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Rent overhaul will wipe out local owners, warns CHIP

Governor Andrew Cuomo looks set to approve the biggest package of rent reforms ever introduced in New York.

And if he does, thousands of local owners will throw in the towel, leaving the city’s rental apartments in the hands of conglomerates, opponents are warning.

On Tuesday, the State Assembly and Senate both agreed on a slew of bills aimed at repealing vacancy decontrol, among other tenant protections. A vote is expected to take place tomorrow (Friday) and Governor Andrew Cuomo has said he would sign the legislation if it passes in both chambers.

“My point all along is that I wanted the best tenant protections we’ve ever passed in the state of New York, and I believe this is the best tenant protections [lawmakers] will pass, and I will sign it,” said Gov. Cuomo said during an unrelated press conference in Albany on Wednesday.

The package’s protections for tenants, if signed into law, would:

Make the rent regulations permanent, instead of sunsetting every four years

Repeal vacancy deregulation and high-income deregulation, which has applied to residents whose household incomes were at least $200,000 for two years

Repeal the vacancy bonus, which allows owners to raise the rents by 20 percent every time an apartment turns over

Repeal the longevity bonus, which allows owners to raise rents on an apartment for new tenants based on the length of the previous tenancy

Prohibit Rent Guidelines Boards from setting additional increases based on the current rental cost of a unit or the amount of time since the owner was authorized to take additional rent increases, such as a vacancy bonus

Extend the period tenants have to file overcharge complaints from four years to six years

Reduce the six percent cap on tenants’ rents for major capital improvements (MCI) increases to two percent while also having them be eliminated after 30 years instead of being paid in perpetuity. Additionally, 25 percent of all MCI projects would be audited to make sure they qualify for the reimbursement.

Cap Individual Apartment Improvement (IAI) rent increases at $15,000 over a 15-year-period with owners allowed a maximum of three IAIs during that time. Additionally, IAIs would last 30 years, rather than being permanently attached to the rent.

Limit a provision that allows an owner to evict tenants for the reason of the owner or the owner’s immediate family moving into the property by limiting the eviction to one unit

Keep units rented by nonprofits and individuals who’ve been housed by nonprofits in the rent-stabilization system

Limit rent increases for rent-controlled tenants to the average of the five most recent RGB-issued increases for one-year renewals and also prohibit fuel pass-along charges

Require the state housing agency, Homes and Community Renewal (HCR) to submit an annual report of actions it is taking to protect tenants.

Eliminate the option of evicting tenants when converting a building to condos or co-ops

Establish rent stabilization as an option for counties statewide

Ban the use of tenant blacklists and establish more protections for tenants who are fighting an eviction.

MIKE McKEE

TenantsPAC’s treasurer and spokesperson Michael McKee said he expects the governor to sign the legislation in full.

“The governor’s going to do it because he’s sort of trapped,” said McKee. “(If he didn’t sign) he’d be vetoing it. Andrew Cuomo has been outmaneuvered and we’re expecting him to sign the bill. They did this without consulting him and it’s driving him crazy.”

While McKee called the reforms “an excellent, excellent bill,” he also doesn’t feel that they go far enough because apartments that have already been deregulated would not be reregulated. The veteran activist said it is a fight tenants will take up next year – an election year.

The Fiscal Policy Institute said the legislation will bring stability to the market. “Ending the rent regulation expiration cycle and creating a permanent system provides surety and better tenant protections provide security. This is good news for tenants and New York as we cannot generate sustainable economic growth statewide without first addressing families’ needs for affordable housing,” said executive director Ron Deutsch.

However, the Community Housing Improvement Program, which represents many of the city’s smaller landlords, said it will fight the legislation to the last hour.

JAY MARTIN

Jay Martin, executive director, said, “The rent package currently under consideration by the legislature would devastate New York City’s housing stock and all but wipe out small, local property owners.

“Our members are proud to serve their tenants and preserve rent stabilized units in buildings that are often more than one hundred years old. By proposing temporary MCI/IAIs that would disappear after 30 years, the legislature is creating a regulatory nightmare and gutting these programs to the point of insignificance. Our members cannot afford to make 30 year, interest free loans on their property—we don’t believe any small business in any industry ever could.

“Language to cap IAI improvements at $15,000 every 10 years is simply unconscionable. Fifteen thousand dollars does not cover the most basic of repairs in New York City, let alone renovations after decades of tenancy.

“If the legislature makes that kind of demand in their rent package, thousands of owners will throw in the towel, local ownership will dry up, and apartment quality will plummet. We do not want that to happen.

“We urge the legislature to please keep that in mind and engage small owners as they finalize the details of this rent package.”

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