As rent regulation deadline nears, RSA suggests reforms to individual apartment improvements program

Landlords, contractors would have to certify that work was completed

TRD NEW YORK /
May.May 22, 2019 01:45 PM
Joseph Strasburg of the Rent Stabilization Association (Credit: iStock)

Joseph Strasburg of the Rent Stabilization Association (Credit: iStock)

With less than a month until New York’s rent regulation laws expire, a real estate trade group plans to float reforms to a controversial program as an alternative to its elimination.

The Rent Stabilization Association plans to propose changing the reporting requirements surrounding Individual Apartment Improvements, a program that allows landlords to increase rent on a regulated apartment they’ve renovated.

RSA president Joseph Strasburg hasn’t yet discussed his suggested reforms with legislators but told The Real Deal that the RSA has internally discussed putting some on the table. One of his suggestions is to mandate that a licensed professional certifies the cost of a stated IAI and that it was properly completed. A landlord would also have to sign the certification, which would be filed with either the state’s housing regulator, the Department of Homes and Community Renewal, or another auditing agency, Strasburg said.

“Most people are not going to certify work done and lose their license,” he said.

Under such a proposal, those “stupid enough” to falsify such certifications would face criminal penalties, he said. He also suggested capping how much landlords could spend on the renovations based on the length of the previous tenancy.

Bills in the state Senate and Assembly seek to eliminate the program entirely, alongside other proposed legislation that would do away with Major Capital Improvements (MCIs), vacancy bonuses and vacancy decontrol. Another measure would ramp up eviction protections statewide, known as “good cause eviction.”

“Many people believe that [IAIs] should be repealed entirely as part of a much stronger set of laws protecting tenants, and I’ve sponsored a bill that would do just that,” Senator Brian Kavanagh, who chairs the Senate’s Housing Committee, said in a statement. “That said, if the RSA or any other interested party wants to make suggestions about ways we should change the laws, they’re welcome to do so.”

In a previous interview with TRD, Kavanagh indicated that landlord groups were mostly focusing on the survival of these programs rather than suggesting ways to improve them.

Both city and state housing agencies — respectively, the Department of Housing Preservation and Development and HCR — have shown support for reforming (rather than eliminating) MCIs and IAIs, stressing the importance of balancing tenant protections with ensuring that landlords continue to invest in their properties. While landlords must receive approval from HCR for MCIs, landlords aren’t required to apply for IAIs or provide any documentation that the work done to increase rents was actually completed. Over the years, this has led to allegations of abuse of the program.

The state’s rent laws are set to expire June 15. The Senate has two more public hearings scheduled on rent regulation and tenant protections in Albany and Newburgh. At the same time, the city is awaiting final proposals from the Rent Guidelines Board, which will vote on June 25 on whether or not rent stabilized apartments should face rent increases. In a preliminary vote earlier this month, the board favored an increase of .5 to 2.75 percent for one-year leases and a 1.5 to 3.75 percent hike for two-year leases for both rent-stabilized apartments and lofts.

 

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