June 17, 2019; New York Times
At NPQ, we have written regularly about the housing affordability crisis. Nationally, as many as 19 million American households need to pay more than half of their income on housing—for the record, paying more than 30 percent of your income on housing is considered excessive.
In New York City, a study last year found “44 percent of all New York households are rent burdened, meaning they pay more than 30 percent of income toward rent, after accounting for rental housing vouchers and Supplemental Nutrition Assistance Program (SNAP) benefits. A little over half of these households are severely rent burdened, which means they pay more than 50 percent of their income toward rent.” In the Wall Street Journal, Will Parker and Jimmy Vielkind write, “Lower-income tenants living in rent-regulated apartments paid 52 percent of their income in rent in 2017, compared with 40 percent in 2002, according to a study from the Community Service Society, a nonprofit that advocates for the poor.”
A new state housing code may help, however. The new code, passed last week is, according to Luis Ferré-Sadurní and Stefanos Chen of the New York Times, “one of the most sweeping interventions by government in the New York City real estate market in decades, establishing new rules for millions of people on everything from rent increases to security deposits to evictions.” The move is largely a consequence of the 2018 elections, which gave Democrats “control of the New York State Senate for just the third time in 50 years.”
Parker and Vielkind add that the new law “brings increased power to tenants in roughly one million rent-regulated apartments in New York City. It makes it more difficult for the owners of those apartments to increase rents, while enabling more tenants to sue landlords for rent overcharges. Also, tenants around the state will have more protections against eviction.”
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In Curbed, Amy Plitt notes that “the bill…will not only strengthen some of the laws that are already on the books, but also extend them to even more rent-burdened tenants across the state—and codify them permanently, rather than having the laws sunset every few years.” The measure, notes Plitt, passed by a 36–26 vote in the Senate and by a 95-42 vote in the Assembly. Governor Andrew Cuomo signed it into law Friday afternoon.
Writing in the New York Times, Sharon Otterman and Matthew Haag identify the bill’s key provisions. Among these were the following:
- Vacancy decontrol: When prices reached a certain level, currently $2,774 per month, housing units would cease to be covered by rent control, resulting since the 1990s in releasing 155,000 units away from controls. That practice is now ended.
- Vacancy bonus: Landlords had been allowed to hike rents by as much as 20 percent after tenants moved out. Now they can’t.
- Rent increase rents for building improvements have been limited.
- “Owner-use” loophole: Landlords and their family members have been able to remove rent-stabilized tenants from multiple units to use them as residences. Now, landlords can only claim “owner use” for one apartment.
Other changes fall in the area of tenant rights, rather than focusing on controlling prices. Again, Otterman and Haag highlight the key provisions:
- “Security deposits will be limited to one month’s rent and procedures will be improved to make it easier for renters to get their security deposits back.”
- “Tenants who were seen as troublemakers by landlords—perhaps for standing up for their rights—would sometimes end up on blacklists that would be shared among rental agencies. That practice would be banned.”
- “Tenants would be better protected during the eviction process, particularly against retaliatory evictions.”
- “Unlawful evictions, such as when a landlord illegally locks out or uses force to evict a tenant, would become a crime, a misdemeanor punishable by a civil penalty of between $1,000 and $10,000 per violation.”
- “Landlords would be required to provide at least 30 days’ notice to tenants if they intend to increase the rent by more than 5 percent or are not going to renew the lease.”
Of course, New York’s real estate market is unique. Will others follow its example? State Senator Mike Gianaris, a leading advocate, told Parker and Vielkind that he thought “the lack of affordable housing needed to be a part of a national conversation, pointing to San Francisco, Seattle and urban centers along the East Coast as proof of the lack of affordable housing.” Parker and Vielkind also quote Illinois State Rep. Will Guzzardi, who says, “I think the victory in New York will give us a good road map to follow.” Guzzardi is currently seeking to get a law passed in Illinois that lifts a 20-year state prohibition on rent control.
Parker and Vielkind add, “Proposals to limit rents are advancing in a number of state legislatures, including in California, where a statewide cap on rent passed the California Assembly in May, and in Oregon, which passed the nation’s first statewide rent control in February, limiting annual rent increases to seven percent plus local inflation.”—Steve Dubb