Proposed gas ban ignites worries of rent hikes

As landlords plead for ways to raise rents on stabilized properties, tenant and environment advocates are trying to block one of the few remaining ways they can.

Gov. Kathy Hochul’s executive budget proposes barring gas and oil hookups in new construction, beginning in 2025 for smaller buildings. A similar law was passed in New York City in 2021 and takes effect in 2024.

The state measure would also ban the installation of “fossil fuel heating equipment and building systems” in existing residential buildings shorter than three stories beginning in 2030, and then in all taller buildings beginning in 2035.

New York Communities for Change, Housing Justice for All, Food & Water Watch and others are concerned that the cost of new boilers will be passed along to rent-regulated tenants.

“Governor Hochul’s budget proposal would unfairly saddle tenants with the costs of cutting pollution they are not responsible for,” the groups said in a statement.

Replacing a boiler in a rent-stabilized building qualifies for the state’s Major Capital Improvement program, which allows landlords to raise regulated rents to recover some of the cost. Those increases used to be permanent. However, the 2019 Housing Stability and Tenant Protection Act significantly reduced such increases, capping MCI rent hikes at 2 percent, down from 6 percent, and made them temporary.

Landlord groups are not keen on having those increases further restricted.

“Given the age and location of buildings and homes across New York state, it makes no sense to put limitations on efficient ways to heat buildings, and at the same time comply with the various laws that require minimum temperatures in buildings,” Frank Ricci, executive vice president of the Rent Stabilization Association, said in a statement. “Barring MCI’s for rent regulated buildings would make it impossible for owners to comply with the law and keep buildings viable for tenants.”

When the city enacted its landmark building emissions cap, Local Law 97, it exempted rent-regulated buildings largely to prevent MCIs from being passed along to tenants. A specific carveout was later created to ensure that buildings in which more than 35 percent of units are stabilized would not be subject to emission limits.

Tenant advocates are calling for the state budget to fund upgrades to rent-regulated buildings while barring landlords from passing any costs from building-wide upgrades on to tenants.

Absent that, the groups argue, rent-regulated properties should be exempt from the governor’s proposed rules about new boilers — meaning landlords could continue to install fossil-fuel boilers and raise rents to help pay for them.

Meanwhile, landlords are pushing a bill that would allow one-time rent increases on vacated, regulated apartments. They argue that tens of thousands of low-rent apartments sit empty, as owners find themselves unable to recover the cost of repairs.