Governor Cuomo Signs Sweeping Rent Control and Rent Stabilization Reforms into Law

Image Credit: New York Senate.

The law places limits on various mechanisms through which landlords of rent-regulated units can raise rent and provides many other protections for tenants. On June 14, 2019, Governor Andrew M. Cuomo signed into law the Housing Stability and Tenant Protection Act of 2019, which Cuomo called “the most sweeping, aggressive protections in state history.” The legislation extends and strengthens rent protections for tenants across the state and went into effect before the expiration of the existing rent regulations on June 15, 2019.  The new legislation makes the rules permanent, repeals high-rent vacancy deregulation and vacancy and longevity bonuses, reforms rent increases for major capital improvements and individual apartment improvements, creates protections for tenants across the state, and allows communities outside of the City to opt into rent stabilization. Assembly Speaker Carl E. Heastie and Senate Majority Leader Andrea Stewart-Cousins sponsored the bills with many co-sponsors in both the State Senate and State Assembly.

Some of the changes under the new law are outlined below.

Extends and makes permanent the rent regulation laws. Current rent regulation laws are set to expire every four to eight years. Under the new Act, the rent regulations laws are permanent and can only be terminated or repealed by an act of the legislature.

Provides relief from large rent increases for rent-controlled tenants. The new law limits rent-controlled rent increases to the lesser of 7.5 percent or a level equal to the average of the previous five Rental Guideline Board increases for one-year stabilized renewal leases.

Establishes stronger housing security and tenant protections statewide. The new law includes a variety of protections for tenants during the eviction process, including strengthening protections against retaliatory evictions. Among other things, the law also requires that landlords provide tenants with notice if they intend to increase the rent by more than 5 percent or do not intend to renew the tenant’s lease.

Extends the existing rent over-charge look-back period from four to six years. Currently, tenants who claim rent-overcharge and bring a claim are limited to a four-year look-back period to determine the amount of overpaid rent. Under the new law, the look-back period has been extended to six years. Additionally, owners can no longer avoid treble damages by voluntarily returning the amount of rent overcharged prior to a court or Housing and Community Renewal issuing a decision.

Repeals high vacancy deregulation and high-income deregulation. The previous laws allowed deregulation of units upon vacancy if rent reaches $2,744 in New York City or a different threshold in counties outside the City. Landlords could also deregulate units if rent reached that threshold and the tenants earned more than $200,000 per year for more than two years. These laws have led to the deregulation of over 300,000 units since 1994. The new law repeals these provisions.

Repeals vacancy and longevity bonuses. The statutory vacancy bonus allowed landlords of rent-regulated units to collect an automatic 20 percent increase in rent upon vacancy. The vacancy longevity bonus allowed landlords who had not claimed a vacancy increase for eight or more years to collect an automatic .6 percent increase multiplied by the number of years since the last vacancy. Both bonuses were repealed by the new law.  Rent Guideline Boards are prohibited from setting their own vacancy and longevity bonuses and adjusting rent increases for reasons other than those allowed by statute.

Reforms preferential rent. Currently, landlords of units that receive preferential rent, or rent below the legal regulated rent, can raise the rent to the full legal amount upon renewal of the lease. Under the new law, landlords can charge rent up to the full legal regulated rent once the tenant vacates the unit, as long as the tenant did not vacate as a result of the owner’s failure to maintain the unit.

Reforms “owner use” exception. Under the existing laws, a landlord can refuse to renew a rent-stabilized tenant’s lease in the City because the landlord wants the apartment for personal use and occupancy as a primary residence for the owner or a member of their immediate family. Under the new law, the “owner use” provision is limited to a single unit, the law requires that the owner or a member of their immediate family use the unit as their primary residence, and protects long-term tenants from eviction under this exception if they have lived at that residence for at least 15 years.

Reforms rent increases for Major Capital Improvements (MCI). Under existing laws, when owners made improvements or installations to a building subject to rent stabilization or rent control laws, they could apply to the Division of Housing and Community Renewal to raise tenants’ rent by up to six percent. Under the new law, landlords can raise the rent only by up to 2 percent. In other counties, rent increases for major capital improvements have been lowered from 15 percent to 2 percent. The new law also imposes stricter guidelines on what qualifies as a major capital improvement and strict enforcement by requiring the Department of Homes and Community Renewal to inspect 25 percent of MCIs. Under the new law, rent increases for major capital improvements will no longer remain a permanent part of the legal rent and will expire after 30 years.

Reforms rent increases for Individual Apartment Improvement (IAI). Individual Apartment Improvements under the new law are limited to $15,000 over a 15-year period. Landlords can make up to three individual apartment improvements over the 15 years. Individual Apartment Improvement increases, just as MCIs, will expire after 30 years.

Reforms Condo and Co-Op Conversion. The new law strengthens and makes permanent the system that protects tenants in buildings that owners seek to convert to co-ops or condos by eliminating existing “eviction plans” which allow landlords to evict non-purchasing tenants and require a 51 percent approval from current tenants before the conversion can be effective.

In a joint statement, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie stated, “These reforms give New Yorkers the strongest tenant protections in history. For too long, power has been tilted in favor of landlords and these measures finally restore equity and extends protections to tenants across the state…”

To read the full list of changes under the new law and statements by legislators and advocacy groups who supported the new law, click here and here.

To read the text of the bill, click here.

By: Viktoriya Gray (Viktoriya is the CityLaw Fellow and New York Law School Graduate, Class of 2018).