New York Legislature Reaches Deal On Sweeping, Controversial Rent Reform Package
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With four days left before the laws that govern New York City’s rent-regulated apartments are due to expire, lawmakers in the state capital reached an agreement over a package of bills aimed at bolstering protections for tenants.
“These reforms give New Yorkers the strongest tenant protections in history," Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie said in a joint 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. These reforms will pass both legislative houses and we are hopeful that the Governor will sign them into law. It is the right thing to do.”
Details on the package were released along with the joint statement Tuesday evening.
Among the changes in the new laws are the removal of the provision that allowed landlords to deregulate vacant units after their rents had hit a certain threshold or if a tenant's income was above $200K, according to the statement. The apartments would remain regulated under the new legislation.
It also repeals the vacancy bonus, which allowed landlords to increase rents by as much as 20% when a unit became vacant. Landlords who provided a preferential rent — meaning a rent lower than they can legally charge — will not be allowed to hike the rents to the full charge upon renewal.
The Major Capital Improvements and Individual Apartment Improvements programs, which have allowed landlords pass on costs of improvement to buildings and units to tenants, was not removed, but tweaked, after Gov. Andrew Cuomo and Mayor Bill de Blasio stated last week they were against repealing it entirely.
MCI rent increases will be capped at 2% in New York City, down from its current 6%. Rather than allowing the MCI increases to remain for good, they will be eliminated after 30 years. Individual Apartment Improvements will be capped at $15K in a 15-year period, over which time landlords are allowed to make three improvements at a maximum.
The laws will not sunset, so they will stay on the books unless they are repealed, whereas previous rent regulations required renewal every four to eight years, leading to cycles of hard lobbying from both sides of the issue.
The final version of the legislation also includes removing certain loopholes that allowed for rent increases and allowing municipalities across the state to enact their own forms of rent control. If Cuomo signs the package, which he has said he will do, landlords would not be able to charge tenants more than one month's rent for a security deposit.
Speculation had been building Tuesday that an agreement on the final version of new legislation was close. The current laws will sunset on Saturday, and bills need to come to the Senate floor at least three days before a vote. They are expected to be introduced on the Senate floor Wednesday.
“The best bill they can pass, I will sign,” Cuomo said at a press conference earlier on Tuesday. "If they don’t introduce the bill tomorrow, then the law will expire on Saturday. And if you want to hear an explosion in this state, you let the rent control laws expire.”
The impending laws have significantly affected the real estate industry already, with some saying uncertainty has pushed down investment sales volume in the city.
The real estate lobby had pushed hard against the reforms, and while some concessions were made in the final bill, industry officials warn that the bills will lead to far more homes going into disrepair as landlords have a smaller incentive to improve their buildings.