The Community Service Society of New York

06/11/2019 | Press release | Distributed by Public on 06/11/2019 20:53

CSS Applauds State Senate and Assembly on Historic Rent Reform Bill

Package of bills will bring great benefits to low-income renter households in NYC and across the state

Rent regulation is crucially important to New York City's economic well-being. 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. Rent regulation stabilizes communities by giving tenants security in their homes, including the ability to seek better maintenance conditions in their apartments and buildings without fear of eviction.

The state legislature's bill represents a historic strengthening of this lifeline for low-income communities. It 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. And it makes other changes that remove roadblocks to effective enforcement of the rent laws.

Although rent regulation is a consumer protection rather than an affordable housing program, it has historically helped make housing more affordable and prevented tenants from being displaced by rising rents, especially as neighborhoods change. In recent years, however, this benefit has been undermined by excessive rent increases during vacancies - based on the 'vacancy bonus' provision that allows for a large automatic increases on every vacancy, plus additional increases that are based on apartment improvements but far larger than what is needed to finance the 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.

This bill will put an end to this wave of unaffordable increases 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.

This will make our housing system more affordable while also responding to criticisms from the real estate industry that landlords need a financial mechanism to make reasonable and necessary improvements. Small landlords will continue to have the means and incentive to improve their buildings.

The bill 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. The legislature's bill makes the increases temporary and reduces them to a level in line with the normal rate of return.

The bill will also reduce another important hardship for tenants - unaffordable security deposits and application fees. CSS's Unheard Third survey has found that 72 percent of low-income households do not have the savings to meet a one-time cost of $1,000, making security requirements that often top $2,000 a significant burden.

The bill package makes many other improvements to the rent regulation system -including long-sought relief for rent-controlled tenants, many of whom have been hit with annual rent increases far higher than those allowed under rent stabilization. And it has important provisions for tenants outside New York City, including the ability for more local governments to opt in to rent stabilization and vitally important new protections for residents of manufactured housing.

The bill does not cover every housing issue, and CSS will continue its efforts to enact Good Cause Eviction protections statewide, create a Home Stability Support rent supplement for tenants facing homelessness, and provide much-needed capital funding to deal with deteriorating conditions in NYCHA and many of the state's other public housing authorities.

But this does not take away from the extraordinary achievement of the State Senate and Assembly and the chambers' leaders in winning agreement to this historic rent regulation reform bill.