New York Adopts Sweeping Tenant Protections on Rents, Evictions
N.Y. Legislature Passes Sweeping Tenant Protections on Rents and Evictions
(Bloomberg) -- New Yorkers won historic rental protections from the Democrat-controlled state legislature over the objections of landlords who warned the changes would make it impossible to maintain their properties.
The massive rewrite of rent rules -- covering about 2.4 million residents of the city’s 1 million regulated apartments -- aims to preserve affordable housing by eliminating most of the tools that landlords used to remove units from regulation. The package also abolishes a “vacancy bonus” that allowed property owners to raise rents 20% when a tenant departed.
Senators passed the bill by a vote to 36 to 26, with the Assembly voting 95 to 41. The legislation is intended to be permanent.
The vote came shortly before the current laws were set to expire. Governor Andrew Cuomo signed the legislation immediately after passage.
"At the beginning of this legislative session, I called for the most sweeping, aggressive tenant protections in state history,” Cuomo said. “I’m confident the measure passed today is the strongest possible set of reforms that the Legislature was able to pass and are a major step forward for tenants across New York.”
Democrats were in an ebullient mood as the debate progressed. N.Y. Senator Liz Krueger, a Democrat who voted in favor of the package, said she “can’t stop smiling today.”
“This is one of the most important pieces of legislation that will pass in this house in a very, very long time,” Krueger said.
“Housing is important to every single one of us,” Senate Majority Leader Andrea Stewart-Cousins said during the floor vote. “What we’re doing today says ‘We get it.’ What we’re doing today says, ‘We don’t want people living in fear of not knowing that they can afford a space or where they can get the next space if this space is gone.’ These laws are permanent. That’s important.”
The real estate industry, which strongly opposed the law, has been crucial to Cuomo’s political career, donating more than $19 million to him since 2002, according to FollowTheMoney.org.
More than half of apartments in New York City are covered by some kind of rent regulation. From 1993 to 2016, the city lost more than 152,000 such units, according to the city Rent Guidelines Board. Central Harlem dropped 500 rent-stabilized units in just one year from 2015 to 2016. Astoria, Queens gave up 634 such units, and Bedford-Stuyvesant, Brooklyn, 460 units, according to an analysis by the Association for Neighborhood & Housing Development, a tenants’ advocate group.
Unintended Consequences
Real estate industry representatives said the laws would have unintended consequences.
“The legislation takes a wrecking ball to New York City’s affordable housing plan,” said John Banks, president of the Real Estate Board of New York. “The construction of thousands of units is predicated on an agreement that developers create mixed-income buildings with both affordable and market-rate units. As currently written, the new law would subject every unit to stabilization, making their construction financially impossible.”
Joseph Strasburg, president of the Rent Stabilization Association, which represents 25,000 landlords, said the laws would discourage landlords from maintaining aging buildings. Kathryn Wylde, president of the corporate civic group Partnership for New York City, echoed Strasburg, saying the reforms would come at the expense of living conditions.
Terrible Conditions
“The city’s older, regulated apartment buildings require constant upgrading and modernization,” Wylde said. “It is not enough to maintain affordability if it means tenants are living in terrible conditions, as we have seen with the deterioration of the NYCHA public housing stock.”
In debate ahead of the vote on Friday, Republicans argued the legislation would increase the burden on landlords and ultimately make the affordable housing situation worse.
“There is a need for change here but we do not believe on our side of the aisle that the extent of these changes are going to be helpful in encouraging development of more affordable housing,” said Michael Fitzpatrick, a Republican member of the State Assembly. “We’re going to create an environment where it’s going to be increasingly difficult for owners to keep ahead of their expenses.”
Scott Mollen, a real estate partner at Herrick Feinstein LLP, who represents landlords, said the laws will end up benefiting well-off residents who happen to live in rent-stabilized units.
“This legislation creates further opportunity for wealthy people to benefit from stabilized housing and it in essence forces owners to subsidize people who may be multimillionaires or who have income in the hundreds of thousands and have second homes in the Berkshires, the Hamptons or Florida," Mollen said.
The new laws allow landlords to own just one rent-stabilized unit for themselves or their immediate family and require that units remain rent-stabilized if leased to tenants at risk of becoming homeless. One provision limits security deposits to one month’s rent, to be returned when a tenant leaves.
Another measure prohibits passing on to tenants higher heating-fuel charges and caps any rent increase due to capital improvement at 2%, down from 6%, in New York City, and to 2% down from 15% outside the city. It also limits rent increases to 3% in mobile-home parks unless the landlord can justify a larger increase.
A landlord may be criminally charged for forcibly evicting or locking out a tenant, and must notify a tenant prior to non-renewal of a lease or if rent is to increase 5% or more. Other provisions give tenants more time to get a lawyer or fix lease violations to stave off eviction, and allow judges to delay eviction for a year if the tenant can’t find similar housing in the same neighborhood.
Landlords did win a small victory: a provision permitting them to increase rents for some improvements. It caps this expense at $15,000 over a 15-year period and allows owners to make three increases during that time. Those increases would expire after 30 years rather remain permanent.
To contact the reporters on this story: Henry Goldman in New York at hgoldman@bloomberg.net;Keshia Clukey in Arlington, Va. at kclukey@bloomberg.net
To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Rob Urban
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