They say good things come to those who wait and perhaps the wait is over for NYC landlords and tenants.
Much of this blog has focused on the ineptitude, incompetence and questionable motives of NY State’s legislators when it comes to housing policy. And the criticism has no doubt been well deserved. It turns out, however, that there is reason for hope with the under-the-radar proposal introduced last year, clumsily referred to as the “Local Regulated Housing Restoration Adjustment.” Though just in the initial stages of the arduous path to becoming law, this measure has been described as a rent reset for vacant rent-stabilized apartments.
To refresh, current law requires rent stabilized units to remain at the legal rent upon tenant turnover. The only permitted rental Increases for rent stabilized apartments are set annually by the city’s Rent Guidelines Board (often less than 3% per year). The new proposal would allow a rental reset for those units that become vacant after being continuously occupied for ten (10) or more years and after being renovated. The new legal regulated rent would be the amount agreed to by the owner and that first new tenant.
The proposal, if passed, would be a meaningful step in the right direction. First, it would reset rents that are often so far below market that owners currently are better off leaving the apartments vacant. This should reverse the current trend undertaken by landlords of “warehousing” rent stabilized apartments once they become vacant. Second, the law would incentivize owners to renovate units that, in some cases, haven’t been renovated for a decade or longer and have fallen into disrepair.
In many ways, this proposal isn’t dissimilar to what happens when a rent controlled tenant vacates a unit and the unit becomes rent stabilized with the new tenant paying what is often referred to as a “first rent.” The rent tends to be at a market rate level though technically the apartment remains rent stabilized. So, the reset in rents would result in a sizeable increase from where it was but then settle back into a 1%-3% annual increase thereafter as governed by the Rent Guidelines Board.
This law, if enacted, would be one of the first compromises between landlords and rent stabilized tenants in quite some time where both sides benefit from the outcome. Can this possibly be in the words of Humphrey Bogart “the beginning of a beautiful friendship” among tenant advocacy groups, landlords and legislators in Albany? I am not so sure but it would be a good start.
Website Source: Rebong, K. (2024, January 11). The Daily Dirt: Lesser-known housing bills to watch. The Real Deal. https://therealdeal.com/new-york/2024/01/11/new-york-housing-bills-to-watch-in-2024-the-daily-dirt/
Be First to Comment