ALBANY-With the state’s rent regulation laws expiring today, the New York Times reported that Albany lawmakers are mulling a decision to simply extend the laws or strengthen them. As the clock ticks, a partisan divide is emerging: Gov. Andrew M. Cuomo and Democrats in the state legislature are pushing to limit the amount a landlord could charge for over one million apartments within New York City and its surrounding suburbs, while Republicans oppose the measure, the article notes.
In April, the Democratic-controlled New York State Assembly voted 95-54 on a proposal to extend current rent regulation laws until June 2016. The Assembly also voted to repeal the state’s vacancy decontrol law, which permits landlords to remove apartments from rent regulation in New York City when the apartment becomes vacant. Under current law, when tenants in a rent-regulated apartment move out and the apartment rent is over $2,000 a month, the vacated unit is no longer subject to rent regulations, according to Assembly documents.
The bill also raises luxury decontrol thresholds to $3,000 per month in rent, and $300,00 per year in income. In addition, it allows all former federal Section 8 housing to be subject to rent regulation, even if constructed after January 1974. Assemblymember Richard N. Gottfried (D-75th District), supported the measure, calling vacancy decontrol as a “Pandora’s Box” of unethical housing practices. “It has made it difficult for working families to find affordable housing,” he said in a statement after the vote. “It gives landlords an incentive to drive out existing tenants in rent-regulated apartments so they can charge inflated market rents to the next tenants.”
In response to the bill, New York Building Congress president Richard T. Anderson said in a proposal that the organization has long been opposed to rent regulation because it “inhibits construction” of new rental housing “by artificially setting rates at below-market prices.”
Anderson wrote that the extension of rent regulations could result lower property tax revenues for New York City, leaving “considerable under-investment in existing properties” for landlords and building owners. He noted that real estate developers have little incentive to invest in affordable rental properties, “where revenues are effectively capped by regulation.” As a result, Anderson said, investment dollars are turning toward commercial properties, as well as luxury condominiums and high-end rentals, which are not subject to regulation.
“When combined with other initiatives, such as changes in regulatory procedures, property tax policies and building code requirements, financing for new development could loosen substantially,” Anderson said, in a prepared statement after the Assembly vote. “Hundreds of currently stalled development sites throughout the City could be jump-started.”
But supporters of rent regulation tell GlobeSt.com that housing should not be a market issue, but a social one, says Abby Jo Sigal, VP and New York director of Enterprise Community Partners, a local office of a national nonprofit that advocates to preserve and create affordable housing. “Part of the challenge is that there is not a broader consensus on what works to provide housing for all New Yorkers,” Sigal says. “It is also governed by a state legislature system that isn’t necessarily all connected with what makes most sense for New York City.”
And in response to critics who say affordable properties are not a good investment for a landlord, Sigal says investors are buying rent-regulated stock at an “incredible” rate. “Frankly there are a lot of things that constrain the market in New York City, and it’s not clear to me that if you just left it to the market that every single New Yorker would get housed,” she said. “Because they wouldn’t.”
GlobeSt.com previously reported that Rent Stabilization Association and Real Estate Board of New York are also opposed to strengthening the regulations. The 65-year-old rent stabilization program itself goes back to the housing shortage following World War II, covering buildings constructed after 1947 and before 1974, according to the state’s Division of Housing & Community Renewal.
Be sure to check GlobeSt.com if a decision is reached.
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