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Paying Rent

Why Are NYC Democrats Endorsing This Landlord-Backed Bill That Would Be a ‘Total Disaster for Rent-Stabilized Housing’?

One lawmaker dropped their support after Hell Gate asked them about it.

11:34 AM EDT on May 12, 2023

(Hell Gate)

As New Yorkers struggle under a statewide housing crisis and record-high rents, a group of Democratic lawmakers in Albany have quietly backed legislation that would create a process allowing landlords to significantly raise rents on the city's rent-stabilized apartments. 

Since the 2019 rent reform laws, the real estate lobby has thrown their resources into rolling back some of those reforms and stopping further rent protections. But housing advocates and analysts told Hell Gate that this bill represents the industry going on the offensive, and that if passed, would have a cataclysmic effect on the millions of New Yorkers living in rent-stabilized housing.

"This is not about going back to pre-2019 rent regulation. This is about ending rent regulation for half of regulated households," Ellen Davidson, a staff attorney for the Legal Aid Society, said of the proposed legislation.

After the state passed 2019's Housing Stability and Tenant Protection Act, owners of rent-stabilized apartments were no longer able to score 20 percent rent increases on vacant apartments, or take units out of stabilization once a certain amount of repairs were done. Landlord groups like the Community Housing Improvement Program (CHIP) have argued that these changes have made it prohibitively expensive for their members to renovate apartments that have been lived in for decades, and blame the 2019 law for a glut of empty rent-stabilized apartments. 

This narrative does not quite comport with reality: According to a City Limits report using the most recent figures from the state's housing agency, around 40,000 of the city's one million rent-stabilized apartments have been registered by their owners as vacant, which is the same vacancy rate that existed before the 2019 laws took effect. (CHIP and another group, the Rent Stabilization Association, have also filed a lawsuit claiming that New York's entire system of rent control is unconstitutional; the U.S. Supreme Court is now weighing whether to take the case.)

Nevertheless, CHIP and its industry partners insist that landlords need to be unshackled from regulations so they can raise rents. "Rent stabilized owners can't pay for 2023 costs with 1979 rents," CHIP wrote in a TikTok featuring a Chinatown apartment that had recently been vacated. This bill specifically answers CHIP's calls to give landlords more power.

The legislation would allow owners to reset the rent on newly vacant rent-stabilized apartments that have previously been occupied for 10 years or more. While the bill states that the new rent would need to be in line with comparable rent-regulated units in the same neighborhood, if the tenant challenges it, the state would deem any rent that does not exceed the region's "fair market value," or FMR, set by the U.S. Housing and Urban Development to be "fair." Since HUD's numbers take into account rents across the whole region, the FMR tends to be higher than the rent of many stabilized apartments.

For instance, according to a state housing memo obtained by the CITY, the average rent stabilized tenant in the Bronx in 2021 paid $1,290/month. HUD's fair market rent for New York City in 2023: $2,123 for a studio. In neighborhoods where the rents are higher than HUD's—as it is across huge swaths of Manhattan—landlords could charge even more, according to Davidson.

"As I read the bill, if an area's rents are below the FMR, this bill would allow landlords to increase rents to the FMR," Davidson told Hell Gate. "If, however, the rents in a neighborhood are above the FMR, the landlord would be able to increase the rents higher than the FMR."

Sam Stein, a housing policy analyst at the Community Service Society, said that the bill would also "put a target on the backs of any rent-stabilized tenant who has been there a long time." According to the most recent U.S. Census data, 60 percent of all New York renters moved into their apartments in or before 2014.

"Because if the landlord can get them out, they now have a huge incentive to raise the rent. And that's why we made the changes that we made in 2019," Stein said. "This would not only reverse that, but roll it back—like, back to before rent-stabilized times."

Stein added, "It would be a total disaster for rent-stabilized housing."

And despite being called the "Local Regulated Housing Restoration Act" and using the word "restoration" dozens of times in the text, the bill does not specifically require landlords to make any repairs or bring their units up to code, beyond requiring them to pass a lead paint test.

"CHIP has spent the last two years publicly advocating for a legislative solution to address the growing number of empty rent-stabilized apartments," CHIP's executive director, Jay Martin, said in a statement to Hell Gate. "We support this legislation and are pleased that the bill has been introduced."

Asked to respond to critiques of the bill, Martin responded that "it does not raise the rent on a single rent-stabilized tenant." That's true—for current tenants. It's certainly not true for future ones.

Why would Democrats in New York City, where rent-stabilized apartments represent nearly half of the rental housing stock, sign on to this bill? 

Bronx Democrat Kenny Burgos, the bill's main sponsor in the State Assembly, told Hell Gate in a statement that CHIP was among several parties consulted in drafting the bill, that he supported the 2019 reforms, and that he believed that the legislation would put vacant units back on the market.

"My bill would bring thousands of available rent-stabilized apartments back online, restore them, and ultimately keep them preserved under NYS rent-stabilized guidelines," said Burgos, whose district includes some 14,000 rent-stabilized units in Soundview and Longwood in the Bronx, representing nearly 40 percent of the district's housing stock. 

"The HUD FMR component only comes into play if the landlord wants to rent to a voucher holder," Burgos said. "These are also vacant apartments that stay rent-stabilized, so the underlying premise that this bill could destroy rent stabilization is simply false."

The language of the bill makes no reference to vouchers at all. We've asked Burgos's office to clarify, and will update if they respond.

Queens Democrat Leroy Comrie is the bill's main sponsor in the State Senate. Comrie's district has 12,200 rent stabilized units, representing more than a quarter of the rental housing stock there. Comrie's office did not respond to our request for comment.

Hell Gate asked the other seven Assembly co-sponsors, all Democrats from New York City—George Alvarez, Brian Cunningham, Edward Gibbs, Charles Fall, Alicia Hyndman, Michael Benedetto, and Yudelka Tapia—and nine State Senate co-sponsors, all but three Democrats from the city—Nathalia Fernandez, Luis Sepúlveda, Joseph Addabbo, John Mannion, Monica Martinez, Kevin Parker, Roxanne Persaud, Jessica Scarcella-Spanton, and James Skoufis—to comment on it. Just one has responded so far: Bronx Assemblymember George Alvarez. 

"After further review, I decided it would be best to withdraw my name," Alvarez told us in a statement. "I am no longer on Bill A06772. Thank you for your inquiry."

Manhattan Democrat Linda Rosenthal, who chairs the Assembly's housing committee, insisted that the bill is a "non-starter."

"It has no chances this year," Rosenthal told Hell Gate. "And I would say it has no chances in the future because its goal is to undo the rent stabilization system. And we see that and we know that that's not going to happen."

Rosenthal declined to say why some of her Democratic colleagues didn't share her view, but offered that "the way it's being sold is very skewed, very distant from the truth." 

"Jay Martin, he tried to sell me this bill of goods," Rosenthal said, referring to CHIP's leader.

Rosenthal, who is a co-sponsor of Good Cause Eviction legislation in the Assembly, said her priority was trying to get these tenant protections passed before this year's session ended in June. Housing legislation was cut out of the budget process this year, though Rosenthal said this was not altogether a bad sign for tenants rights supporters.

"In the past, what would have happened is everything developers and landlords wanted would be accommodated. And in 2023, that didn't happen," she said.

Is this bill a sign that the real estate industry is concerned that Good Cause Eviction is about to pass?

"I can't read their minds, but I know they put all their efforts into opposing what tenants want most," Rosenthal said. "And so this is probably just part of that."

She added, "Jay Martin has hired up many lobbyists, and I know he's going to be unsuccessful. And if he wants to waste his money, that's his choice."

[Update / 12:42 p.m.] Bronx Assemblymember Yudelka Tapia's name is no longer on the legislation.

[Update / May 13, 12:01 p.m.] Brooklyn Assemblymember Brian Cunningham has also pulled his name from the bill.

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