By Sabina Mollot, Town & Village, and Roland Li
Lawmakers in Albany have agreed to extend for four years rent regulations affecting over 1 million apartments in New York, while increasing the threshold for deregulation.
Apartments that exceeded $2,500 in monthly rent would be deregulated, up from $2,000. Tenants earning $200,000 or more each year would be excluded from the regulations, which restrict annual rent increases, up from a previous limit of $175,000 a year.
However, there will be no change to vacancy decontrol under the final agreement, reversing an April vote by the Democrat-controlled Assembly.
Some tenant advocacy groups expressed disappointment towards the final agreement.
“The $500 increase to the Vacancy Destabilization threshold does not even come close to levels needed to account for inflation since 1993 (when Vacancy Destabilization was first created) and will have little impact on the long-term erosion of affordable housing,” said the Real Rent Reform Campaign in a statement.
Although the central question of rent regulations has been decided, uncertainty remains.
According to State Assembly Member Brian Kavanagh, there will be no effect on the outcome of the “Roberts v. Tishman Speyer” decision, which ruled that Tishman had illegally deregulated apartments while receiving a J-51 tax abatement for capital improvements.
Parts of the Republican-controlled Senate had hoped to legislatively reverse the decision through a bill, sponsored by upstate Senator Catharine Young and supported by the Real Estate Board of New York. The bill would have allowed owners of J-51 buildings who deregulated units to pay back the abatements and avoid any legal ramifications.
Steven Spinola, president of REBNY, had previously said that the reimbursements would have given the city $200 million in revenue.
But in the end, State Democrats blocked the bill. “We refused to give it to them,” said Kavanagh. “So it won’t affect Roberts in any way.”
Alexander Schmidt, the attorney for the tenants in “Roberts v. Tishman Speyer,” expressed support for the decision.
“The plaintiffs are enormously grateful for the vigorous efforts of Assembly Member Kavanagh and Senator Duane to defeat the Senate Republicans’ bill that would have thrown their case out of court and reversed their hard-earned gains,” said Schmidt “This is a victory for the rule of law and for the 40,000 tenants in wrongly deregulated J-51 apartments citywide, and a needed signal to landlords that they cannot violate the rent laws with impunity.”
In other possible changes, the amount of money landlords could factor into rents based on renovations costs would decrease from 1/40th of the cost to 1/60th. Additionally, the process of making those improvements would require more oversight and landlords would also be limited to one “vacancy bonus” per year on any apartment.
Some details still needed to be worked out, as of late Tuesday after that day’s legislative session, including, said Kavanagh, whether the bill would affect small buildings with 25 or fewer units.
“This isn’t final, but I think it’ll stick” said Kavanagh.
Landlords can still raise rents because of major capital improvements (MCI). The State Assembly had sought to end tenants’ payments for building improvements through MCIs once the projects were paid for, instead of keeping them as ongoing portions of tenants’ base rent.
In a victory for developers, the 421a tax exemption for new rental buildings with affordable housing was. Developers had said the exemption was crucial for making new rental developments financially viable.
In addition to rent regulations, lawmakers agreed to a property tax cap that would will limit annual increases to 2% in upstate New York. Meanwhile, negotiations over gay marriage continue.