Changes would further limit hikes but is a bit less radical than some landlords feared
WILL BREDDERMAN reports for Crain’s New York Business
Assembly Speaker Carl Heastie and state Senate Majority Leader Andrea Stewart-Cousins announced late Tuesday that their two houses have agreed on reforms to the rules covering nearly 1 million apartments citywide.
The accord came just in time to “age” and be voted upon before the rent laws expire on June 15. It would limit or eliminate many of the mechanisms that allow landlords to increase lease rates on the price-controlled units, but falls well short of some of the measures favored by tenant activists.
The package would, however, end the drama that recurs every few years because, for the first time in decades, it was given no expiration date.
“These reforms give New Yorkers the strongest tenant protections in history,” the two Democrats said in a joint statement. “These reforms will pass both legislative houses and we are hopeful that the governor will sign them into law. It is the right thing to do.”
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The legislation would end high-rent/high-income, often inaccurately referred to as “vacancy decontrol,” in which a vacant apartment escapes the state’s regulatory reach once its rent exceeds $2,774.76 per month—or if the rent passes that threshold and a landlord can show the income of its occupants exceeded $200,000 two years in a row. It also would abolish the vacancy and longevity “bonuses” which permit landlords to dramatically increase rents after tenants move out.
The bill would lock in “preferential rents,” that is, rents that are less than the maximum allowed, as the baseline for future percentage increases set by the city’s Rent Guidelines Board. However, when a tenant with a preferential rent moves out, the landlord can raise the rent to the maximum regulated figure.
Perhaps the most contentious aspect of the rent-law debate has concerned major capital improvements and individual apartment improvements, which respectively permit landlords to permanently raise tenants’ rents after renovations to entire buildings or particular units. Some progressives hoped to see these mechanisms eradicated, while landlords and their sympathizers insisted they are necessary incentives for repairs and property investment.
Under the Heastie/Stewart-Cousins package, the rent hikes resulting from such projects would expire after 30 years. Further, it would cap increases for major capital improvements in New York City at 2%, down from 6%, and would require stricter state review and oversight of the procedures, which some landlords have exploited. At least 25% of such improvements would have to be audited, and the kind of improvements that may be counted toward rent increases would be further limited.
Also, landlords would only be able to spend $15,000 on an individual apartment improvement in any given 15-year period, and would be limited to three renovations per unit every 15 years.
