New York City

Cuomo agrees to sign sweeping rent regulation reforms

The reforms reign in many programs advocates said were abused to push out rent-regulated tenants.

June 12, 2019 Paula Katinas and Jeffery Harrell
Tenants rally in front of Brooklyn Housing Court. Photo by Ignacio Foster via UHAB.

The Democrat-controlled state legislature reached an agreement last night to implement sweeping reforms that will expand tenant protections and reduce landlord abuse.

It’s a significant win for a statewide coalition of tenant activists who campaigned for months to support a set of nine bills they called “universal rent control.” The deal reached on Tuesday contains nearly all of these proposals, or modified versions of them.

The reforms include closing the preferential rent loophole and significantly scaling back the Major Capital Improvement program. Tenant advocates claimed landlords abused these to create rent spikes in rent-regulated apartments in order to push out tenants and deregulate units.

More than 2 million New York City residents live in rent stabilized or rent controlled housing units.

The new legislation, called the Housing Stability and Tenant Protection Act, is expected to be voted on before June 15, the day the state’s rent laws expire.

Under the current laws, preferential rent allows landlords to offer discounts to tenants. Upon renewal of their lease, however, landlords could hike rent up to the maximum . That’s no longer possible under the new deal, which makes preferential rents permanent for the length of the tenancy.

MCI, a program that allows landlords to use rent hikes to cover self-reported expenses from building-wide renovations, is extremely limited in the deal as well. The amount a landlord can raise rents is lowered from 6 percent to 2 percent, and the increases could only remain in effect for 30 years. Previously, the rent increases lasted forever. It also limits the types of work can be covered by the program.

All the changes to the MCI program would also apply to anyone who had their rent raised through MCI in the last seven years.

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The deal also ends vacancy decontrol, which allows landlords to convert rent-stabilized units to much more expensive market-rate apartments when a tenant moves out, and when the cost of rent hits a threshold. A government report shows that more than 300,000 rent-stabilized units have been lost since vacancy decontrol was created in 1994.

Furthermore, the deal caps security deposits for all renters, makes the “tenant blacklist” illegal, and makes “unlawful eviction” a criminal offense.

Notably missing from the deal was State Sen. Julia Salazar’s “Good Cause Eviction” bill, which would have protected all tenants from eviction for nonpayment in certain scenarios.

The deal will also not restabilize the more than 300,000 units which have been deregulated, as tenant activists were hoping.

The legislature has made these reforms permanent. Traditionally, rent laws have been set to expire every four years, leaving them open to tampering as the political landscape of Albany changes.

“The tenant movement is taking back the protections we lost as a result of decades of Republican and real estate control in Albany,” Cea Weaver, coordinator of a statewide tenant rights campaign called the Housing Justice for All Campaign, said in a statement. Weaver is also in leadership in New York City’s chapter of the Democratic Socialists of America.

The reforms still need to be signed into law by Gov. Andrew Cuomo, who signaled his support for the package during a press conference Wednesday afternoon.

“I believe this is the best tenant protections [lawmakers] will pass, and I will sign it,” Cuomo said, according to the New York Post.

Lawmakers react

Brooklyn lawmakers expressed satisfaction and relief at reaching an agreement.

State Sen. Andrew Gounardes, a Democrat representing Bay Ridge and other Southwest Brooklyn neighborhoods, said the new law will help tens of thousands of people in his district.

“The Housing Stability and Tenant Protection Act will provide New York’s tenants with the strongest protections they have ever had and will be a big step forward in addressing skyrocketing housing costs and homelessness. For the tens of thousands of working-class and middle-class families in our district who are renters, these sweeping tenant protections will provide much-needed relief,” Gounardes, a freshman lawmaker, told the Brooklyn Eagle in an email.

Gounardes vowed to conduct an education campaign to familiarize his constituents with the new laws. “I look forward to working with both tenants and landlords in the district to ensure to they understand the effects of this legislation and their rights under the new rules,” he said.

Another freshman lawmaker, state Sen. Zellnor Myrie, called the reforms the most substantial housing measures in more than 70 years.

“This bill is the strongest package of tenant protections New York has seen since World War II. For decades, our communities have lost hundreds of thousands of rent regulated units, but with this legislation, we are putting power back in the hands of tenants,” said Myrie, a Democrat whose district includes parts of Sunset Park, Park Slope and Crown Heights.”

Assemblymember Mathylde Frontus, a Democrat whose Bay Ridge-Coney Island district contains more than 18,000 rent-regulated apartments, said the new law will offer tenants stability.

“I’m very happy with the tenant protection package that was agreed to. By making common-sense rent protections permanent, we provide all New Yorkers a degree of stability that gives them a chance to catch their breath financially. Among the many good things this package of laws provides, it prevents price gouging through vacancy bonuses that previously allowed landlords to raise rent by as much as 20 percent and allows the preferential rent rate to become permanent for the life of the tenancy,” she said.

Republican Assemblymember Nicole Malliotakis told the Eagle she planned to review the new legislation.

“My concern is striking a balance where tenants are protected and owners can continue to make improvements for the health and safety of occupants. One thing that needs to be addressed is the skyrocketing property taxes that  have led to higher rents, empty storefronts and an unsustainable rise in the cost of living for homeowners and tenants alike,” said Malliotakis, who represents parts of Bay Ridge and Staten Island.

Landlord industry disappointed

Property owners expressed disappointment with the bill, charging that it will hurt small, mom-and-pop landlords.

The group Taxpayers for an Affordable New York issued a statement slamming the bill and warning that the legislation will not do what it is intended to do.

“This legislation fails to address the city’s affordable 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,” the statement read.

Update (3:52 p.m.): This article was updated to include reactions from Brooklyn lawmakers.

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