Proposals with Rent Regulations Expiring June 15

NEW YORK CITY—On June 15, New York rent regulations expire. Legislators have introduced nine proposals to the assembly and senate to address what they say have been loopholes causing a precipitous drop in rent-stabilized apartments across the state.

In New York City, 5.5 million people, 66% of households, are renters. One-third of renters are severely rent burdened paying 50% or more their household income towards gross rent, says New York State Assembly Speaker Carl E. Heastie.

“In the state budget, we made the property tax cap permanent to provide stability to homeowners. Now we need to provide that same level of stability for tenants by reforming our rent and tenant protection laws,” he says. “We have seen far too many families forced out of the neighborhoods they shaped because of the cost of rising rents and property speculators chasing profits over people.”

The proposals aim to protect tenants and affordable housing in the following ways:

(1) Eliminate major capital improvement (MCI) rent increase programs and individual apartment improvement (IAI) rent increases. Current laws allow for landlords to raise rent to cover costs of substantial improvements with the MCIs and raise rent on vacant apartments with the IAI provision. Political leaders have cited these allowances as incentives for and ways which landlords have pushed tenants out of rent regulated apartments to achieve the highest rents possible.

(2) Protect preferential rent tenants. Landlords in regulated property can offer tenants rent below the legal regulated rent but can adjust it to the legal maximum upon renewal. The bill would require lease renewals to be based on preferential rate charged to the tenant until the apartment is vacant.

(3) Eliminate vacancy decontrol and vacancy bonuses. Landlords can remove apartments from rent stabilization protection when they become vacant and reach a threshold rent of $2,774.76. The bonus provision allows landlords to raise rent 20% upon vacancy.

(4) Cap rent control and rent stabilization increases according to Rent Guidelines Board increases.

(5) Extend time for filing complaints for rent overcharge claims and penalties.

(6) Establish the Emergency Tenant Protection Act. This would allow local governments to regulate rents and evictions in times of housing emergencies.

(7) Protect manufactured housing from unjustified increases. Manufactured homeowners often do not own the land on which their property was built, so are subject to the raising of rents and lot fees. The proposed law would provide a legal option if these homeowners face unjustifiable increases.

(8) Protect tenants who break leases. Sometimes tenants are faced with circumstances where they are forced to end their lease. The proposal only allows recovery of actual damages and requires landlords to take reasonable steps to re-rent the property.

(9) Prohibit evictions without good cause.

In March, a coalition of New York City building owners took out media ads to run through June 15, asserting small business property owners are struggling to maintain their buildings. They state taxes, fuel and maintenance have increased by more than double the rate of allowable rent increases causing hardship for many landlords.

In support of the coalition, John H. Banks, president, Real Estate Board of New York, stated “The city has a serious affordability crisis yet the proposals we’ve seen so far do nothing to ease vacancy rates, make apartments more affordable or create a single new affordable unit. Instead, they threaten to put small landlords who own the majority of the city’s rent regulated units in financial crisis and stifle the construction of affordable housing in the future.”

Blaine Schwadel, a member of the real estate firm Rosenberg & Estis, in a GlobeSt.com interview articulated additional landlord perspectives.

He asserts that rent increase provisions do not provide incentives for landlords to harass tenants. “I think that attributes the bad actor status to every landlord and that’s just not right and it’s not true.” He points out that the IAI increases occur when apartments are vacant, and the MCI rent hikes are capped at 6%.

Schwadel also emphasizes that limiting the rent increases even upon vacancies will make it difficult for landlords to properly maintain buildings. Plus, without the upside of increased rents, he predicts fewer buildings will trade.

The real estate lawyer opines that the IAI and MCI laws will reduce jobs for laborers and contractors installing apartment improvements. “If I can’t get an individual apartment improvement for a new kitchen, I’m not going to install a new kitchen, so the people who sell refrigerators or install cabinets are going to have a lot less work.”

However, Miguel Robles-Durán, an associate professor of urbanism at the New School, emphasizes excessive rents and lack of affordable housing are causing problems for the city. He opines it is not sustainable for New York City to remain rent-burdened.

Although the exact reasons for populations leaving a city remain up for debate, affordable housing is routinely a part of city livability indices. Recently released US Census figures show disquieting news for New York City.

In 2017-2018, losing more than 39,500 residents, New York City led all cities in declining population for a second year in a row, according to a Brookings Institute analysis of the census data. In addition, an April 18, 2019 Patch article “People Are Fleeing New York City in Droves, Census Figures Show” breaks down the 39,500 plus residents who left the city: 17,959 departed from Queens; 13,555 left Brooklyn; the Bronx lost 7,593 residents; and 1,079 people moved from Manhattan. (Staten Island was an exception with a population increase of 663.)

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