By Arthur Z. Schwartz
The plight of renters, both rent-regulated and non-regulated ones, has long been part of New York City lore—steep rent hikes, shoddy maintenance, fear of being blacklisted and evicted, and a general sense of powerlessness against a landlord who doesn’t care.
The State Senate and Assembly’s landmark deal on New York’s rent regulations, adopted on June 21st, will introduce a new normal for the 2.4 million tenants in the city’s rent-regulated system, and add some new protections for tenants who are not rent-regulated (“market rate”). After decades of living under landlord-friendly rules like vacancy decontrol and renovation increases, the city’s rent-regulated tenants are poised to become newly empowered, armed with more financial security due to the elimination of sharp rent hikes and increased accountability for landlords.
The bulk of the landmark changes to New York’s rent laws last month was aimed at strengthening protections for the 2.4 million people who live in New York City’s rent-regulated apartments, or almost half of the city’s tenants.
But buried in the 74-page bill is an expansive patchwork of new protections that apply to all renters statewide, including 43 percent of New York City renters who live in unregulated apartments.
Taken together, the new laws—on everything from evictions to security deposits—represent a significant power shift away from landlords. But while the new rules may seem dramatically different, they actually represent a reversion to what the city’s rent-regulated system looked like more than 30 years ago.
New York City tenants may never again have to hear the words “vacancy decontrol” and “vacancy bonus.”
These two provisions don’t affect current tenants while they are living in rent-regulated units, but rather, future tenants. The elimination of vacancy decontrol, which enables landlords to deregulate apartments once the rents reach a certain threshold, currently of $2,774, is one of the biggest steps forward. After all, the provision has been blamed for the deregulation of more than 155,000 units.
Same with another measure known as “high-income deregulation,” which allows a landlord to deregulate a rent-stabilized unit if the tenant makes more than $200,000 a year for two straight years. No longer will the landlord have the right to ask for your tax returns.
That boiler update or kitchen renovation your landlord elected to perform is no longer going to cost you a fortune in perpetuity.
Renovation increases in the form of major capital improvements (MCIs) and individual apartment improvements (IAIs) were a big target of rent reform activists. These measures, which allowed landlords to use renovation spending to exact permanent rent increases on tenants, were loopholes that invited fraud and tools of displacement. Landlords, on the other hand, said they encouraged investment and maintenance in older housing stock.
Currently, landlords who performed MCIs are entitled to raise rents by as much as 6% a year, in perpetuity. But under the new law, they will now be able to raise rents by only 2% a year to help pay for those renovations. On top of that, those increases can only be for 30 years.
Similarly, the proposed law caps spending on IAIs by limiting the renovation amount to a maximum of $15,000 per unit, every 15 years. As an example, under the present rules, a landlord of a building with fewer than 35 units could apply for as much as $40,000 on IAIs and pass 1/40th of the costs to renters through a permanent monthly increase. Now, the same landlord can only apply for $15,000 and can pass along only 1/168th of the costs.
The lease renewal process for tenants on preferential rent will be a whole lot less stressful.
Roughly one-third—266,000—of the city’s one million rent-regulated units receive preferential rent, which means a rent lower than what is legally permitted. Under the old law, landlords who grant tenants preferential rents have been able to raise rents to the maximum allowable amount during lease renewals. In practice, this has meant that preferential rent tenants have faced the possibility of large and unexpected rent hikes during lease renewals.
Going forward, preferential rents will become the base rent for the entire occupancy of the tenant, meaning landlords can only raise the rent according to amounts determined by the Rent Guidelines Board, the NYC agency that sets the increases for rent-stabilized units.
Co-op and Condo conversion process is going to be a lot harder.
Over the decades, co-op and condo conversions have been a common investor strategy in the city’s rent-regulated market and, as a result, contributed to the loss of rent-regulated units. Currently, 15% of apartments have to be sold (to either residents or outside investors) in order for a building to convert to a co-op or condo. But now, the new law sets a much higher bar: 51% of tenants who live in the building must agree to buy units for a conversion to happen.
Security deposits will now be limited to one month’s rent for all tenants (even market rate tenants), and it will be easier for all renters to get their security deposits back. There was already a similar rule for regulated renters in New York
Notice of Increases and Non-Renewal
Landlords of market rate apartments are now required to provide tenants with notice if they intend to raise the rent by more than five percent. They must also notify tenants if they do not intend to renew a lease.
If a tenant has a lease of less than one year, a 30-day notice is now mandatory. A 60-day notice is required for renters who have lived in an apartment for more than one year, but fewer than two years, or have a lease of at least one year, but less than two years.
Tenants who have lived in a unit for more than two years, or have a lease of at least two years, must get a 90-day notice.
Landlords of regulated apartments were already required to give 90- to 120-day notices.
New eviction protections
One of the most significant changes is a new protection that bolsters a tenant’s defense against a landlord pursuing a retaliatory eviction. The change applies to all renters.
A judge may now stay an eviction for up to one year, rather than six months, if the tenant cannot find a similar dwelling in the same neighborhood after a reasonable search.
And a court must also consider how an eviction may exacerbate a tenant’s health condition, affect a child’s enrollment in a local school, and other factors.
Unlawful evictions, such as when a landlord illegally locks out or uses force to evict a tenant, would become a misdemeanor punishable by a civil penalty of $1,000 to $10,000 per violation.
These new protections would complement a 2017 law that made New York the first city to implement a universal right to counsel, guaranteeing free legal assistance for tenants facing eviction (supposedly – more on this next month).
Notices to Cure
One of the scariest things a tenant faces is a Notice to Cure posted on her apartment door, giving her 10 days to correct some condition the landlord is complaining about or be evicted. Tenants now have 30 days to fix lease violations, rather than 10 days under previous rules.
Application fees, including fees for a background check, are now limited to $20.
Blacklists. Tenants who were seen as troublemakers by landlords—perhaps for standing up for their rights in court—sometimes end up on blacklists that would be shared among rental agencies. That practice is now banned, prohibiting landlords from discriminating based on a tenant’s history in housing court.
If a tenant needs to move out mid-lease, a landlord is now required to try to rent the apartment to someone else, making it harder for owners to keep a unit vacant and charge the tenant for the remainder of the lease.
Right to investigate overcharges. Previously, rent-regulated tenants had what was known as a four-year “look back” rule, where they could hold a landlord accountable for overcharges for four years. Now a tenant who suspects fraud can request a full rental bill history and can make the state investigate and penalize landlords for overcharges made over the last six years.
The new rent laws won’t expire.
Under the new bill, the rent laws will no longer sunset, meaning that they will no longer come up for renewal every four years.
Still on the table: There was broad support for barring the eviction of all tenants, not just rent-regulated tenants, or non-renewal of leases except for “cause.” That change didn’t make it through this year but it will be back on the agenda next year, when our part-time State legislature finishes its six-month hiatus.
Meanwhile, tenants rights have expanded greatly, and many fewer apartments, especially in the Village, will lose their rent-regulated status. This means more long-time Village renters can stay around and enjoy our wonderful community as they grow older.
But for those with landlords who don’t care about you or the law—remain vigilant. Always ask for legal assistance.
Arthur Schwartz is the Male Democratic District Leader in Greenwich Village.