How Tenants’ Rights Deter Investment, Prolong Vacancies

Progressives are constantly trying to expand tenants’ rights. Increasingly, it comes at a cost.

In Albany, Assembly member Linda Rosenthal and Sen. Brian Kavanagh have a bill to speed up the statewide expansion of rent stabilization. Meanwhile, City Council housing chair Pierina Ana Sanchez and the Mamdani administration plan to expand (again) the Certificate of No Harassment program and make it permanent.

However, tenants already have more rights in New York than in any other state. For elected officials looking to create more, the low-hanging fruit has been picked.

Retrieving fruit from higher up in the tree comes with costs and risks; that’s why it’s still up there. In the same way, tenants’ rights not yet granted in New York are more likely than existing ones to have drawbacks that exceed their benefits.

Making vacancy valuable

The premise of tenants’ rights — such as good cause eviction, in effect citywide since April 2024 — is to keep renters in their apartments. Under rent stabilization and good cause, tenants are entitled to perpetual lease renewals.

But occupancy prevents landlords from doing things to make a property more valuable, like a substantial rehabilitation, condo conversion or new construction. As a result, old buildings in New York tend to be worth more when vacant.

Legislating stability for tenants has downsides, too: It takes years for landlords to clear out a building to gut-renovate or build new. This either prolongs vacancies — exacerbating the housing shortage — or deters investment in buildings. Good cause extended this dynamic to free-market properties.

“The underwriting now is a lot longer,” said Ilya Tolmasov, who founded Prospect Acquisitions with Danny Arnel. “Before good cause eviction, within two years, you’re in position to build. Now it’s at least five years. At least.”

Deterring investment

Even if the goal is to fix a building and bring back the same tenants, renters’ rights can get in the way.

Longtime landlord-tenant attorney Kara Schechter Rakowski represents the owner of an old walk-up building where problems involving floor joists and the stairwell were discovered. “It’s a safety issue,” she said.

To correct it, the ceilings must be removed, which means temporarily relocating all the tenants.

All of the tenants have been moved except one — the only one in a rent-stabilized unit. The Department of Buildings hasn’t ordered an evacuation, so she doesn’t have to go anywhere.

The tenant has a lawyer and has been discussing a temporary relocation since February. The negotiations have been one-sided; the landlord has agreed to all of her demands. Yet she remains in her apartment. Tenants’ rights at work.

The owner has offered to move her to a nearby building with a doorman and other amenities, improve her rent-stabilized unit while she’s gone, and cover all her moving and legal expenses.

“I do believe we are close to a resolution,” Rakowski said. “At this point it’s nitpicking.”

But this has dragged on for three months. It could go on indefinitely. Absent an agreement, the owner’s only option is to take the tenant to court.

However, a lawsuit could take two years and has no guarantee of success. Moreover, suing a tenant — however unreasonable the tenant is being — can lead to unexpected problems.

Maybe you end up in Cea Weaver’s doghouse and targeted by her Office of Tenant Protection or the state’s Tenant Protection Unit. Maybe the city requires you to get a Certificate of No Harassment just to make the repairs to reinforce the building.

The CONH investigation alone means a seven-month delay, with no certainty of passing. If you don’t get the certificate, you can’t fix the joists. Now you have the worst possible scenario: a structurally deficient building that’s empty except for a single tenant who pays below-market rent and never has to move.

It’s improbable, but stranger things have happened. The city has a long history of holdouts.

To be clear, personal rights are essential. They are what separate good countries from bad ones — and make my job possible. However, no rights are absolute. Expanding one person’s rights can infringe on another’s. That’s why you can’t yell “Fire!” in a crowded theater. A line has to be drawn somewhere.

The Council must decide whether it wants to make repairs and renovations harder for thousands of buildings to deter a much smaller number of construction harassment cases.

“A lot of the [housing] infrastructure is deteriorating. We need owners to build new buildings or improve their existing ones,” Rakowski said. “Unfortunately the statutes, the regulations and the political environment are not just anti-owner, they’re anti-development.”