The Real Deal New York

Rent limits just a fiction for thousands of NYC tenants: records

Newly released housing documents reveal that 239K regulated apartments have “preferential” rent, meaning landlords may be able to boost rents by more than what the city allows

March 11, 2016 01:55PM
By Cezary Podkul and Marcelo Rochabrun for ProPublica

A rent strike in Harlem, 1919

A rent strike in Harlem, 1919

About 28 percent of New York City apartments subject to rent limits can easily get around them.

It takes New York housing officials six to nine months to resolve overcharge complaints from renters.

And surprisingly few tenants ever file harassment complaints against their landlords — only 207 last year in a city with hundreds of thousands of renters in regulated apartments.

Those facts about renting in the city, previously shared only among a few policymakers who set city rent limits, are now all in the public domain thanks to a freedom of information request by ProPublica.

The information comes from lengthy questionnaires sent each year from the city’s Rent Guidelines Board to the state’s Division of Housing and Community Renewal, or DHCR.

The board decides how much landlords can increase the rent each year for apartments subject to rent limits; the state agency keeps a registry of those apartments and investigates tenant complaints.

The questionnaires provide a rare glimpse under the hood of DHCR, which has been criticized for letting landlords get away with not registering some 200,000 apartments for rent stabilization.

Under a long-standing exemption in the state’s rent laws, information provided by landlords to DHCR does not have to be disclosed under New York’s Freedom of Information Law. That exemption has prompted DHCR to keep a tight lid on all its administrative data, leaving tenants, lawmakers and the public in the dark about even basic facts about rent regulation.

Which is why we find the questionnaires so interesting. To foster better understanding of the state’s rent laws, ProPublica is publishing annual questionnaires for 2012 through 2015.

Two of the questionnaires came from our public records request. We’re adding two others that we found in a lawsuit against the DCHR by the Rent Stabilization Association, which represents landlords.

Here are some of responses that most intrigued us:

An End Run Around Rent Limits

There were 839,797 apartments registered for rent stabilization in 2014, but 28 percent of them, or 238,573, weren’t really subject to the RGB’s limits on rent increases. That’s because the owners employ what’s called a “preferential” rent, which potentially allows them to charge tenants more than the RGB allows. (Read more reporting about preferential rents.) Tenant groups have long complained that preferential rents are prone to abuse, and their prevalence means that even fewer apartments are truly rent stabilized than the city’s 1 million estimate we’ve questioned before.

The ‘Luxury’ Escape

A lot of apartments are exiting the rent-stabilization system as landlords claim they are no longer subject to rent limits. That can happen for various reasons, such as crossing a rent threshold — now set at $2,700 per month — that is considered a luxury apartment not subject to caps on rent increases. (One exception: apartment buildings receiving certain property tax breaks that require even high-end apartments to be rent stabilized.) Since 2003, about 160,000 apartments have been taken out of rent stabilization, according to the DHCR’s count. Much of that is probably due to exceeding the high-rent threshold, which is known as “luxury decontrol.” One silver lining may be that the pace of luxury decontrols seems to have slowed in recent years, and the overall count of rent-stabilized apartments is ticking up somewhat. But new stabilized apartments most likely come from tax programs that usually have higher rents. Apartments benefitting from the biggest of those tax programs — known as 421-a — had a median rent in 2014 of $3,559 per month.

No Rush to Resolve Complaints

The DHCR received about 7,864 tenant complaints during the 2015 fiscal year, up 16.5 percent from the year before. The board guidelines asked, but the DHCR did not answer, whether there is a backlog. But tenants who complain are likely to have a long wait: The DHCR said overcharge complaints take six to nine months to resolve. The agency said it is “constantly trying to improve” that lag, but fears that if it “were to place an emphasis on speed” it would violate due process and make it easier for courts to undo its decisions.

Surprisingly Rare: Harassment Complaints

Landlord harassment of rent-stabilized tenants has been grabbing headlines. Seventeen City Council members have signed on to legislation aimed at deterring tenant harassment, while Mayor Bill de Blasio has created a Tenant Support Unit to help residents fight harassment. But for all the attention, there are relatively few harassment complaints filed with the state. The DHCR said it only received 207 in its 2015 fiscal year. Given de Blasio’s claim that his unit has now helped 1,000 tenants, the complaints to DHCR almost certainly understate the scope of the problem. The state also has a Tenant Protection Unit, created by Gov. Andrew Cuomo in 2012, but relatively little mention is made to it in the questionnaires.

 

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