Prohibits an owner from adjusting the amount of preferential rent upon the renewal of a lease

8 Co-sponsors

• Tony Avella
• Ruben Diaz
• Ruth Hassell-Thompson
• Shirley L. Huntley
• José Peralta
• Bill Perkins
• José M. Serrano
• Toby Ann Stavisky

BILL NUMBER:S448

Title of bill

An act to amend the emergency tenant protection act of nineteen seventy-four and the administrative code of the city of New York, in relation to the regulation of rents

Purpose or general idea of bill

To prohibit an owner from adjusting the amount of preferential rent upon the renewal of a lease.

Summary of specific provisions

Subdivision a-2 of section 10 of section 4 of chapter 576 provides that where the amount of rent charged to and paid by the tenant is less than the legal regulated rent for the housing accommodation, the amount of rent for such housing accommodation may only be increased to the previously established regulated rent, as adjusted by all applicable guidelines increases and other increases authorized by law; provided, however, that such vacancy shall not be caused by the failure of the owner or an agent of the owner to maintain the housing accommodation in compliance with the statutory warranty of habitability. The law is also deletes provisions that permit an owner to abandon a preferential rent upon renewal of a lease.

Justification

As housing costs increase exponentially across the city of New York, the displacement of working families and middle class residents from rent regulated apartments has reached crisis proportions. Without question, the displacement is aggravated by the ability of landlords to abandon a preferential rent upon the renewal of a lease.

Prior to a change in law, a preferential rent was permanent for the duration of a tenancy, and could only be increased upon vacancy. However, as a result of an unfortunate provision inserted into the law during the eleventh hour in 2003, landlords are now permitted to abandon a discounted, preferential rent and impose the statutory rent upon vacancy or renewal of a lease. Pursuant to this provision, tenants throughout New York city have faced sudden, unanticipated and staggering rent increases upon lease renewal, often forcing them out of rent-regulated apartments.

Equally problematic, there is no "clean hands" requirement that the landlord conduct itself responsibly in order to abandon a preferential rent and impose the maximum rent upon a vacancy. Consequently, if a tenant leaves an apartment that is uninhabitable due to lack of heat, hot water, electricity, repairs or sanitary conditions, the landlord remains eligible to dramatically increase the rent upon vacancy of an apartment. As a result, current law encourages bad actors to deprive tenants of a habitable apartment in order to benefit from the ability to abandon a preferential rent.

In order to stem the displacement crisis in New York City, and preserve the affordable housing stock that remains available to working families and moderate-income residents, the rent regulation laws are in need of comprehensive reform. Substantial modification of

the preferential rent provisions is an important step in that direction.

Prior legislative history

2009-2010: S.2251/A.465-A

Fiscal implications for state & local governments

None.

Effective date

This act shall take effect immediately.