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New Rent Law Includes Tenant-Friendly Tweaks

Nathan Tempey

Published Jul 23, 2015

Modified Jul 24, 2015

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Nathan Tempey

Published Jul 23, 2015

Modified Jul 24, 2015

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It's been a month since the New York state legislature delivered a new, way-behind-schedule set of rent regulations that do basically nothing to staunch the hemorrhaging of affordable housing and—wouldn't you know it—lurking in the 72 pages of Assembly bill 8323, there are a few bandages.

Here's a sampling:

Rent-stabilized building owners doing building-wide infrastructure improvements used to be able to permanently increase the rent by an amount that would take seven years to recoup, or 1/84th the cost of the job. Now they can only increase it by an amount that would take eight years to recoup, or 1/96th the cost, for buildings smaller than 35 units, and nine years, or 1/108th, for larger ones.
New tenants paying less than what the landlord could be charging for a rent-stabilized apartments can no longer have their rent bumped up to the maximum rate allowed when their first lease runs out. Instead, it can only go up five percent if the last tenant moved out a year ago, 10 percent if two years, 15 percent if three, and no more than 20 percent, until reaching the most the landlord could charge under the stabilization formula, or the "legal rent."
The new law slightly increases penalties against landlords found to have harassed tenants. But given that between 2008 and 2014, only 44 of 3,200 harassment complaints ended in a guilty finding, that's not likely to send shock waves through the system.
It used to be that landlords could automatically increase the rent of a rent-stabilized apartment by 20 percent when someone moved out, plus a percentage of whatever renovations they claim to do (PDF). If the rent amount after that was over $2,500, the apartment was deregulated. They can still do all of that, except the market-rate threshold is now $2,700, and instead of being a flat rate, it is tied to the increases set by the city's Rent Guidelines Board.
Also, now the rent has to go above the threshold before a tenant leaves to become destabilized. That can still happen with major capital improvement increases, but it leaves much less room for landlords to claim a stove cost $20,000 and bet on a future "market-rate" tenant not figuring out the byzantine process of challenging the increase within four years, after which the illegal rent rate becomes legal.

That last tweak is a bit complicated, and landlord advocates dispute its meaning, but it would be a big deal if it the tenant-friendly interpretation is upheld in court. Under the previous rent law, the Alliance for Tenant Power estimated New York City would lose 100,000 rent-regulated apartments in the next four years. Now, the group puts that figure at 35,000. Still, that's a huge number of apartments, and market-rate rents here don't exactly reflect market-rate wages—the median rent is projected to be nearly 60 percent of the median income this year.

"This is not a victory," said Delsenia Glover, an organizer with the Alliance. "These are very, very tiny tweaks to the rent laws. Even though they're in favor of tenants, this is nothing to be excited about."

As for how all those nuggets got into the revised rent law, no politician is exactly crowing about it, but they don't seem to have been accidental, either. Lobbyists for the Legal Aid Society spent three weeks in Albany during the tail end of the legislative session. The organization's attorney in charge of civil law reform, Judith Goldiner, downplayed their role, saying they would wait outside offices, make recommendations to legislative aides and lawyers, and "hope they listened." But another tenant advocate said Goldiner and two others "scrutinized every word" of the legislation. Then Assembly Speaker Carl Heastie went and agreed to a deal no Democrat in regular touch with tenants could stand behind, according to the advocate, organizer Esteban Girón of the Crown Heights Tenant Union.

"We felt we were going to get at least one major thing. from one day to the next, when the speaker basically chose to accept this deal," he said. "By doing so it left the Assembly in a really difficult position. Most [sympathetic legislators] had significant disagreements with what the speaker had agreed to, but to vote against it would be to vote against their new speaker."

This could explain the absence of gloating from politicians. Renter groups active in Albany were pushing to eliminate the 20 percent vacancy increase, the deregulation threshold, making renovation increases last only until the job is paid off, and tying preferential rents to to the Rent Guideline Board's annually set increases. None of that happened.

"We were extremely disappointed to not be able to get our top priorities accomplished," Goldiner said, explaining that the indictment of former Assembly speaker Sheldon Silver and Senate majority leader Dean Skelos on corruption charges should have created momentum. "We felt going in that this was a year of a lot of possibility, especially seeing two of the three major players going down basically because of their ties to real estate."

Landlord partisans, on the other hand, are disputing the intent behind the new law, saying that it wasn't meant to give tenants the concessions advocates say it was.

"The statute as a whole doesn't change anything," Matthew Brett, a partner at a landlord-side law firm, told the Wall Street Journal. The tenants' interpretation "is basically sort of a reach."

Frank Ricci, spokesman for the Rent Stabilization Association, a lobbying group that might be more accurately represented with the word "End" in front of its name, concurred. He told Gotham Gazette, "The bill in its entirety did so much on so many things that there are drafting inconsistencies throughout the bill. It is not pristine and clean as it has been in past years."

Lawyers in both corners think the fate of the new language could end up being decided in court. In the meantime, activists are reserving special ire for Gov. Cuomo, who Glover said "is responsible for the terrible deal that we got," and gearing up for four years from now, when the regulations expire once more.

Tagged

andrew cuomo

crown heights tenant union

easter eggs

legal aid society

rent regulation

Tenants and Neighbors

Nathan Tempey

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