Rent-rospective: Assessing the rent law, one year after its passage

New York /
Jun.June 23, 2020 07:00 AM

Rent-rospective: Assessing the rent law, one year after its passage
Last year’s changes to the rent law brought the New York City multifamily market to a screeching halt.

With nearly all avenues for raising rents in rent-regulated apartments closed, experts predicted capital flight, disinvestment and a deterioration of the city’s housing stock.

A year after the rent law’s passage, The Real Deal’s Kathryn Brenzel and Georgia Kromrei set out to assess the impact the legislation has had so far. Some of the city’s top brokers reflected on the financial fallout, and who the long-term winners and losers might be.

Last July, two real estate trade associations filed a federal lawsuit to strike the law down on the basis that it is unconstitutional. Before the pandemic, the lead lawyer for the case sat down with TRD to explain the legal strategy and why it should be argued before the Supreme Court.

As legislators hacked the previous rent law to pieces, some additional questions were raised — such as how the changes will affect the old 421a program. Some lawmakers have even suggested they would be open to tying off some of those loose ends.

Fresh off their legislative coup, tenant advocates have had a hard time ticking more items off their agenda. In recent months, tenants have launched rent strikes, renewed their push for “good cause” eviction and urged lawmakers to cancel rent during the pandemic, with little success. But don’t count them out — especially as primaries heat up, where real estate continues to be in the sights of progressive challengers.

Finally, Joseph Strasburg, a longtime advocate for the real estate industry, known for a brash and sometimes controversial style, sits down with TRD to discuss the changes over the years.

(Click to enlarge)

Rent law cheat sheet:

  • Major Capital Improvements and Individual Apartment Improvements weren’t eliminated, as tenant advocates initially sought. But the programs were significantly limited: MCIs and IAIs were capped at 2 percent and $15,000, respectively. They both expire after 30 years.
  • Tenants have 30 days to cure lease violations, up from the previous 10.
  • Luxury decontrol, the vacancy bonus and vacancy decontrol were eliminated.
  • If a tenant breaks a lease, a landlord is now required to try to find a new tenant instead of charging the tenant the unpaid portion of the lease.
  • Landlords cannot charge legal rent after charging a preferential rate until an apartment is vacated.
  • The “tenant blacklist” is no longer a thing.
  • Application fees, including background checks, are now capped at $20.
  • The rent law no longer has an expiration date.

Related Articles

arrow_forward_ios
That was fast: RSA and CHIP appeal rent law decision

That was fast: RSA and CHIP appeal rent law decision

That was fast: RSA and CHIP appeal rent law decision
State Sen. Julia Salazar, Barbara Corcoran and Gov. Andrew Cuomo (Getty)

State says Barbara Corcoran is on board with broker-fee ban

State says Barbara Corcoran is on board with broker-fee ban
Tenants say brokers and landlords are exploiting uncertainty created by changes to the rent law, and the broker-fee upheaval (Credit: iStock)

Brokers, landlords exploiting rent-law uncertainty: tenants

Brokers, landlords exploiting rent-law uncertainty: tenants
Compass agent Victoria Shtainer and Sotheby’s agent Frank Bodenchak (Credit: iStock, Compass, Bodenchak Team)

NY rent law throws shade on Hamptons summer leases

NY rent law throws shade on Hamptons summer leases
REBNY President Jim Whelan (Credit: iStock; Whelan by Anuja Shakya)

Rental commissions are back — for now

Rental commissions are back — for now
REBNY President James Whelan (Credit: iStock; Whelan photo by Anuja Shakya)

Stop the “havoc and confusion:” Industry petitions to overturn ban on broker fees

Stop the “havoc and confusion:” Industry petitions to overturn ban on broker fees
Here’s how landlords and property managers are dealing with the changes to broker fees (Credit: iStock)

“I feel really bad for those agents”: How landlords and property managers are responding to broker fee rule

“I feel really bad for those agents”: How landlords and property managers are responding to broker fee rule
From left: Douglas Elliman's Howard Lorber, Brown Harris Stevens' Bess Freedman, REBNY's James Whelan, Bohemia Realty's Sara Saltzberg and Corcoran's Pam Liebman

Real estate industry to sue NYS over rental commission ban

Real estate industry to sue NYS over rental commission ban
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...