New York apartment guide: rent control vs. rent stabilization

New York City is known for being an extremely expensive city for renters, but there are laws in place to ensure that not every New York renter is left to the whims of the market, and approximately 1 million apartments in the city are subject to these protections. Rent stabilization is by far the most commonly applied protection, but highly coveted rent-controlled apartments still exist in some pockets of the city, too.

Such laws, however, only apply to certain buildings or certain apartments, and often have loopholes landlords are quick to take advantage of. The laws have changed over time, with the most recent updates bringing in sweeping, tenant-friendly protections that housing advocates view as a win, but landlords and property owners claim will destabilize the city’s rental market.

Simply put: New York’s rental market is complicated, but there are rent-regulated apartments to be found out there. Here, we’ve broken down what you need to know about the differences between rent-controlled and rent-stabilized units, and your chances of snagging each. (Spoiler: nigh-impossible for the former, but not too bad for the latter.)

Rent-controlled apartments

Think of these apartments as the golden ticket of the New York City real estate world. Rent control happens when a tenant has been living continuously in their apartment since July 1, 1971—yes, 1971—in a building constructed before 1947. Rent control should, in theory, guarantee tenants minor price hikes over the years, so they’re essentially paying 1970s rents in neighborhoods that have exploded in real estate value. (Though a 2019 HPD survey survey shows that the median gross rent for rent-controlled apartments is around $1,039.)

But this won’t last forever; when a rent controlled apartment becomes vacant, it either becomes rent stabilized, or—if it is in a building with less than six units—typically removed from regulation altogether.

That means the total number of controlled units has decreased as units become stabilized or deregulated. To wit: In the 1950s, 2 million of the city’s apartments were rent-controlled; now, that number is around 22,000 (according to a 2019 survey from the Rent Guidelines Board), or just about one percent of the total housing stock in New York City.

Rent controlled tenants may also be subject to rent increases each year. Apartments that are under rent control are subject to a “maximum base rent” system, meaning there’s a maximum amount that landlords are allowed to charge tenants, and they can choose to raise the maximum collectible rent—what a tenant actually pays—until they hit that max point. (The Metropolitan Council on Housing has a thorough explainer as to how this can occur.)

The maximum base rent can increase every two years, meaning rents in these apartments can skyrocket, should landlords choose to do so. (Not every landlord does, and landlords with building violations aren’t allowed to.) Under the new rent laws, the maximum collectible rent will now be limited to the five-year average of the last Rent Guidelines Board increases.

How do I get a rent-controlled apartment?

Do you have a relative occupying a one, and are you also living there? When a tenant in a rent-stabilized or rent-controlled apartment dies or moves, certain family members (including “non-traditional” family members, like unmarried couples) who have been living in the apartment have the right, under certain conditions, to take over the tenancy.

Otherwise, it’s basically impossible. Roommates not in a family relationship with the prime tenant do not have succession rights, nor do subletters or family members not living in the unit.

Rent-stabilized apartments

That brings us to rent stabilization, a much more common way for New Yorkers to secure below-market rent. While only around one percent of New York rental units are rent controlled, approximately 50 percent of the city’s units are stabilized. Rent stabilization generally applies to apartments in buildings with six or more units constructed before 1974.

Once in a stabilized apartment, your landlord can only increase your rent by a percentage determined by the Rent Guidelines Board, which becomes a hot-button issue every year. Unlike other affordable programs, the rent does not depend on your income level, the apartment size, how many people live there, or any other needs-based factors.

In the past, the biggest changes to rents in these units were impacted by how often the apartment has turned over in the past, as well as any renovations the landlord has undertaken. But the new rent laws, which passed earlier this summer, will curtail that significantly: Now, a landlord’s ability to raise the rent based on either individual apartment improvements (IAIs) or major capital improvements (MCIs) has been significantly curtailed, in theory to make it harder for shady property owners to use upgrades as a means of harassing or unfairly raising a tenant’s rent.

Other rules will also make it harder for landlords to bring rent-stabilized units up to market rate: Until very recently, stabilized apartments could become deregulated if the rent exceeded $2,700 and the tenant left, a practice known as high-rent vacancy decontrol. Thanks to rent reforms enacted by the state legislature this year, that practice has been repealed, as has a landlord’s ability to raise a stabilized apartment’s rent by 20 percent in between tenants.

How do I get a rent-stabilized apartment?

It’s not that difficult! Here’s an incredibly thorough list of rent stabilized buildings in each borough. There’s a more simple way to check if a building is stabilized here.

If you believe you are moving into a rent stabilized apartment, a landlord should include a rent-stabilization rider in all new leases and renewals informing tenants of their legal rights. It’s pretty common that landlords won’t offer those details to prospective renters, and charge unsuspecting renters more than they’re legally able. It’s often up to the renter to do their research on rent stabilization, then confront their future landlord about it before signing a lease.

What about preferential rent?

Rent stabilization sets a maximum legal rent for each apartment—as we mentioned earlier, it’s a number based on the unique history of each apartment. Preferential rent, on the other hand, is known as the rent charged to a rent-stabilized tenant that is lower than the legal rent.

While this sounds like a good idea in theory, in practice, it can lead to trouble for tenants. As a 2017 ProPublica report put it, “[i]ncreases in preferential rents aren’t subject to city-set limits governing other rent-stabilized apartments. Landlords can revoke the preferential rates, and hike rents to the legal maximum, whenever leases come up for renewal. That can mean spikes of hundreds or even thousands of dollars.”

The rent reform passed in Albany earlier this summer will narrow a landlord’s ability to enact those massive increases; under the new legislation, a tenant must be offered the preferential rent upon lease renewal, rather than getting hit unexpectedly with a massive rent hike. It gives landlords the right to charge up to the maximum legal stabilized rent only when a tenant vacates the apartment.

And to avoid the issues raised above, the Metropolitan Council on Housing has this to say: “Tenants with preferential rents are strongly encouraged to learn their rights and options at the earliest possible point.”

Correction: a previous version of this piece left out information regarding Maximum Base Rents for rent-controlled apartments; Curbed regrets the error.