Historic Affordable Housing Legislation: It's A Deal!

new york city

Tenants across New York state can breathe a little easier.  This week on Tuesday State Legislators reached a deal to extend and strengthen rent regulation throughout New York state.  This is a historical moment for tenant advocates. This has happen just in the nick of time as the current rent laws are set to expire this Saturday.  New York Gov. Andrew Cuomo has said that he would sign whatever legislation was agreed upon by the Senate and Assembly, “This is the best tenant protections they will pass, and I will sign it,” he said, speaking at a news conference in Albany on Wednesday    

The legislative bodies are expected to vote on the reforms on Friday, a day before the current rent regulations expire. The laws affect about one million apartments in New York City.

Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heasties said via a released statement, "These reforms give New Yorkers the strongest tenant protections in history. 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.  None of these historic new tenant protections would be possible without the fact that New York finally has a united Democratic legislature. Our appreciation also goes to the tenant advocacy groups and activists that fought so hard to make this possible."

The comprehensive tenant protection legislation:

Extends the Rent Regulation Laws and Makes them Permanent:

-Makes the rent regulation system permanent, so they will not sunset at any time in the future without an act of the Legislature to repeal or terminate them.

-Rent regulation laws have been scheduled to expire every four to eight years for decades.

Repeals High Rent Vacancy Deregulation & High Income Deregulation:

-Repeals the provisions that allow the removal of units from rent stabilization when the rent crosses a statutory high-rent threshold and the unit becomes vacant or the tenant's income is $200,000 or higher in the preceding two years.

-Previous provisions led to the deregulation of more than 300,000 units since they were first passed in 1994.

Reforms Owner Use Exception to Rent Regulation:

-Limits the use of the "owner use" provision to a single unit, requires that the owner or their immediate family use the unit as their primary residence, and protects long-term tenants from eviction under this exception by reducing the current length of tenancy required to be protected from eviction to 15 years.

Keeps Stabilized Apartments Rented by Nonprofits in the Rent Stabilization System:

-Limits the temporary non-profit exception to rent stabilization by requiring units to remain rent-stabilized if they are provided to individuals who are or were homeless or are at risk of homelessness.

-Provides individuals permanently or temporarily housed by nonprofits status as tenants while ensuring that units used for these purposes remain rent stabilized.

Repeals the Vacancy Bonus & Longevity Bonus:

-Repeals the "vacancy bonus" provision that allows a property owner to raise rents as much as 20 percent each time a unit becomes vacant.

-Repeals the "longevity bonus" provision that allows rents to be raised by additional amounts based on the duration of the previous tenancy.

-Prohibits local Rent Guidelines Boards from reinstating vacancy bonus on their own.

Prohibits Rent Guidelines Board from Setting Class-Specific Renewal Increases:

-Prohibits Rent Guidelines Boards from setting additional increases based on the current rental cost of a unit or the amount of time since the owner was authorized to take additional rent increases, such as a vacancy bonus.

Makes Preferential Rents the Base Rent for Lease Renewal Increases:

-Prohibits owners who have offered tenants a "preferential rent" below the legal regulated rent from raising the rent to the full legal rent upon renewal.

-Once the tenant vacates, the owner can charge any rent up to the full legal regulated rent, so long as the tenant did not vacate due to the owner's failure to maintain the unit in habitable condition.

-Owners with rent-setting regulatory agreements with federal or state agencies will still be permitted to use preferential rents based on their particular agreements.

Provides Relief from Large Rent Increases for Rent-Controlled Tenants:

Sets Maximum Collectible Rent increases at the average of the five most recent Rent Guidelines Board annual rent increases for one-year renewals.

This bill also prohibits fuel pass-along charges.

Extends Rent Overcharge Four-Year Look-Back Period to Six Years:

-Extends the four-year look-back period to six or more years as reasonably necessary to determine a reliable base rent, extends the period for which an owner can be liable for rent overcharge claims from two to six years, and would no longer allow owners to avoid treble damages if they voluntarily return the amount of the rent overcharge prior to a decision being made by a court or Housing and Community Renewal (HCR).

-Allows tenants to assert their overcharge claims in court or at HCR and states that while an owner may discard records after six years, they do so at their own risk.

Reforms Rent Increases for Major Capital Improvements (MCIs):

-Lowers the rent increase cap from six percent to two percent in New York City and from 15 percent to two percent in other counties.

-Provides the same protections of the two percent cap going forward on MCI rent increases attributable to MCIs that became effective within the prior seven years.

-Lowers increases further by lengthening the MCI formula's amortization period.

-Eliminates MCI increases after 30 years instead of allowing them to remain in effect permanently.

-Significantly tightens the rules governing what spending may qualify for MCI increases and tightens enforcement of those rules by requiring that 25 percent of MCIs be inspected and audited.

Reforms Rent Increases for Individual Apartment Improvements (IAIs):

-Caps the amount of IAI spending at $15,000 over a 15-year period and allows owners to make up to three IAIs during that time.

-Makes IAI increases temporary for 30 years rather than permanent and requires owners to clear any hazardous violations in the apartment before collecting an increase.

Requires Annual Report From HCR On Rent Administration and Tenant Protection:

-Requires HCR to submit an annual report on the programs and activities undertaken by the Office of Rent Administration and the Tenant Protection Unit regarding implementation, administration and enforcement of the rent regulation system.

-The report will also include data points regarding the number of rent stabilized units within each county, application and approvals for major capital improvements, units with preferential rents, rents charged, and overcharge complaints.

Reforms Co-Op/Condo Conversions :

-Strengthens and makes permanent the system that protects tenants in buildings that owners seek to convert into co-ops or condos.

-Eliminates the option of "eviction plans" and institutes reforms for non-eviction plans.

-Requires 51 percent of tenants in residents to agree to purchase apartments before the conversion can be effective. (Currently 15 percent of apartments must be sold and the purchasers may be outside investors.)

-For market-rate senior citizens and disabled tenants during conversion, evictions are permitted only for good cause, where an unconscionable rent increase does not constitute good cause.

Landlords groups are not seeing this in such a positive light. The group Taxpayers for an Affordable NY—which includes landlord-friendly organizations like the Real Estate Board of New York and the Rent Stabilization Association issued its own statement that reads. “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.”   Jay Martin, the executive director of the Community Housing Improvement Program, said this in a statement. “The rent package currently under consideration by the legislature would devastate New York City’s housing stock and all but wipe out small, local property owners.”