The Real Deal New York

Here’s one way to change rent regulation: Hold $16M hostage

State budget proposes extra leverage to ensure rent regulation reform
By Kathryn Brenzel | January 23, 2019 05:30PM

Andrew Cuomo (Credit: Getty Images and iStock)

The Cuomo administration is seeking to ensure rent regulation is reformed, in part, by trying to keep $16 million from the body that enforces rent rules.

The state’s proposed budget includes a clause that would hold $8 million this year, and another $8 million the following year, from the Office of Rent Administration and another fund controlled by the state’s housing regulator if the “Rent Regulation Act of 2019” doesn’t pass. The “Rent Regulation Act” would renew the soon-to-expire rent rules, and “include rent regulation reforms to end vacancy decontrol, amend the application of preferential rent and limit capital improvement charges.” The details of such legislation haven’t yet been worked out.

The Office of Rent Administration, which is part of the state’s Division of Housing and Community Renewal, enforces rent regulation and investigates allegations of violations through its Tenant Protection Unit. Of course, if the rent laws aren’t extended, these arms of DHCR presumably wouldn’t have the same enforcement responsibilities.

Still, the administration sees preventing the agency from spending the funds as extra leverage to ensure reform is discussed.

“Given the urgent need to protect and strengthen rent regulations, the budget ties these critical measures together to ensure that a holistic conversation about housing affordability occurs during this year’s budget process,” Morris Peters, a spokesperson for the state’s Division of the Budget, said in a statement.

Representatives for DHCR deferred all questions to the budget division.

With a Democratic majority in the state Senate and Assembly, some measure of rent regulation reform seems likely. Sen. Mike Gianaris and Assemblyman Brian Barnwell have already proposed legislation that would eliminate Major Capital Improvements and have indicated that it will also target Individual Apartment Improvements, both programs that allow landlords to increase rents on rent-stabilized apartments. Earlier this week, The Real Deal reported that landlords are rushing to file MCI applications before it’s too late.