NYC Real Estate & Tenant Rights Laws Undergo Drastic Changes

The Democratic win back in November 2018 means that after a decade of Republican control, tenants’ rights advocates are now in a position to provide the long-awaited reforms that were contingent on a Democratic majority. Real estate lawyers around NYC are gearing up for an influx of contract litigation cases based on the new laws. June 2019 marks the renewal of New York’s rent stabilization laws – meaning the ambiguity of the current laws that have troubled advocates for years are up for being amended or closed, such as:

  • Vacancy decontrol – initiated by a law passed by the City Council in 1994, landlords of rent-stabilized apartments requesting a minimum of $2,000 are permitted to increase that amount a particular percentage yearly. For renters earning $250,000 plus per year the increase can occur when renewing the lease. Furthermore, landlords are eligible to increase rent even more by making minute upgrades and submitting high repair costs, shooting past the $2,000 minimum retroactively. Permanent deregulation is established once the unit reaches a threshold of $2,733
  • Eviction Bonuses – allows landlords to increase rent by 20% once the apartment has been vacated.
  • Preferential rent – permits landlords who are renting apartments below the legal minimum to increase the rent up to the market rate, or above, once a lease has been renewed which would otherwise not be legally allowed.
  • Major capital improvements – landlords are permitted to increase rents up to 6% a year so that funds could be raised for upgrades building-wide, which advocates and tenants state are insignificant or unnecessary.

As a result of the above loopholes, there has been a decrease in rent-stabilized apartments. Toughening New York City’s rent laws has been a priority for tenants’ rights groups in the midterm elections, driving out candidates that weren’t on board.  These loopholes they are hoping to reform never received votes, though they have prevailed as some kind of bill in the Senate.

NYC is currently in the middle of an affordable housing crisis. According to an NYU Furman Center report entitled “State of New York City’s Housing and Neighborhoods in 2017” between 2007 to 2017 the number of residents in homeless shelters went up 77%, the proportion of affordable housing when down 12.9 percentage points from 2006 to 2016. As a result, setting the proposed reforms in motion could not come at a better time.Tenants and advocates face two major obstructions to any significant reforms to rent – a stream of funds from the real estate sector and  Governor Andrew Cuomo’s veto pen. Some are convinced that Cuomo used the Independent Democratic Conference (IDC) to frustrate and circumvent rent reforms and other progressive legislation. Meanwhile, the Real Estate Board of New York (REBNY) has been steadily increasing its donations this election to Democrats.

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