While New York landlords ask the Supreme Court to dismantle rent stabilization, they are asking Albany to tweak it.
The Community Housing Improvement Program on Wednesday rebranded a proposal that’s been brewing for more than a year: a rent reset for stabilized units when a tenant vacates.
Since the Housing Stability and Tenant Protection Act of 2019 limited rent hikes, owners claim they can’t repair and re-rent tens of thousands of apartments left vacant after long tenancies. The rents are too low to justify the cost.
CHIP had described the change as a “vacancy reset.” But a policy agenda released this week recast it as the Local Regulated Housing Restoration Adjustment or LRHRA.
Rebranding the policy with a jargonny, non-threatening name was probably not an accident. But it will take more than that to get it past legislators who oppose any rent hikes beyond the meager ones allowed by the 2019 law.
Market-rate rents are near record highs in New York City and national rent increases have prompted the White House to push for more state regulation of the market.
Given the climate, the last thing many Democrats in Albany want to be seen supporting is a policy that raises rents.
When asked about the proposal last week, Linda Rosenthal, who chairs the Assembly’s housing committee, said a rent-reset bill would be “a non-starter.”
The Manhattan Assembly member sees CHIP’s proposal as an erosion of the tenant protections Albany enacted in 2019 and a step toward vacancy decontrol, which lawmakers banned in that overhaul. Previously, the regulated rent could be hiked 20 percent at vacancy and if it exceeded a certain dollar amount, owners could permanently deregulate the unit.
“We’re not about to take units out of rent stabilization,” Rosenthal said.
CHIP’s proposal does not do that. After the one-time increase, rent hikes would remain limited by the 2019 law.
Regardless, Rosenthal doesn’t believe landlords need the rent hikes they’re asking for.
The lawmaker, who in 2020 introduced a bill that would fine owners for keeping units vacant, said they are exaggerating the cost of the work that needs to be done.
“Perhaps the landlords intend to use gold paint,” she quipped to The Real Deal last summer.
To undermine that argument, CHIP on Wednesday released case studies of vacant apartments whose owners cannot afford needed repairs.
A vacant one-bedroom on Central Park West, for example, has a legal rent of $972. Photos show a hoarder-like degree of clutter.
“This is a common condition that property managers find when low-rent apartments are left after long-term tenants have lived there,” CHIP’s report reads. “It needs a large clean-up as well as extensive renovations.”
Critics blame landlords for not fixing units when the old law allowed them to recover improvement costs from tenants, but significant renovations are often impossible until a tenant leaves. Between the rent law’s renewal and succession rights, that can be half a century or longer.
The report estimates repairs to the Central Park West unit would run $110,000. Under the 2019 law, the rent can be raised just $83, resulting in a loss of $89,120 over 30 years.
Without Rosenthal’s support as housing chair, CHIP’s Jay Martin admitted it would be difficult to get the group’s proposal approved.
“But nothing is impossible,” he said on a call while heading back from Albany.
Martin spent the past three days chatting with elected officials about the measure and found a “universal consensus” that landlords’ inability to invest in their units was a growing problem. The bill’s proposed language has yet to be made public.
The executive director added that he was open to other ideas, including ones that don’t involve rent increases.
“It’s hard to spend $100,000 on repairs without raising rents,” he said. “But we look forward to those discussions.”
Rosenthal indicated that her opposition would not doom Martin’s proposal if the bill had enough support in the chamber.
“Generally none of us are dictators,” she said. “No matter our title, we work in consensus.”
However, the lawmaker immediately emphasized her colleagues’ concern about affordability. “That has to be at the very top of every conversation,” she said.
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