Home News How NYC landlords continue to use a rent law loophole to spike regulated rents

How NYC landlords continue to use a rent law loophole to spike regulated rents

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About 30 rent-regulated apartments in many of 15 buildings in the East Village owned by Madison Realty Capital Advisors and former landlords have been consolidated into “Frankenstein” apartments, according to residents and housing advocates. Told Goshamist.

They said they have permission to combine an additional 20 rent-regulated apartments.

Prior to the Housing Stability and Tenant Protection Act of 2019, landlords Array of tools available Raise regulated apartment rents, such as raising rents by 20% when units become vacant, or passing on the cost of building or apartment upgrades to tenants.

Once the rent exceeded $2,774.76, the apartment was deregulated, freeing the landlord to raise the rent at will.

However, the various methods of raising rents beyond what city commissions dictate each year quickly became the target of abuse and fraud.

However, new legislation that overhauled the system would significantly reduce the amount of rent increases by limiting the costs that could be passed on to tenants and the length of time tenants had to bear the costs of the upgrade. , has eliminated almost all of the ways landlords can get rent increases. .

However, the new law does not address how much rent landlords can charge after combining two or more rent-regulated apartments, allowing property owners to take advantage of loopholes to set rents at whatever amount they want. It is now possible.

“The law, at best, is unclear on this issue,” said Senator Brian Kavanagh, chairman of the Housing Commission. 2021 law An attempt was made to close the loophole, but the bill did not pass the commission.

Shortly after the 2019 laws took effect, the state agency responsible for enforcing them, the Department of Housing and Community Rehabilitation, said: issue a rule To combat a workaround the landlord came up with.

Commissioner RuthAnne Visnauskas said the agency will issue rules and regulations in spring 2020.

Then came the COVID-19 pandemic.However, in the years since the pandemic began, no regulations have been issued, allowing the practice to continue as New York City’s rent reach record heightsmean $5,113/month For apartments in Manhattan.

DHCR spokesperson Charni Sochet said the agency is still working on new rules to address the loophole. She didn’t say what caused the delay.

“How rents are set when rent-regulated units are combined is very specific and depends on the regulatory status of each apartment and the nature and extent of alterations or combinations of apartments or other building spaces, A unique case will be subject to administrative and/or legal review for determination,” Sochet said in an email.

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