in the area and the perfect exchange for good behavior, whether that’s opposing Domino Sugar or anything at his request will now be regarded with a protection of tenants rights," said Reyna. "He’s claiming that the tenants wanted this. Who did he consult with? Or is this a direct exploitation of power?"

Maybe not. 

Lopez’s record preserving and creating affordable housing and fighting for tenant’s rights remains his legacy. He doesn’t likely want to see the artist constituency, which he has courted in Williamsburg for much of his career, displaced from his district any more than Reyna, Bloomberg, or anyone else. He has argued against gentrification and luxury development along the Williamsburg waterfront. And he doesn’t want to see displaced artists in turn displacing his core constituency, longtime Hispanic residents in residential areas of Bushwick, a possible consequence of the expanded Loft Law.

It remains unclear how loyal artists and other loft tenants would be to Lopez, or to Reyna for that matter, despite her outreach, in future election cycles. Few care about their feud and the political horse-trading occurring in Albany and on Centre Street.

What they care more about is how landlords will react to upgrading converted loft buildings and how the Loft Board, an obscure division of the city’s Buildings Department, will proceed once those units are legal.

One thing is clear. Attorneys, lobbyists and tenant organizers will continue to sift through the bill raising a myriad of questions and looking for loopholes to avoid financial penalties and displacement.

"It’s a very safe bet that this bill was not thought through very well," said one attorney who represents loft tenants. "The 11th hour amendment and horse-trading that occurred without having thought through the consequences means that we spend next decade litigating in the courts to see what it all means."