The newly elected state assembly approved a Ten – Bill legislative package that is now before the NY State Senate. This is the first step the newly elected Democratic majority has taken towards reforming the affordable housing system which they have been campaigning on. If approved by the State Senate in June in it’s entirety it would have a monumental impact on the way affordable housing in New York is operated.
Below, our Washington Heights and Inwood Director of Sales Robert Shapiro provides is a brief description of each of the State Assembly approved bills along with a brief description:
Bill A00465 – Prohibits an owner from adjusting the amount of the preferential rent, rent charged, and paid by the tenant which is less than the legal regulated rent for the housing accommodation, upon the renewal of a lease; only allows the owner to make such adjustments upon a vacancy which is not the result of the failure of the owner to maintain a habitable residence.
What it means:
If landlords have tenants they are giving preferential rents to, they will not be allowed to raise their rent to market rent upon renewal of the lease. Only when the tenant vacates the unit will landlord be able to raise it to the registered rent. This is true, even if landlord has the preferential lease riders that state otherwise.
Impact:
This has more impact in Manhattan south of 96th Street where free market rents tend to be much stronger than uptown and the boroughs
Bill A02002 - Amends the administrative code of the city of New York and the emergency tenant protection act of nineteen hundred seventy four, in relation to civil penalties imposed for violation of administrative orders or for harassment of tenants to obtain vacancy of a unit.
What it means
Increases the financial penalties for landlords who harass their tenants to get a vacancy.
Impact:
None if you don’t harass your tenants.
Bill A01928 - Establishes a methodology for determining major capital improvements (MCI) rent surcharges based on a seven year schedule; provides that such MCI’s shall be calculated as a rent surcharge and shall not become part of the base legal regulated rent by which increases are calculated, and requires the amount thereof to be separately designated and billed as such; codifies current practices regarding the annual 6% cap on MCI increases and the methodology for determining MCI surcharges on the number of rooms; requires that rent surcharges authorized for major capital improvements shall cease when the improvement has been recovered.
What it means:
Your MCI improvements will no longer be permanently affixed to the legal registered rent. Instead they will be a separate charge which will be abolished upon the repayment of the improvement. Payments will be over a 7 year period.
Impact:
Removes motivation for landlords to make improvements to their buildings. Ultimately it will lead New York City’s already old housing stock to not be updated.
Bill A00857 - Provides that in cities with a population of one million or more, the rent following the dissolution date of Mitchell-Lama developments shall be the last rent authorized for the affected dwelling
What it means:
When the property becomes subject to rent regulation, this bill would prohibit an owner from applying for a rent increase base on “unique and peculiar circumstances”.
Impact:
Eliminates what the city believes is a loop hole and it would become more difficult to increase the rent on a unit that is coming out of the Mitchell-Lama program. This will result in less motivation for owners and developers to own, operate or develop this asset class.
Bill A01688 - Removes provisions that prohibit cities of one million or more from strengthening rent regulation laws to provide more comprehensive coverage than state laws.
What it means:
Revokes the Urstadt Law which would allow local organizations, instead of the state , to be in control of rent regulation.
Impact:
Control of all rent regulation and affordable housing would be controlled on the local level. The laws would most likely become much more favorable for the tenants.
Bill A01685 - Relates to recovery of certain housing accommodations by a landlord; limits a landlord’s ability to take possession of units for their own primary residence, permit recovery of only one unit, and restrict such ability if the tenant has occupied the apartment for twenty or more years.
What it means:
Landlords will not be able to vacate an entire rent regulated building for their own dwelling. Instead they will only be allowed one unit of a tenant who has lived there less than 20 years
Impact:
City retains more rent regulated units in the case an owner wants to move back into his / her building.
Bill A01687 -Permits the declaration of an emergency pursuant to the EMPTA for rental housing accommodations located in buildings covered by a project based assistance contract pursuant to section 8 of the United States housing act of 1937.
What it means:
Any units that opt out of the section 8 program will become subject to rent regulation.
Impact:
Tenants of section 8 housing will receive rent and eviction protection from rent regulation.
Bill A00860 - Establishes deregulation income thresholds and deregulation rent thresholds for certain housing purposes. Amends New York State’s rent regulation laws to adjust the “luxury decontrol” thresholds to account for inflation
What it means:
Increases the luxury decontrol from $2000 to $2,700 and the income threshold from $175,000 per year to $240,000. Not only are these thresholds to be increased but they are also going to be tied to an index so that they reflect inflation.
Impact:
Landlords will have to wait longer and spend more to increase the registered rents to get them above the “luxury decontrol” level. This will have more impact in prime neighborhoods where high free market rents are more achievable. These will also be permanently tied to an inflationary index that will help keep apartments under rent regulation longer.
Bill A01686 - Limits the amount of rent increase after the vacancy of a housing accommodation
What it means:
Reduces the vacancy bonus from 20% to 10% and only allows one vacancy bonus per calendar year.
Impact:
It will become harder and result in a potentially longer period in which landlords can reach the “luxury decontrol” level. More impact will be felt in neighborhoods in which the market produces stronger residential rents (i.e. Manhattan south of 96th Street)
Bill A2005 - Makes conforming technical changes to the New York City administrative code and the emergency tenant protection act relating to vacancy decontrol.
What it means:
Repeals vacancy decontrol on any unit that was rented on or after January 1, 2007 for less than $5,000 ($3,500 in Westchester, Nassau, & Rockland).
Impact:
Any unit in NYC that was decontrolled or was not under regulation that rented for less than $5,000 as of January 1, 2007 would become regulated.
Agents: Robert Shapiro