The Housing Stability and Tenant Protection Act of 2019: A Simple Breakdown

On June 14th, in an effort to fight the affordability crisis in New York State, the state senate passed The Housing Stability and Tenant Protection Act of 2019, which revolutionizes and forever changes the way things were done in the past.

(NEW YORK, NY) — For one thing, this law is permanent, which ends the tradition of rent laws being extended every four to eight years and then temporarily extended. It applies to about 2.4 million residents who live in nearly one million apartments.

The law takes a particularly close look at IAI’s, or “Individual Apartment Improvements.” The state senate reports that landlords often abused the amount of rent increases they subjected to tenants, with landlords spending hundreds of thousands of dollars in “improvements,” and subjecting permanent rent increases on their rent stabilized units. Now, landlords can only pass on up to $15,000 worth of renovations over a 15-year period. This results in a monthly increase of approximately $89.

The state senate blames gentrification on these abuses, and removed the “high-rent decontrol threshold.” Which me that even if landlords found a way to legitimately raise their rents to up to 2,770$ a month, the units cannot be deregulated. This amount is now the capped amount of renovation costs that landlords can subjugate to tenants.

Apartments also cannot be deregulated even if landlords can prove that their tenants make more than $200,000.

IAI’s will also be reviewed and audited more carefully than in the past by the state housing agency.

Many argue that rent-stabilized apartments will not be able to compete with market-rate ones, and that $15,000 is not nearly enough revenue to maintain their buildings.

Democratic legislators supporting the bill however point out that low-income tenants since 2017 pay 52% of their income in rent due to IAI rent increases, as opposed to only 40% in 2002.

Rules concerning MCI’s, which are Major Capital Improvements, were also changed. MCI’s are building-wide upgrades, such as getting new boilers, plumbing, heating and cooling systems, new roofing or windows.

Now, owners can only pass on two percent of building-wide improvements to their tenants, as opposed to the previous six percent.

Condo and co-op conversions provisions were also amended, with the new requirement of 51% of tenants having to agree to the conversion, as opposed to 15%.

That 51% must also buy the units they agree to convert, thus prohibiting outside investors to purchase the units. Chief state senator Brian Kavanaugh says this measurement was designed to promote home ownership opportunities.

“Preferential” rent guidelines have also changed. Preferential rent is when a unit is rented for less than the legal rent established with the state. When a lease is renewed under preferential rent, the rent increases must now follow the Rent Guidelines Board.

Security deposits are also limited now to only one month’s worth of rent, and landlords must return a deposit two weeks after a tenant moves out.

Charges for late rent payments are also now capped to $50.

Tenant blacklists are also banned, which is when landlords ban tenants who have been sued in housing court for not paying rent or have repeatedly paid the rent late and thus created a nuisance.

Landlords must also give at least month’s notice if they plan to raise the rent more than five percent, and this also includes free-market units. Landlords must also give one month’s notice if they plan to not renew a lease.

Unlawful eviction is now a misdemeanor that is punishable by a civil penalty of up to $10,000 per violation.

The Rent Stabilization Association and the Community Housing Improvement Program, associations comprising of thousands of landlords, filed a federal lawsuit in Brooklyn along with seven independent landlords against the tighter measures against raising rents based on renovations.

They deem the new rent regulations as unconstitutional and is considered an unlawful government taking of property.

This is not the first time landlords backlash against new regulations. In 1920, when the first set of rent regulations were imposed in New Yorks State to protect tenants from rent increases from a housing shortage following World War I. Back then, city landlords could raise rent prices every month. As a result, the Real Estate Board of New York deemed it unconstitutional at the time as well, and argued it would not solve the shortage crisis the city faced.

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