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Has the moment finally arrived for housing activists seeking more robust rent laws in New York City?
For years, Republicans controlled the State Senate, and stymied Democratic efforts to strengthen laws affecting about one million rent-regulated apartments in the city.
But with a newfound monopoly over the state legislature and governor’s mansion, Democrats have wasted little time introducing a cadre of bills aimed at protecting tenants.
Amid an affordable housing crunch and a spike in homelessness statewide, housing activists see the next few months as a crucial opportunity to pass previously unimaginable reforms now that elected officials have signed off on a state budget and the current rent laws are set to expire in mid-June.
But the real estate industry — which demonstrated recently that it still had sway in Albany — is also bracing for the upcoming clash, warning that the proposed changes could hurt landlords.
Small building owners in particular are fretting over changes to laws that allow them to raise rents when they make building repairs, cautioning they could worsen living conditions for tenants.
A push for ‘universal rent control’
You may have heard of “universal rent control” over the last few months from the new wave of progressive lawmakers in Albany or because Oregon recently passed legislation that would limit rent increases across the state.
But what does it mean in New York?
It’s shorthand for a bevy of renter-friendly reforms that a large coalition of tenant groups is lobbying for.
Democrats in both chambers have introduced legislation aimed at curbing homelessness and tenant harassment, and closing loopholes landlords use to hike up rents and lift affordable apartments out of rent regulation.
There are also ambitious proposals to shield tenants who are currently unprotected from eviction and to expand rent stabilization to other counties beyond New York City and its suburbs.
“There is a sense that this is a big moment of opportunity to change some stuff that should have changed a really long time ago if it wasn’t for the power of the real estate lobby,” said Benjamin Dulchin, the executive director of the Association for Neighborhood & Housing Development.
Halting the loss of rent regulated apartments
A top priority of tenant groups is to abolish vacancy decontrol, a provision that allows landlords to deregulate apartments and convert them into units with market-rate rents when they become vacant and their rent surpasses a statutorily set threshold; currently it is $2,774.77.
For years, Democratic lawmakers unsuccessfully pushed to eliminate the provision — which has led to the deregulation of more than 155,000 units since 1994 — facing resistance from Senate Republicans.
But with the backing of an all-blue legislature, Gov. Andrew M. Cuomo vowed to end vacancy decontrol earlier this year.
A bill would also eliminate the so-called vacancy bonus for rent-stabilized apartments, which allows landlords to raise rents by up to 20 percent whenever a tenant moves out.
In 2017, there were more than 966,000 rent-stabilized apartments, typically located in buildings built before 1974, with six or more units, and also constructed or renovated since then with special tax benefits.
Every year, a city board decides the allowable rent increases for these apartments; increases have ranged from 0 to 2.5 percent in the last few years.
Solidifying preferential rents
For about one-third of all rent-stabilized tenants, landlords charge a preferential rent — a discounted rent lower than the legal regulated rent. Landlords might set a preferential rent if, for example, they’re having trouble filling an apartment.
But they can legally charge the higher regulated rent when a tenant renews their lease, sometimes resulting in steep rent increases, according to advocates.
Legislative proposals would make preferential rents permanent.
Take the case of Winsome Pendergrass, 60, who moved into a two-bedroom, rent-stabilized apartment in Flatbush, Brooklyn in 2010.
Ms. Pendergrass said she was attracted to the apartment because of its $1,200 monthly rent, but she didn’t know it was a preferential rent at the time. She was surprised when her landlord increased the rent to $1,400 when she renewed the lease two years later.
By 2018, her rent had shot up to $2,100, partly as a result of improvements made to the building’s roof and windows, she said.
“It was a big whopping leap,” said Ms. Pendergrass, who juggles two jobs as a nursing assistant and a home-care aid for older adults.
She ended up moving farther east to Brownsville, also in Brooklyn.
“A lot of us, my color people, are being pushed back to god knows where and living somewhere I don’t want to live in,” said Ms. Pendergrass, who is black and a member of New York Communities for Change. “It’s displacement.”
Uncoupling rent and building repairs
Another bill would eliminate a provision known as major capital improvements, which allows building owners to pass on some costs of building-wide improvements, like elevator or roof repairs, to tenants through permanent rent increases.
A similar policy allows rent increases when apartments are renovated, but tenant groups say a lack of state oversight leads landlords to inflate costs.
Advocates argue that unscrupulous landlords use the provision to push out tenants in order to raise rents beyond the limits established by the Rent Guidelines Board every year.
Much of the debate will likely focus on whether to keep, reform or entirely scrap these provisions.
And what do landlords say?
Well, they’re not happy.
Real estate trade groups said the Rent Guidelines Board over the past few years has approved only modest rent increases that have not kept pace with the mounting costs — from higher property taxes to water and sewage charges — of maintaining residential buildings.
Without the slate of provisions that allow landlords to raise rents, they won’t have an incentive to make improvements to aging buildings, said Frank Ricci, the director of government affairs at the Rent Stabilization Association, which represents 25,000 building owners.
“It’s going to have a pretty dire impact on buildings,” Mr. Ricci said. “Not immediately, but over time it’ll take its toll on the conditions of buildings in New York City.”
He said it made no sense to repeal vacancy decontrol because it was unreasonable to protect a renter who can afford to pay more than $2,700 in monthly rent.
The repeal of the provisions in question could lead to lower property values and a loss of up to $2 billion in annual property tax revenues, according to a joint analysis by the Real Estate Board of New York, an industry group, and HR&A Advisors, a real estate consulting firm.
Christopher Athineos, 49, runs a family business that owns and manages nine buildings, most of them in Bay Ridge, Brooklyn. About half of the 150 apartments are rent stabilized.
“We’re hands-on property owners,” he said. “We take pride in our buildings. But if they pass a lot of these proposals I don’t think we’d be able to maintain my buildings in the manner my tenants are accustomed to having them maintained.”
Mr. Athineos said he routinely installed new kitchens and plumbing not necessarily to raise rents, but to prevent higher maintenance costs down the road in his buildings, which are more than 90 years old on average.
Without the incentives, he said, he would likely put off renovations.
“These politicians know nothing about running housing. These are the people running Nycha,” he said referring to the dismal conditions of the New York City Housing Authority.
Are changes likely?
Short answer: Yes.
If real estate insiders and housing activists agree on one thing, it’s that Democratic-control of the legislature — for only the third time in more than half a century — all but ensures state rent laws will be revised this year.
But it’s too early to determine what the changes might look like.
Many activists and left-wing lawmakers have grown wary after the most recent budget cycle, which they said failed to deliver on key progressive policies. Others remain skeptical of Mr. Cuomo, who has raised millions of dollars from the real estate industry.
As Cea Weaver, the campaign coordinator of Housing Justice for All, a statewide coalition of tenant groups, put it: “I wouldn’t take anything for granted in Albany.”