The campaign for rent reform in New York, explained

With just days to go before the laws governing rent-regulated apartments expire, members of the state legislature have reportedly reached a deal to not only strengthen those laws, but also extend them to even more rent-burdened tenants across the state.

The reforms that the state Senate and Assembly have agreed on—and that Gov. Andrew Cuomo may ultimately sign into law—are ones that tenants’ rights advocates believe will help alleviate New York’s housing woes, and that landlords say will ultimately hurt building owners and renters.

“These reforms give New Yorkers the strongest tenant protections in history,” state Senate majority leader Andrea Stewart-Cousins and Assembly speaker Carl Heastie said in a statement. “For too long, power has been tilted in favor of landlords and these measures finally restore equity and extends protections to tenants across the state.”

Those reforms are a reaction to the well-documented affordable housing crisis affecting millions of New Yorkers. Even though New York City has built an unprecedented number of affordable apartments since Mayor Bill de Blasio was elected, questions of who can actually afford them linger. The city has lost thousands of rent-regulated apartments due to laws that make it easier for landlords to take them out of regulation, while the cost of living has far outpaced residents’ ability to pay ever-rising rents.

And it’s not just a citywide issue: It’s estimated that around 3 million New York state residents are renters, and close to half of them are rent-burdened, or paying more than 30 percent of their annual income in rent. But outside of the five boroughs, tenants have fewer protections against predatory landlords or the whims of the real estate market. Reforming the current rent laws, advocates argue, will stanch the loss of rent-stabilized apartments, and ultimately keep more New Yorkers in their homes.

But the real estate industry has pushed back against the proposed reforms—which include things like eliminating vacancy decontrol and closing the preferential rent loophole—and argue that these changes will make it more difficult for small landlords to maintain aging buildings, and will ultimately make the housing crisis worse.

Confused? Here’s everything you need to know about the rent reform campaign.

The goal of “universal rent control”

Tenants’ rights advocates have, since last year, been pushing a platform called “universal rent control” that incorporates several interconnected pieces of legislation. These would affect both New York City and the rest of the state in various ways, but the ones most relevant for city dwellers include:

• Ending vacancy decontrol: When the maximum legal rent for a rent-stabilized apartment reaches $2,733/month, it can revert to market-rate after a tenant breaks the lease. Advocates say this has led to the loss of thousands of rent-stabilized units since it was enacted in 1994.
• Ending the “vacancy bonus”: Tied to vacancy decontrol is the “vacancy bonus,” which lets landlords hike rents by 20 percent in between tenants—a move that advocates believe is used to harass and evict residents of rent-stabilized units.
• Closing the major capital improvements (MCI) and individual apartment improvements (IAI) loopholes: Landlords can raise the rents on apartments if they make renovations that “directly or indirectly benefit all tenants” (in the case of MCIs) or “when there has been a substantial increase of dwelling space, an increase in the services provided by the owner, improvements installed in the housing accommodation, or new furniture or furnishings provided by the owner” (for IAIs). Advocates argue that these are abused by landlords who let their buildings fall into neglect before making necessary repairs (and jacking rents), or who make unnecessary repairs as a way of hiking rents. (The Trump family was found to have abused these provisions in a New York Times investigation.)
• Closing the preferential rent loophole: Landlords who manage rent-stabilized apartments have the option of offering units to tenants for a price that’s lower than the legal regulated rent. But they can also raise the rent to the legally mandated limit when a lease is renewed, which often leads to unexpected, massive hikes that burden tenants. Proposed legislation would make preferential rents permanent.

Another major element of the platform is “good cause” eviction legislation, proposed by freshman state Sen. Julia Salazar. The bill would “prohibit the eviction of residential tenants or the non-renewal of residential leases without good cause”—or, as Housing Justice for All explains, “would bring the right to a renewal lease at limited rent increases set by a local price index to all tenants.” A big piece of this particular bill is that it would apply to buildings with four or more rent-stabilized apartments—the current rules only apply to buildings with six or more units—opening up protections to a wider swath of New Yorkers.

The “universal” part comes in because advocates want these bills to cover not just downstate New York (including the five boroughs and a handful of counties outside the city), but the rest of the state.

The proposed legislation

The state Senate and Assembly agreed on legislation that would include some of those proposed reforms, and would notably make the rent laws permanent—previously, they were set up to sunset (and thus need to be reformed) every four to eight years.

The agreement includes many of the protections that tenant advocates have pushed for under the banner of “universal rent control,” though it did not go quite as far as some activists may have hoped. Instead of eliminating the major capital improvements (MCI) loophole, the bill calls for reforming it so landlords who make major renovations can raise rents by 2 percent (rather than 6 percent as before), and narrowing the scope of what constitutes an MCI. It also does not include a “good cause” provision.

Here’s what is included:

• Ending high-rent vacancy deregulation and the 20 percent “vacancy bonus” landlords can use to bump rents when there’s tenant turnover.
• Preventing landlords from using the preferential rent loophole to drastically increase rents when a tenant renews their lease.
• Making the increases from MCIs and individual apartment improvements (IAI) temporary (to expire after 30 years), and capping how much landlords can spend on IAIs.
• Calling for more oversight by the Division of Housing and Community Renewal (DHCR), which oversees rent regulated apartments.

Lawmakers have also created an avenue for other locales in New York state to opt in to the rent regulation program—it currently only applies to NYC, along with Westchester, Rockland, and Nassau counties—provided they meet certain vacancy thresholds.

A brief history of rent regulation

The laws governing New York City’s rent-regulated apartments go back to 1943, when the state first enacted a rent control program. In the more than seven decades since, there have been a number of changes that have, at various points, either strengthened or undermined rent regulation in the city. The first Rent Stabilization Law was enacted in 1969 in response to high vacancy rates in the city (and the Rent Guidelines Board, which determines annual increases to the monthly cost of apartments, was established), but by 1971, vacancy decontrol was enacted on all rent-stabilized apartments.

That led to the Emergency Tenant Protection Act of 1974, which overturned that vacancy decontrol order and extended rent regulation to some counties outside of New York City. Since then, there have been several amendments to the Rent Stabilization Law—in 1993, for example, the state adopted high-rent and high-income deregulation, wherein apartments over $2,000/month (now $2,733/month) can be taken out of rent stabilization once the lease turns over. The last update to the law was in 2015.

Why is the push for reform happening now?

New York updates its rent laws every few years, with the Rent Act of 2015—which amended the vacancy decontrol threshold to $2,733/month, among other things—the last time that major changes were made. Those laws will sunset on June 15, making this, at the most basic level, the right time for rent laws to be reconsidered.

But on a larger scale, the leftward slide of New York’s state legislature—where both houses are now controlled by Democrats after the 2018 midterm elections—laid the groundwork for the current push for reform. Insurgent Democratic candidates like Salazar, Alessandra Biaggi, and Zellnor Myrie unseated incumbent politicians who advocates viewed as roadblocks to getting tenant-friendly legislation passed. That, plus the tentative support of Gov. Andrew Cuomo, has led to a groundswell of support for reform.

Scott Heins

Additionally, some of these bills have been languishing in the state legislature for years. A bill to end vacancy decontrol, for example, was first introduced back in 2009 and passed in the state Assembly, but died in the state Senate.

Who supports the reforms?

Housing Justice for All, an advocacy group comprising dozens of community and tenants’ rights organizations throughout New York state, has been leading the charge on rent reforms. The group garnered a major endorsement in the 2018 gubernatorial primary when Cynthia Nixon, who challenged incumbent Gov. Andrew Cuomo, made universal rent control one of the major tenets of her platform.

Since then, Cuomo has also signaled his support for some of the reforms—specifically ending vacancy decontrol and closing the preferential rent loophole. In a statement issued on June 5, Cuomo said that “I am ready to sign the bills if they pass.”

Other tenants’ rights groups, including the Association of Neighborhood and Housing Development and the Upstate Downstate Alliance, endorsed the proposed legislation.

Many of the state legislators who ousted members of the Independent Democratic Conference, a group of rogue Democrats who caucused with Republicans, are also supporters. Sen. Alessandra Biaggi, for example, is a co-sponsor of every piece of legislation that’s part of the universal rent control platform; Salazar’s good cause eviction bill was the first piece of legislation she introduced.

At the city level, many City Council members—including speaker Corey Johnson, who recently testified in favor of renters in Albany at a recent Assembly hearing—endorse the full package of bills, as does public advocate Jumaane Williams, who was Nixon’s running mate.

In a statement issued the day after the legislative deal was announced, Mayor Bill de Blasio—who had previously written a New York Daily News op-ed supporting reforms—expressed his support for the deal. “Tenants have pounded on Albany’s door for decades for the protections they deserve. We’ve stood with them, fought for them tooth-and-nail, and now the wait is finally over. Our State Legislature has answered the call,” the statement reads. “This is a remarkable achievement that will halt displacement, harassment and unjust evictions, and keep working families in the homes they love. Combined with the City’s rapid pace of building and protecting affordable homes, these reforms mean we can go from just holding the line to actually growing the number of apartments New Yorkers can afford.

Who’s against rent reforms?

Landlords, obviously. The group Taxpayers for an Affordable NY—which includes landlord-friendly organizations like the Real Estate Board of New York and the Rent Stabilization Association—called on Cuomo to outright reject the reforms proposed by the Senate and Assembly.

“This legislation fails to address the City’s 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,” a statement from the group reads. “This legislation will not create a single new affordable housing unit, improve the vacancy rate or improve enforcement against the few dishonest landlords who tend to dominate the headlines.”

John Banks, the president of REBNY, told Curbed in March that the proposed reforms “do nothing to ease vacancy rates, make apartments more affordable or create a single new affordable unit. Instead, they threaten to put small landlords who own the majority of the city’s rent-regulated units in financial crisis and stifle the construction of affordable housing in the future.”

What does this mean for rent prices?

It’s unclear at this point—but the campaign for reform has extended to the city’s own discussion of how much rents should be raised for 2019, a debate currently happening through the Rent Guidelines Board’s annual hearing process.

Landlords of rent-stabilized buildings have seen their operating costs (and profits) go up, leading them to argue for high rent hikes. Tenant advocates, meanwhile, have argued once again that the city should enact a rent freeze, keeping the price of rent-stabilized apartments as-is.

It seems likely that increases of as much as 3.75 percent will be enacted, but the RGB still has a few more hearings before it casts its fina vote on June 25—which is, crucially, a week after the rent laws will be decided in Albany.

What happens next?

The laws expire on June 15, and the legislative session in Albany ends on June 19, so the clock is ticking for the Senate and Assembly to get a bill passed, and ultimately signed by Cuomo.