URBAN AGENDA: Black Leadership in Albany Protects Renters Statewide
David R. Jones, Esq., President and CEO of the Community Service Society of New York | 6/27/2019, midnight
The New York State legislature made history this month by significantly strengthening rent control and rent stabilization in New York City and the suburbs, allowing local governments from the rest of the state to opt in to rent stabilization for the first time, and creating a long list of new rights for tenants across the state. They even made the rent laws permanent, putting an end to the epic battles between landlords and tenants every four to eight years the rent laws periodically sunset.
This is the signature achievement of the newly empowered leadership of New York State Assembly Speaker Carl Heastie of the Bronx and Senate Majority Leader Andrea Stewart-Cousins of Yonkers. For decades the fate of the rent laws was settled in three-way negotiations between the Governor and the Assembly and Senate leaders, and there was always at least one Republican ally of the landlords at the table.
But after the defeat of most of the Independent Democratic Caucus, a group of state senators that allied with Republicans, landlords no longer had a Republican Senate leadership to help them stave off efforts to strengthen the rent laws. What’s more, this year the new Senate leadership joined Assembly leadership in sidelining Governor Cuomo and shaping the rent bill on their own – a historic break with the “three men in the room” style of legislating. Now for the first time there were two leaders in the room, a man and a woman, both black.
The results of this new regime will bring great benefits to low-income renter households in New York City and across the state. More than 290,000 families with incomes less than twice the federal poverty threshold live in rent-stabilized and rent-controlled housing – that’s more than in public housing, private federally subsidized housing, and Mitchell-Lama housing, plus tenants with federal Section 8 vouchers combined.
The new law does away with the main mechanism for deregulating apartments and thus ensures that the system will survive into the future. It also reverses a destructive change from 2003 that negated the effects of rent regulation for hundreds of thousands by allowing large increases from “preferential rents” to higher legal rents.
Rent regulation is primarily a consumer protection rather than an affordable housing program, but it also helps make housing more affordable and prevented tenants from being displaced by rising rents, especially as neighborhoods gentrify. In recent years, the affordability benefit has been undermined by excessive rent increases during vacancies – based on the “vacancy bonus” provision that allows for large automatic increases on every vacancy, plus additional increases that are based on apartment improvements.
CSS research has found that increases during vacancy account for 62 percent of all rent-stabilized rent increases above inflation and that the typical share of income that low-income tenants spend on rent increased from 40 percent in 2002 to 52 percent in 2017.
The new law will significantly slow this trend by eliminating the vacancy bonus and curtailing individual apartment improvement-based increases to a level that is in line with the normal rate of return for other investments. It also makes similar reforms to rent increases based on building-wide major capital improvements, which can hit individual tenant households hard and lead to displacement. It makes the increases temporary and reduces them to a level in line with the normal rate of return.