Lawmakers strike sweeping deal on rent regulations

Old NYC apartment building
Old NYC apartment building
Ryan DeBerardinis/Shutterstock

Lawmakers strike sweeping deal on rent regulations

Attention now turns to Cuomo days before state rent laws expire.
June 11, 2019

Capitalizing on their newfound power in Albany, Democratic lawmakers announced a deal late Tuesday night that would strengthen tenant protections in New York City and neighboring areas, make the laws permanent, and expand them upstate to communities that choose to opt into the state’s rent stabilization program.

The deal, reached with just days to go until the state’s existing laws expire on June 15, would repeal vacancy decontrol, limit the use of preferential rents and expand the state’s rent laws statewide. It would also limit how landlords can boost rents in other ways, according to joint announcement issued by state Senate and Assembly Democrats.

While tenant advocates praised the legislative agreement, they did not win on all fronts. A “good cause” eviction measure would have prohibited “unconscionable” rent increases, defined as more than 1.5 times the percentage change in an area’s Consumer Price Index. But it ultimately proved too controversial to include in the deal. The deal would also curtail, but would not eliminate, rent increases made after landlords make improvements to building or individual units.  

"These reforms give New Yorkers the strongest tenant protections in history,” state Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie said in a statement released Tuesday night. “For too long, power has been tilted in favor of landlords and these measures finally restore equity and extend protections to tenants across the state. 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.”

The deal on rent reforms includes elements of eight of the nine bills put forward by a statewide coalition of tenant groups and would make permanent rental laws that lawmakers have had to renew at four- or eight-year intervals, making them a prime target for political deal making in Albany.

If passed into law, the deal represents a big victory for Democratic lawmakers as they end their first year in a decade with control of both houses of the state Legislature. In that time, they have passed a litany of high-profile legislation including the Reproductive Health Act, the Child Victims Act and criminal justice reforms, including eliminating cash bail in most instances. But from Day 1, preserving and expanding the state’s tenant protections has been an issue that activists have been watching closely.

Gov. Andrew Cuomo had suggested to reporters at a press conference just hours earlier that state Senate Democrats might be bluffing about having the votes to pass a rent regulation package. However, the governor has said that he would sign into law a rent package if the Legislature passed it. “They might end up staying late,” he told reporters. “They have to decide what they really want to do.”

Now with just days to go until the existing rent laws expire, the attention will shift to Cuomo – once lawmakers put their latest deal up for a vote in both chambers.

The real estate industry, which has contributed heavily to Cuomo’s election campaigns, was quick to criticize the deal. “This legislation fails to address the City's housing crisis and will lead to disinvestment in the City's private sector rental stock consigning hundreds of thousands of rent regulated tenants to living in buildings that are likely to fall into disrepair,” Taxpayers for an Affordable New York, a real estate group, said in a statement, while urging the governor to reject the deal. “This legislation will not create a single new affordable housing unit, improve the vacancy rate or improve enforcement against the few dishonest landlords who tend to dominate the headlines.”

Here’s a rundown of what Democratic legislative leaders in both chambers say they support:

Vacancy decontrol/bonus gone

The deal would prohibit the deregulation of rental properties that become vacant, cross a certain rental level, or are occupied by tenants with incomes exceeding $200,000 in the previous two years. Tenant advocates had made repeal of vacancy decontrol a top priority. The deal also repeals the “vacancy bonus,” a provision in the rental laws that allowed a landlord to raise rents by as much as 20% when a unit became vacant. Landlords would not be able to raise rents to the legal regulated maximum on units with preferential rents until after a tenant vacates a property.

MCIs and IAIs scaled back

Landlords will still be able to raise rents when they make repairs to buildings and apartments, but they will face news limits to how they can use major capital improvements and individual apartment improvements. This includes a reduction in the rent increase cap from 6% to 2% in New York City and from 15% to 2% in other counties. Increases made under the major capital improvements program would expire after 30 years. Spending on individual apartment improvements will not be subject to a $15,000 cap over a 15-year period and makes related increases expire after 30 years.

Another landlord group, the Community Housing Improvement Program, blasted the new limits. “By proposing temporary MCI/IAIs that would disappear after 30 years, the legislature is creating a regulatory nightmare and gutting these programs to the point of insignificance,” Jay Martin, CHIP’s executive director, said in a statement. “Our members cannot afford to make 30 year, interest free loans on their property – we don’t believe any small business in any industry ever could. Language to cap IAI improvements at $15,000 every 10 years is simply unconscionable.”

Statewide expansion of tenant protections

While the “good cause” bill was not included, the deal represents a historic change in state rental laws. If the new deal becomes law, any municipality in the state could now opt into the rent stabilization system if it meets the statutory requirements, which includes a requirement that housing stock have less than a 5% vacancy rate.

A statewide ban on “tenant blacklists” would also go into effect and security deposits would be limited to one month’s rent. Illegally locking out a tenant would become a Class A misdemeanor and landlords would have to notify tenants if they intend on increasing rents by more than 5% or do not wish to renew a lease, among other expansions of legal rights for tenants.

Mobile homes

Residents of mobile homes would also receive new protections under the deal. This includes a 3% limit on rent increases “unless the increase is justifiable,” according to the press release. A park owner would have to wait two years to start an eviction case in cases where they want to change the use of a park. The deal also calls for establishing new rent-to-own protections.

Zach Williams
is a staff reporter at City & State and its sister publication, New York Nonprofit Media.
20190619