Amd S232-a, RP L; rpld SS26.504.2 & 26-403 sub e 2 sub (k), add S26-407.1, amd SS26-405 & 26-511, NYC Ad Cd;
rpld S2 sub 2 (n), Emerg Hous Rent Cont L; rpld S5 sub a 13, amd S10, Emerg Ten Prot Act of 1974
Provides market rate tenants in New York City notification with respect to their expiring lease, not more than one hundred fifty days and not less than ninety days prior to the end of the tenant's lease term, of the expiration of the lease term and whether the landlord will offer a new lease and if so upon what terms or whether the landlord will terminate the lease (Part A); eliminates fuel pass-along charges for occupants of rent controlled housing accommodations (Part B); reduces amount of maximum rent increase collectible in one year (Part C); makes conforming technical changes; relates to vacancy decontrol (Part D).
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7378
SPONSOR: O'Donnell TITLE OF BILL: An act to amend the real property law, in relation to
notice to market rate tenants of lease expiration (Part A); to amend the
administrative code of the city of New York, in relation to eliminating
fuel pass-along charges for occupants of rent controlled housing accom-
modations (Part B); to amend the administrative code of the city of New
York, in relation to reducing the amount of maximum rent increase
collectible in one year (Part C); and to amend the administrative code
of the city of New York and the emergency tenant protection act of nine-
teen seventy-four, in relation to making conforming technical changes;
and to repeal paragraph 13 of subdivision a of section 5 of section 4 of
chapter 576 of the laws of 1974 constituting the emergency tenant
protection act of nineteen seventy-four, paragraph (n) of subdivision 2
of section 2 of chapter 274 of the laws of 1946, constituting the emer-
gency housing rent control law, and section 26-504.2 and subparagraph
(k) of paragraph 2 of subdivision e of section 26-403 of the administra-
tive code of the city of New York, relating to vacancy decontrol (Part
D)
PURPOSE OR GENERAL IDEA OF BILL:
This bill would protect tenants in several ways: by giving market rate
residential tenants in NYC additional time to find new housing if their
leases are going to be terminated or renewed on terms that are unafford-
able; by prohibiting fuel pass-alongs to rent regulated tenants; by
reducing the amount of maximum rent increase collectible in one year;
and by repealing vacancy and increasing the dollar amount for re-regu-
lating units.
SUMMARY OF SPECIFIC PROVISIONS:
This legislation would protect tenants in four different ways. First, it
would amend Real Property Law section 232-a, which currently applies to
month-to-month tenancies in New York City, by numbering the existing
text as subdivision 1 and adding a new subdivision 2. New subdivision 2
would require landlords to notify tenants in housing that is not subject
to the rent regulation laws of whether the landlord intends to terminate
or renew the tenant's lease. The notice must be given in writing, at
least 90 days prior to expiration of the lease. If the landlord offers
renewal, the notice must state the terms of renewal, and must give the
tenant 60 days to accept the offer and renew the lease. These provisions
are modeled on similar protections for tenants in rent-stabilized hous-
ing, set forth in 9 NYCRR section 2523.5. Second, it would amend the NYC
Administrative Code by adding a new section 26-407.1 that prohibits fuel
adjustment or pass-along increases in rent to tenants under rent
control. Third, the bill would amend NYC Administrative Code section
26405(a)(5) by reducing the amount of maximum rent increase that is
collectible in one year. Fourth, the bill would address vacancy decon-
trol by repealing the existing dollar amount provisions and enacting new
and higher dollar thresholds.
JUSTIFICATION:
New York City is a city of renters, but protections vary depending on
the type of housing one occupies. New York City's affordable housing
crisis is exacerbated as more and more apartments become de-regulated,
causing tenants to lose not only protection against unaffordable rent
increases, but also protections related to lease renewal. Tenants in
rent-regulated housing have a right to renewal of their leases, as well
as notice from their landlords regarding expiration of the lease term
and the terms of the renewal lease. Tenants in un-regulated housing
have no such protection, and may have only a very short time period to
find new housing if their landlords choose not to renew their leases or
a landlord gives a tenant only very short notice of an offer to renew
with a very high rent increase that the tenant cannot afford. This
legislation would give tenants at least 90 days' notice of non-renewal
or the terms of renewal, and would also give a tenant 60 days to accept
any renewal offer. This modest protection - which does not create a
right to renewal of the lease or limit the landlord's ability to change
the terms of the lease - would at least give tenants in non-regulated
housing a more reasonable amount of time to seek new housing than they
currently have.
Many of the tenants who reside in units subject to rent control are
senior citizens living on fixed incomes. Unlike residents in other forms
of regulated housing, residents in rent controlled apartments face a
yearly fuel cost adjustment, or pass-along, based on a percentage of the
total amount of fuel delivered to a building, and divided by the number
of rooms in that building. When fuel costs are as high as they have
been, rent controlled tenants face excruciating rent hikes. Unlike both
rent regulated tenants and market rate tenants, rent controlled tenants
are in no way insulated from sudden and catastrophic rent increases
based on higher fuel costs. This bill provides protection to the resi-
dents of units subject to rent control, who are likelier to be older,
more vulnerable, and less financially secure than tenants in other kinds
of housing.
The New York City Rent Control Law was amended in 1971 to create the
Maximum Base Rent system of automatic annual rent increases. Maximum
Base Rents (MBRs) are established every two years by the agency adminis-
tering rent controls. The MBRs establish ceilings for rent increases.
Within the MBR ceilings, rents are increased every year by 7% percent
over the previous maximum collectible rent. Other additional rent
increases are permitted for such things as major capital improvements or
the installation of additional equipment in an apartment. The MBR system
was created during a period of unusually high national inflation. The
annualized inflation rate in the United States during the period
1970-1980 was 7.81%. In contrast, the annualized inflation rate from
2000-2009 was only 2.56% This legislation is necessary to bring the
automatic annual rent increases for rent controlled apartments back into
a reasonable, relationship with current rates of inflation.
There is an extreme shortage of affordable housing in New York City and
the surrounding counties. Rent regulation represents the largest number
of affordable rental units on the market. The system put into place was
meant to offset market pressures, but it has been systematically disman-
tled, allowing for more and more units to leave the rent regulated
system. Vacancy decontrol has been the primary way that units have left
rent regulation. Available data and several studies suggest that over
300,000 rent stabilized apartments have been removed from regulation in
New York City and the counties of Westchester, Nassau, and Rockland
under vacancy decontrol. Repeal of vacancy decontrol and re-regulation
of prior units is essential to restore the integrity of the rent regu-
lation systems and to protect the state's declining supply of affordable
housing.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
Different parts of this act shall take effect at different times. Part A
shall take effect 90 days after having become law. Parts B shall take
effect on the first of September next succeeding the date on which it
shall have become a law; provided that the addition of section 26-407.1
to the city rent and stabilization law made by section one of this act
shall remain in full force and effect only as long as the public emer-
gency requiring the regulation and control of residential rents and
evictions continues, as provided in subdivision 3 of section 1 of the
local emergency housing rent control act. Part C shall take effect imme-
diately provided that the amendments to section 26-405 of the city rent
and rehabilitation law made by section one of this act shall remain in
full force and effect only as long as the public emergency requiring the
regulation and control of residential rents and evictions continues, as
provided in subdivision 3 of section 1 of the local emergency housing
rent control act. Part D shall take effect immediately after having
become law.
