MEMORANDUM IN SUPPORT: THREE IMPORTANT PRO-TENANT BILLS

 


There are dozens of bills necessary to strengthen rent and eviction protections and to reverse the phaseout of affordable rental housing in New York City and suburban counties. Numerous deregulation amendments have been inserted into the rent laws in the last 25 years, with predictable results: the supply of affordable housing has shrunk dramatically, both regulated and market rents have soared, homelessness is at record levels, and the remaining rent-protected tenants have targets on their backs.

The Real Rent Reform Campaign, a coalition of more than 40 grassroots housing and tenant organizations, has identified the following three bills as priorities for the current legislative session. Enactment of these three bills is essential, before legislators leave Albany in June.

S3482/A433
This bill repeals Vacancy Deregulation, which allows landlords to take apartments out of rent regulation whenever they turn over and also restores rent stabilization protections to 98 percent of the units that have been lost to Vacancy Deregulation. This is the single most meaningful step the Legislature can take to reverse the loss of our dwindling affordable rental housing stock.

Vacancy Deregulation, first inserted into state law in 1993, is an ill-conceived measure which has caused the loss of between 300,000 and 450,000 affordable apartments in New York City and the suburban counties of Nassau, Rockland and Westchester. If it is not repealed, the entire rent and eviction protection system will be phased out over time.

Vacancy destabilization has created a perverse incentive for landlords to do everything they can to drive tenants out of their homes. The uptick in harassment, both overt and subtle; the speculative purchase and flipping of rent-stabilized and Mitchell-Lama properties at prices that vastly exceed reasonable commercial standards; increased evictions and aggressive attempts at eviction by means such as owner use, non-primary residence, and similar tactics – the motivation for all of this destructive behavior is the chance landlords see to remove units from rent and eviction protections, and thereby increase profits for already profitable properties.

Raising the threshold for deregulation, from $2,000 to $2,500 monthly rent in 2011, and to $2,700 in 2015, were ineffective half-measures, which some tried to claim as great tenant victories. For the big landlords, their rents are already above the threshold, or if not, they will spend the necessary funds on Individual Apartment Improvements to bring the rent up to the threshold. Dishonest landlords, however, don’t spend funds on improvements; they simply stop registering the apartment annually with the state housing agency and hope the tenant does not file a complaint. If four years pass without complaint, the landlord gets away with this illegal deregulation.

There is no substitute for outright repeal of Vacancy Deregulation. Attempts to beef up enforcement against bad landlords by state and local governments have been useful, but not as useful as repeal of the incentive for all this destructive behavior. Not to mention the public benefit of restoring and preserving our scarce affordable rental housing stock.

S3482 Sponsors: Stewart-Cousins, Addabbo, Alcantara, Avella, Benjamin, Dilan, Gianaris, Hamilton, Hoylman, Krueger, Montgomery, Parker, Peralta, Persaud, Rivera, Sanders, Stavisky
A433 Sponsors: Rosenthal L, Lentol, Dinowitz, Gottfried, Colton, Titus, Ortiz, Benedetto, Hooper, Glick, Mosley, Zebrowski, Weprin, Davila, Pichardo, Bichotte, Mayer, Abinanti, Simon, Joyner, Quart, Rozic, Blake, Seawright, Walker, Richardson, De La Rosa, Barron; M-S Cook, Cymbrowitz, Jaffee, Peoples, Stokes, Perry, Pretlow, Rivera, Sepulveda

S6527/A6285
This bill closes the preferential rent loophole. A preferential rent is a discounted rent when the registered rent (which, in many cases, incorporates illegal rent hikes) exceeds the actual market value of the apartment. Landlords can revert to the higher rent when tenants renew their leases, leading to sudden, massive rent hikes, often hundreds of dollars, which accelerate gentrification by forcing tenants to give up their homes and move. Some 266,000 families in New York City have preferential rents, and thousands more in the three suburban counties, meaning they are one lease renewal away from eviction. This bill mandates that landlords renew rent-stabilized leases at the preferential rent level until the tenant voluntarily vacates, which was the law until 2003.

S6527 Sponsors: Krueger, Addabbo, Alcantara, Avella, Bailey, Benjamin, Comrie, Dilan, Gianaris, Hamilton, Hoylman, Kavanagh, Montgomery, Peralta, Persaud, Rivera, Sanders, Savino, Serrano, Stavisky 
A6285 Sponsors: Cymbrowitz, De La Rosa, Walker, Rosenthal L, Barron, Dinowitz, Ortiz, Carroll, Sepulveda


S1593/A9815
This bill repeals the “statutory vacancy bonus,” a 20 percent rent increase enacted in 1997 that landlords get every time an apartment turns over. This is, in effect, an eviction bonus, as it gives bad landlords an irresistible incentive to harass and evict long-term tenants.

There is a connection between the preferential rent loophole and the statutory vacancy bonus. With these two enactments, the legislature created an outright scam that is victimizing tenants and destroying housing affordability, especially in low-income communities of color.

Here’s how it works: the landlord rents a rent-stabilized apartment to a new tenant at a preferential rent (let’s say at $1,100 per month), when the registered rent is $1,800. A year later, the landlord sends a lease renewal notice to the tenant, offering to renew for $1,800 plus the rent adjustments authorized by the city or county Rent Guidelines Boards. Unable to afford a $700+ per month rent increase, the tenant vacates, whereupon the landlord re-rents to another unsuspecting tenant, again with a preferential rent. Before doing so, however, the landlord is allowed to add a statutory vacancy bonus of 18-20 percent (in this example, $360) to the registered rent, moving it closer to the deregulation threshold. Another year goes by and the scam is repeated once more.

According to the NYS Division of Housing and Community Renewal, at least 55 percent of apartments with preferential rents have registered rents that are likely illegal. Our weak rent laws promote churning of apartments, displacement, illegal rent overcharging – and illegal deregulation.

S1593 Sponsors: Serrano, Addabbo, Alcantara, Avella, Benjamin, Dilan, Gianaris, Hamilton, Hoylman, Krueger, Parker, Peralta, Persaud, Sanders, Savino 
A9815 Sponsors: Pichardo, Cymbrowitz, Rosenthal L, Carroll, Sepulveda, De La Rosa, Dinowitz, Bichotte, Taylor, Barnwell, Ortiz, Mosley

The Real Rent Reform Campaign urges enactment of these three bills – this year. Elected officials who genuinely care about protecting tenants and preserving affordable housing must act now, rather than waiting until next year, when the sunset of the rent and co-op laws has been deliberately set for eight months after the November 6 statewide election.

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