Rent Regulation Law Passes

Met Council on Housing's

Analysis of the Final Deal

State lawmakers passed legislation late in the evening on Friday, June 24, to extend New York's rent-regulation laws for four years - tinkering with them only in minor ways. The laws were extended without any weakening amendments for the first time in 18 years, and with minor changes favoring renters, amid what can only be described as a hostile political climate for tenants. Those who have been active in the fight for stronger rent laws should be proud of their efforts.

Landlords spent millions in the last election, hoping among other things to get legislators to create a loophole to allow them to deregulate tens of thousands of apartments in buildings receiving J-51 tax benefits. Our hard work prevented this and other anti-tenant measures from being enacted, as they likely would have if not for organized resistance by tenants. The pro-tenant amendments that were enacted (outlined below) don't go nearly far enough to preserve our affordable housing stock, and for the most part are cosmetic changes. But for the first time in a generation we're going in the right direction, even if we're moving slower than we'd like.

Here's how our rent-regulation laws have changed:

Deregulation

Rather than being allowed to deregulate vacant apartments when the legal rent reaches $2,000, landlords will have to achieve a legal rent of $2,500 to do so.

This change will do little to stem the ongoing loss of our rent-regulated housing: we will still lose tens of thousands of apartments each year. (Met Council on Housing and other groups in the Real Rent Reform campaign have been fighting to end deregulation entirely.) Landlords can still claim limitless "improvements" to an apartment to reach the new $2,500 rent level.

The threshold for high-income deregulation, which affects a much smaller number of rent-regulated households, also shifted. The former law permitted landlords to apply for deregulation when a current tenant's rent reached $2,000 and the household income was $175,000 for two years; the new law permits deregulation when the rent is $2,500 and the household income exceeds $200,000 for two years.

Individual Apartment Improvement rent increases:

This is the mechanism by which landlords raise rents dramatically and deregulate apartments during vacancies, by making mostly cosmetic renovations and passing on the costs as a permanent rent increase. In vacant apartments, landlords still have the option of doing enough renovations to raise the legal rent to the deregulation mark - now set at $2,500 - at which point all rent and eviction protections disappear.

The formula for raising rents shifted from 1/40th of the cost of renovations to 1/60th - but this change only applies to buildings with over 35 units; in buildings with 35 or fewer units, the 1/40th rule remains. There is still no cap on the amount that landlords can increase rents using this loophole. A true reform would be to eliminate Individual Apartment Improvement rent increases entirely.

Vacancy bonus

Landlords can now claim the automatic 20% rent hike only once per year when apartments become vacant - but since landlords must offer one- or two-year leases for rent-stabilized apartments, multiple vacancies in one year are rare. The vacancy bonus, which creates an incentive for displacement, should be abolished entirely.

Enforcement

The new law requires New York State Homes and Community Renewal, the state agency in charge of administering the rent-regulation system, to "promulgate rules and regulations to implement and enforce all provisions of this act." It's too soon to know how far the agency will go in creating much-needed meaningful oversight mechanisms. The era of landlords policing themselves must end!

The four-year extension of the laws means that we'll have a chance to change who our legislators are, and then change the rent laws soon thereafter! Some landlord lobbyists, aware that the political winds are starting to shift in our favor, were calling for the laws to be renewed for 14 years. Our fight to end vacancy decontrol, protect Mitchell-Lama and Section 8 tenants, and win home rule over our rent laws, along with other real rent reforms, will continue!

Our Analysis:

You should be proud your efforts as an active tenant, but it's also appropriate to be very angry at those elected officials in positions of power who didn't push hard enough for the rent reforms that we need. Governor Andrew Cuomo's assertion that this bill was the strongest rent law in New York in many years is ridiculous. The pro-tenant amendments are mostly superficial and certainly inadequate, and most of the weakening provisions enacted under Cuomo's Republican predecessor, George Pataki, remain in place. It became clear earlier this spring that Cuomo didn't plan to go to bat for tenants. He called for "stronger" rent laws, but refused to explain what he meant; apparently, he made such vague statements to set the bar low.

A handful of Albany legislators did go to bat throughout the year for real rent reforms, and continued fighting for better language even after an agreement was reached by Cuomo, Democratic Assembly Speaker Sheldon Silver, and Republican Senate Majority Leader Dean Skelos, the notorious "three men in a room." A small group of pro-tenant Senators and Assemblymembers voted against this legislation because it didn't go far enough to strengthen tenant protections and end deregulation loopholes. We fully support this move, and applaud their courage in standing up for tenants and voting their consciences in the all-too-controlled political climate of Albany.

Most of all, we applaud the hard work of our members, and of everyone in the Real Rent Reform campaign, for an extraordinary effort in recent years to enact housing policies based on the needs of people, not profit.

Look for a full rundown of what happened in the 2011 rent-laws fight in the July/August issue of Tenant/Inquilino, Met Council on Housing's newspaper, mailed free each month to our members.

Not yet a member? Click here to download a membership form. Our basic membership rates begins at a low $25 per year, and they provide the support we need to carry on the fight to strengthen our rent protection laws, as well as to assist and organize New York City tenants.