Relates to deregulation by establishing income and rent thresholds for housing purposes

3 Co-sponsors

• Tony Avella
• Jeffrey D. Klein
• Suzi Oppenheimer

BILL NUMBER:S433

Title of bill

An act to amend the emergency tenant protection act of nineteen seventy-four, the emergency housing rent control law, the administrative code of the city of New York and the tax law, in relation to deregulation thresholds

Purpose or general idea of bill

This bill amends New York State's rent regulation laws to adjust the "luxury decontrol" thresholds to account for the impact of inflation.

Summary of provisions

The rent regulation laws currently provide for the deregulation of housing units that have a legal regulated rent of $2000 or more per month and are occupied by a tenant or tenants whose incomes collectively exceed $175,000 per year. This bill would amend the four rent regulation systems by adjusting these thresholds to reflect inflation in the New York-Northern New Jersey-Long Island region during the intervening years since the current thresholds were enacted. Each threshold would be adjusted by an amount approximately equal to the percentage change in the regional consumer price index for New York-Northern New Jersey-Long Island between 1998 and 2008, raising the rent threshold to $2700 per month and the income threshold to $240,000 per year.

The bill would also provide for periodic annual adjustment of the thresholds according to the same price index and would make technical conforming changes to the rent regulation laws and the tax law. See the attached chart for a summary of the specific provisions of law the bill would amend.

Section 10 of the bill provides for an immediate effective date and for the expiration of these amendments upon the expiration of the underlying rent laws.

Justification

In 1993, New York State adopted a policy of deregulating High Income/High Rent housing units in order to accommodate the natural operation of the housing market while nevertheless affording ordinary tenants some degree of protection from skyrocketing rents. Today that compromise is at risk due to a simple oversight in the law: although the basic rents for regulated apartments have increased each year by the annual adjustment factor approved by the applicable Rent Guidelines Boards, the law currently fails to provide for corresponding increases in the income and rent thresholds that trigger deregulation. As a result, each year many rent-regulated apartments become susceptible to deregulation solely by virtue of inflation in the housing market. For example, when adjusted retroactively for inflation in regional housing prices, an apartment that rents for $2000 today would rent for roughly $1300 in 1998-$700 less than the deregulation thresholds adopted at that time. Without some basic mechanism to account for the effects of inflation, the deregulation thresholds will continue to decrease in value due to inflation and the tenant protections envisioned in the

original compromise behind the High Income/High Rent deregulation laws will become ineffective. This bill would remedy this basic flaw in the rent regulation laws by adjusting the deregulation thresholds for past inflation and providing for similar adjustments in the future.

Fiscal implications

None.

Effective date

This act would take effect immediately, with provisions.