Nearly six years ago, the state legislature upended New York’s rent stabilization law.
As part of those reforms, lawmakers dramatically reduced how much landlords can hike rents through building-wide improvements. Under the 2019 rent law, landlords can only increase rents by 2 percent per year, down from the 6 or 15 percent hikes previously allowed. Those increases also expire after 30 years.
A report released last month by the state’s housing regulator indicates that owners filed 335 applications to qualify for MCIs in the fiscal year that began April 1, 2023, and ended March 31, 2024. That’s roughly 75 percent fewer than were submitted in the fiscal year before the passage of the Housing Stability and Tenant Protection Act and roughly 70 percent fewer than the number submitted the year before that.
The report indicates that in the 2023-2024 fiscal year, the Department of Homes and Community Renewal approved 94 applications as they were submitted and 202 more after they were modified.
The landlord group, New York Apartment Association, highlighted some of these stats in a recent newsletter and noted that it was a further sign that owners are unable to invest in their buildings after the 2019 rent law.
Of course, there is variation between the applications, buildings require massive overhaul work at different intervals and the report does not capture why landlords opted to apply for these increases while others did not. HCR also audits every approved MCI application.
Last year, the state budget included amendments to the individual apartment improvement program, allowing slightly larger rent increases on renovated apartments than was permitted under the 2019 rent law.
What we’re thinking about: Wednesday is the start of the state legislative session. What real estate-related issues are you watching? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: JRT Realty filed its complaint against Cushman & Wakefield on Monday. Among other things, the lawsuit accuses Cushman of closing JRT out of deals with DCAS and alleges Jesse Hamilton ensured Diana Boutross led the brokerage’s account with the city agency. TRD first reported on JRT’s action last month.
Elsewhere in New York…
— Prosecutors say they have found “additional criminal conduct” by Mayor Eric Adams, Gothamist reports. In a Monday court filing, the U.S. attorney’s office for the Southern District of New York said some of the mayor’s requests for more information about evidence against him in the criminal could jeopardize an “ongoing investigation.”
— A state appeals court on Tuesday rejected President-elect Donald Trump’s request to halt his sentencing in his hush money case, the New York Times reports. His attorneys are expected to file an appeal in federal court ahead of the hearing, which is slated for Friday.
— Gov. Kathy Hochul on Tuesday proposed creating a $110 million fund to build new childcare facilities in the state, Pix11 reports. The pitch will be part of her State of the State address next week.
Closing Time
Residential: The priciest residential sale Tuesday was $19.8 million for a 4,000-square-foot townhouse in the West Village at 22 Bank Street. Hollywood producer Scott Rudin was the reported seller, and the Corcoran Group’s Deborah Grubman, David M Adler and Paul Albano had the listing.
Commercial: The most expensive commercial closing of the day was $120 million for a 10-acre site at 400 Kingsland Avenue in Greenpoint. Logistics company Prologis purchased the nearly 90,000-square-foot lot from ExxonMobil.
New to the Market: The highest price for a residential property hitting the market was $22 million for a penthouse at The Porter House’s 66 Ninth Avenue. The Chelsea condo is nearly 5,500 square feet of new construction. Sotheby’s International Realty’s Dana Kirshenbaum and Nikki Field have the listing.
— Joseph Jungermann