State legislators have approved a slew of new rules that will give some New York City tenants more rights to stay in their apartments, and limit how much landlords can raise the rent in eligible apartments.
The “good cause” policy is a historic change for the city’s housing market, one that follows in the footsteps of other, similar rent rules recently adopted in California, Oregon and Washington and being seriously considered in Connecticut now.
But in New York’s version, there are a lot of exceptions — and the devil (and your lease’s future) is in the details.
THE CITY spoke to real estate attorneys, tenant advocates and housing experts to tease out what renters should know about New York’s new policies:
What are the ‘good cause’ rules Albany just passed?
Through the state budget-making process, lawmakers at the capital approved new rules over the weekend that would cap rent increases for some New York apartments and force landlords to offer tenants new leases — unless they have a solid reason not to.
In other words, landlords have to have a good cause for not renewing a tenant’s lease. Some of those causes include non-payment of rent, illegal behavior, if an owner is trying to change the use of an apartment from residential to another purpose (like commercial space), or when an owner wants to demolish a building.
The policy takes effect immediately for the five boroughs. It is also set to expire in just 10 years, in 2034.
These policies cover New York City automatically, but will not take effect in towns and cities elsewhere in the state unless those municipalities opt into them. So, places like Beacon, Newburgh, Albany and Kingston — which all have previously voted for their own local good cause rules — will have to proactively adopt the latest policies from the statehouse.
How is this going to limit rent increases?
Get your calculator out. If your apartment is eligible, rent increase regulations will work like this: Your landlord can raise the rent up to 5% plus the consumer price index (CPI) … or a flat 10% depending on which number is lower.
Let’s break that down further: The CPI is a measure of the weighted, average prices for goods and services in the U.S., set by the federal Bureau of Labor statistics.
So, if the CPI is 3.5%, your landlord could raise your rent by 3.5%, plus 5%, which equals 8.5%.
That would be the percentage increase for your next lease because it equals less than 10%, the other rent increase option laid out in the new law.
However, if there’s a future year where the CPI rises to 5% or higher, that’s when the 10% would become the option landlords must take.
Big exceptions: buildings that won’t have to follow ‘good cause.’
The new law applies only to certain apartment buildings, with lots of carve-outs. All of these are exempt:
- Any newly constructed building since 2009. Newly built rentals are exempt for 30 years.
- Any luxury apartments for rent above $5,846 for a studio, $6,005 for a one-bedroom, $6,742 for a two-bedroom and $8,413 for a three-bedroom.
- Any apartments in buildings with 10 or fewer units where the landlord lives there.
- All rentals in condos and coop buildings.
- All rentals that are income-restricted affordable housing, for example, all units marketed and rented through the NYC Housing Connect lottery.
- All rent-stabilized and rent-controlled units, which have their own rules limiting rent increases and guaranteeing lease renewals.
- Any apartments in building portfolios that have 10 units or fewer. That means that if your landlord owns three buildings with three units in each building, the portfolio has nine units total, making all nine apartments exempt from the new law. But if they buy one more building with three units, that will put their total at 12 and make all their apartments eligible for good cause.
How many apartments will be covered under the new rules?
No one knows for sure, and it’s really hard to estimate. According to an analysis by City Limits, hundreds of thousands of units will be exempt under the 10-apartment-or-fewer portfolio rule alone.
Oksana Mironova, a housing analyst at the nonprofit Community Service Society, estimates between 321,000 and 473,000 apartments will be eligible under the new good cause rules. That’s compared to 2,324,000 renter-occupied homes in New York CIty overall, 1,020,000 of which are already rent-stabilized or rent-controlled, according to the Department of Housing Preservation and Development’s every-three-year Housing and Vacancy Survey.
To her, the critical piece of this is how the Albany law defines “landlord,” which will shape how to define a portfolio.
“‘What is a landlord?’ is the key question in this situation. Do they mean a natural person? Do they mean a corporation, an LLC?” Mironova said, referring to limited liability corporations. “Is the LLC the landlord, or is it the actual company that owns 10,000 LLCs across New York City?”
Often, larger real estate companies will create separate LLCs for each of their properties, and since LLCs records are still shielded from public view, finding out the true owner is notoriously challenging.
How do I know if this will affect my building?
It’s going to be hard to know, especially if your landlord owns multiple buildings. But if you live in a non-coop or condo building that was built before 2009 and has more than 10 units chances are high you’ll be eligible.
What happens if my landlord ignores the new rules?
The way the law is created, the responsibility will be on tenants to assert their rights by taking their landlord to court if they don’t follow the new rules.
For example: If you think you’re in a good cause-eligible apartment, but your landlord refuses to give you a new lease, or jacks your rent up 20%, you now have the right to contest that decision in Housing Court.
“All it is is a defense a tenant can use in Housing Court. Only tenants who are brave enough to say ‘No, I will not leave, I will not pay that,’” said longtime tenant advocate Michael McKee of TenantsPAC. “The way it’s structured, the burden is on the tenant to prove the apartment is not exempt. The way they’re drafting it, landlords can just say ‘I’m exempt.’”
That will likely mean more cases in Housing Court, which is already swamped, noted real estate attorney Alexander Lycoyannis, of Holland & Knight, who has written arguments against “good cause” legislation.
“There are going to be more disputes and more requirements for the landlords to follow. And when you have more requirements and more potential flashpoints, you’re going to have more litigation. And we’re going to have that at a point where the Housing Court is already overworked and already slow,” he said.
If you need help finding legal help in Housing Court, read THE CITY’s guide on how to get a free housing attorney and what to do if you can’t get one.