By: Akanksha A. Panicker
An apartment’s unique history determines its legal rent rather than the individual’s ability to pay. This means that tenants in identical apartments may pay exceedingly disparate rent, more so if there is a differentiation between newer tenants and long-term tenants.
Rent control in New York is a means of limiting the amount of rent charged on dwellings. Rent control and rent stabilization are two programs used in parts of New York State (and other jurisdictions). In addition to controlling rent, the system also prescribes rights and obligations for tenants and landlords.
[1.1] WHAT IS UNREGULATED HOUSING
Some cities have rent controls that place a maximum price on what landlords can charge for rent. The goal of rent control or rent regulation is to prevent excessive rent increases. The main issue that landlords face here is the restrictions cause shortages in apartment availability because rents don’t meet the fair market value and landlords can’t make a profit by offering more units. Apartments not subject to rent controls are referred to as ‘unregulated’.
Generally, an unregulated house means that the rent may only be raised as per the lease. If the lease specifies a raise, or if it ends, the rent of the unit may be raised. For a monthly tenant, a 30-day notice is required to be provided before raising the rent by the landlord.
The landlord usually does not change any terms of a rental agreement, as all issues are usually covered by the mutually signed lease. These rental units are considered to be ‘market rate’ or available on the private market without any regulation as to how much rent can be charged. In some cases, this might not be necessary for a lease to be offered.
While a market-rate housing situation may allow a landlord to refuse to renew a lease or raise the rent, this cannot be done in a discriminatory or a retaliatory fashion. A genuine complaint as to living premises to a housing agency or a question of ethnicity cannot lead to a raising of the rent.
[2.1] WHAT IS REGULATED HOUSING
Both rent-controlled and rent-stabilized housing come within the umbrella of rent-regulated housing. Essentially, rent-regulated housing provides a control mechanism to provide a cap on the amount of rent charged in buildings by providing rent increases set by a government agency. Consequently, the legal protections surrounding rent-regulated housing are higher than what might be available through market-rate housing.
Rent-Regulated Housing includes both “rent-controlled” and “rent-stabilized” apartments. Rent increases and lease renewals are regulated by both New York State and New York City.
[2.1] RENT CONTROL
In theory, rent control should mean that tenants end up paying 1970s rents in neighborhoods that have grossly multiplied in value over the years. This is because of the fact that any apartment that is under rent control means that the apartment has been lived in by the tenant or their family continuously since July 1, 1971, in a building constructed before 1947.
Since this cannot last forever, a rent-controlled apartment becomes rent stabilized when vacant. If the building is less than six units, the rent-controlled apartment becomes removed from regulation altogether. Thus, as the number of units that have become stabilized or deregulated has gone up, the total number of rent-controlled units has decreased significantly.
This does not mean that the rent stays as it is permanently. Every two years, the maximum base rent can increase. This means that tenants pay a monthly rent called the Maximum Collectible Rent plus a fuel pass-a-long, which means that booming gas and oil prices would require the tenants to pay for the adjusted quantity.
A maximum allowable rent is established for each unit. The process starts with landlords applying to the NYS Division of Housing & Community Renewal (DHCR) for increases for each rent-controlled apartment they own. Landlords first apply for a Maximum Base Rent Order of Eligibility. This is done once every two years, six months prior to the increase period. The MBR, or ceiling rent, is raised by the DHCR once every two years, and qualifying landlords get that raise. The landlord is only allowed to increase the rent for the tenants in the building if he receives an Order of Eligibility and sends each rent-controlled tenant a requisite form to fill.
Under the new rent laws, the maximum collectible rent is now limited to the five-year average of the last Rent Guidelines Board increases.
[2.3] RENT STABILIZED HOUSING
Rent stabilization is significantly more common than rent control. Rent stabilization generally applies to apartments in buildings with six or more units constructed before 1974, although a few might have been deregulated from then. Additionally, a few apartments may be rent-stabilized if a developer had applied for a tax abatement.
Exceptions apply when [A.] a building is converted to a co-op or a condo (the tenants who moved-in after the conversion date are not covered) or [B.] when an individual apartment in the building was deregulated due to high-rent vacancy decontrol, or high-income/high-rent decontrol prior to June 14, 2019.
Just like with rent-controlled apartments, the rent of a rent-stabilized apartment may also be increased. This is done through a meeting of the NYC Rent Guidelines Board (RGB), convened in order to determine the renewal increase amounts for all of New York City’s rent-stabilized apartments. The landlord will provide a renewal lease to the tenant, which will thus allow them to collect the ensuing increase.
[3.1] PUBLIC HOUSING
Public housing is managed by the New York City Housing Authority in NYC. It refers to units that are constructed and managed by the government for low and moderate-income households. The Authority manages new construction and rehabilitation of public housing buildings and units, with preference given to homeless individuals and victims of domestic violence.
The Authority additionally manages Senior and Community Centres, providing residents with assistance programs to help them get back on their feet if necessary. NYCHA has Senior and Community Centres and offers residents programs to help find work and provides education on how to manage money and finances.
NYCHA was the first agency in the United States to provide housing for low- and moderate-income residents throughout the five boroughs of New York City. NYCHA also administers a citywide Section 8 Leased Housing Program in rental apartments.
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1.“Fact Sheet #1 – Rent Stabilization and Rent Control” (PDF). New York Division of Housing & Community Renewal.
2.“Fact sheet #22 – Maximum Base Rent Program (MBR)”. New York Division of Housing & Community Renewal. Retrieved September 7, 2020
3.“Rent Stabilization and Emergency Tenant Protection Act”. Homes and Community Renewal. Retrieved September 2020.
4.Tax Abatements & Exemptions FAQ. (n.d.). Retrieved September 07, 2020, from https://rentguidelinesboard.cityofnewyork.us/resources/faqs/tax-abatements-exemptions/
5.About Rent Stabilization. (2019, September 26). Retrieved September 07, 2020, from https://www.metcouncilonhousing.org/help-answers/about-rent-stabilization/
6.Section 8 of the Housing Act of 1937 (42 U.S.C. § 1437f), often called Section 8, as repeatedly amended, authorizes the payment of rental housing assistance to private landlords on behalf of low-income households in the United States.
7.Section 8 Housing (n.d.). Retrieved September 07, 2020, from https://www1.nyc.gov/site/nycha/section-8/about-section-8.page