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How New York's Complex Rent Laws May Change—and Soon

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New York's rent regulation laws are up for renewal on June 15th. The revised laws that are decided in Albany will affect the 2.5 million New Yorkers now living in rent-regulated apartments, and they will also shape the market for Mayor de Blasio's affordable housing initiative, determining whether incoming development will add to the stock of affordable apartments or simply replace the rent-stabilized units leaving the system. Ava Farkas, executive director of the Met Council on Housing, an organization that fights for tenant rights, helped explain what exactly these laws are about, what's at stake, and what's being fought for by tenant advocacy groups.

What's Happening This June
Up in Albany, the New York State Legislature and Governor Andrew Cuomo will negotiate a bill that determines the rent laws for the next few years. The bill concerns all rent-controlled and rent-stabilized apartments, which make up about half of the rental units in New York City and Nassau, Westchester, and Rockland counties. As Farkas puts it, "It's a huge chunk of housing."

The laws were last revisited in 2011. The 2011 laws allowed landlords to deregulate apartments when tenants' rent and income reach certain thresholds. Thresholds were raised from $2,000 a month to $2,500 a month (meaning that once the rent of a regulated apartment hit $2,500, it became unregulated), with the threshold of annual household income rising to $200,000 from $175,000. The 2011 laws also required landlords to document more of the money spent to improve rent-stabilized apartments before passing along those costs to renters.

According to a 2011 Times article, "Tenant advocates had sought for more than a decade to abolish the deregulation laws, and they hoped finally to achieve that goal under Mr. Cuomo, a popular Democrat." This will be Governor Cuomo's second run with the rent laws.

The Climate in 2015
Mayor de Blasio, a strong advocate for affordable housing development, has already helped pass the smallest rent regulated increases ever, made a public registry for bad landlords, and raised water and sewer rates. "De Blasio has influence, and it's the first time in years a mayor has spoken on behalf of tenants," said Farkas.

But the ultimate decision is up to the state legislature. The Republican-controlled State Senate doesn't want to renew the rent regulation laws on their expiration date. As for the New York State Assembly, Speaker Carl E. Heastie, Sheldon Silver's replacement, expressed support to extend and strengthen rent laws. As for the Governor, "It remains to be seen if Cuomo will seize the moment and do the right thing," said Farkas. He has expressed a vague commitment to fight on behalf of tenants this June.

The law negotiations also come at a time the Senate and Assembly are struggling with scandal. Former Assemblyman Sheldon Silver and former State Senate Leader Dean Skelos have been accused of taking bribes and kickbacks from developers in exchange for tax breaks, so tenant advocacy groups feel it's the right time for tougher regulations in the real estate industry.

What's at Stake
All signs point to the rent laws being renewed; the question is if they'll be weakened or strengthened. Tenant advocacy groups are particularly fighting to close "loopholes" that are legal but weaken the current rent regulation laws and deregulate affordable housing. According to Farkas, those loopholes are vacancy decontrol, major capital improvement increases, vacancy bonuses, and individual apartment improvements.

Vacancy Decontrol
Under the current rent laws, vacancy decontrol says that if the monthly rent of an apartment reaches $2,500, and the current tenant leaves, the landlord can charge a market-rate rent to an incoming tenant. (As mentioned earlier, this number rose from $2,000 a month in 2011.) Obviously, it's in a landlord's financial interest to deregulate apartment units. But Met Council for Housing is fighting to completely end vacancy decontrol. "Then we will never have regulated apartments phase out of the system," said Farkas.

MCI Increases
Major Capital Improvements (or MCI) increases stipulate that when a landlord takes on capital improvements to their property, they can increase rent to cover the cost. Under the current rent laws, rent increases under MCI are permanent. Tenant groups, Mayor de Blasio and the Assembly are pushing to make MCI increases temporary, meaning that landlords can only temporarily raise rents until the cost of capital improvements is covered.

Vacancy Bonuses
A vacancy bonus is an additional rental increase allowed for units that become vacant after a long-term tenant has moved out. Currently, the landlord can bump up the rent by 20 percent. The Assembly has proposed reducing the percentage to a 7.5 percent increase. According to Farkas, the Met Council on Housing would like to do away with it altogether.

Individual Apartment Improvements
Through individual apartment improvements, landlords can charge tenants more if there are new renovations done to the apartment. This is a permanent price increase that the Met Council on Housing has also fought to do away with.

So What's Going to Happen?
Groups like the Met Council on Housing and Alliance for Tenant Power will be canvassing and rallying in the city and in Albany up until June 15th. There's a tone of cautious optimism among tenant advocacy groups that regulation laws will not be weakened. But the big question remains whether or not they'll be significantly strengthened come June 15th.
· Rent Guidelines Board Approves Lowest-Ever Rent Increases [Curbed]
· All Renters Week 2015 coverage [Curbed]
· All Rent Stabilization coverage [Curbed]