Landlords have cut back on apartment renovations in New York City over the past five months, after changes to the rent law.
A Wall Street Journal analysis of Department of Building records showed that 535 fewer renovation plans were commenced in rent-regulated buildings between July and November than the same time period in 2018 — a spending decrease of $71 million.
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The 44 percent decline on the previous year suggests owners of rent-regulated buildings were becoming reluctant to renovate apartments after changes to the rent law restricted their ability to increase rents to pay for renovations and other improvements.
As The Real Deal has previously reported, it’s the caps on the Major Capital Improvement and Individual Apartment Improvement programs that industry experts say will disinventivize investment.
“The new law removed incentive to do upgrades beyond the minimum,” said landlord Frank Ricci, who heads government affairs at the Rent Stabilization Association.
However, Tom Waters of the Community Service Society, a nonprofit group that advocates for the poor, told the Journal the decline was to be expected as the previous system had paved the way for landlords to conduct unnecessary improvements as a means to hike up the rent.
Architect Ken Hudes said the shift would lead rent-regulated apartments to fall into disrepair.
“There are still tens of thousands of apartments that are in bad shape and will continue to decay,” he said. [WSJ] — Sylvia Varnham O’Regan