rent reform

Cuomo and Lawmakers Signal Compromise on Rent Regulation Reforms

Governor Andrew Cuomo speaks about his accomplishments during an Association for a Better New York luncheon at Cipriani Wall Street, April 4, 2019.
Governor Andrew Cuomo speaks about his accomplishments during an Association for a Better New York luncheon at Cipriani Wall Street, April 4, 2019. Photo: Ben Fractenberg/THE CITY

Advocates’ hopes for an aggressively pro-tenant transformation of New York’s expiring rent laws dimmed Wednesday when the state Legislature’s leaders announced they will work with Gov. Andrew Cuomo on a pact.

That makes it unlikely tenants will win an elimination of charges on rent bills for building improvements, which the governor has said is a no-go.

“Nobody does anything unilaterally, so that’s our reality,” Senate Majority Leader Andrea Stewart-Cousins (D-Westchester) told reporters in Albany following a closed-door meeting with Assembly Speaker Carl Heastie (D-Bronx).

“So we’re working together. We know we gotta engage the governor so we can do what we need to do about rent. We are looking for the strongest rent package we’ve ever seen.”

New York State Senate Majority Leader Andrea Stewart-Cousins (D-Westchester).
New York State Senate Majority Leader Andrea Stewart-Cousins (D-Westchester). Photo: andrea.stewartcousins/Facebook

With the rent laws expiring on June 15 and the Legislature firmly in Democratic hands for the first time in years, Heastie and Stewart-Cousins say they are in agreement on eight measures intended to bolster tenants’ rights and limit rent hikes.

Cuomo, in his State of the State address, announced his support for some of the reforms they propose — such as eliminating landlords’ power to remove vacated apartments from regulation once rents pass a certain threshold.

The governor also agrees on ending landlords’ right to sharply raise rents on tenants who received lower, so-called preferential rents on their previous leases.

Those steps would short-circuit power landlords won during the 1990s and 2000s to boost rents above the annual increases prescribed by the city Rent Guidelines Board.

But the governor remains at odds with legislative and tenant leaders on proposals to wholly eliminate landlords’ ability to pass on to tenants charges for building and apartment improvements.

Instead, both Cuomo and Mayor Bill de Blasio say it makes more sense to limit the rent increases to the amount of the actual expense of new boilers, windows and the like, and no more.

“You want to make repairs, but you don’t want to reimburse more than the capital improvement costs,” Cuomo said at a Friday news conference in Manhattan.

Abuses Raise Pressure

Under existing state rent laws, landlords may pass on the cost of building-wide “major capital improvements” through a permanent rent increase of up to 6% in any given year, spread over eight or nine years.

Owners also may boost the sticker price on vacant apartments after making investments, such as new kitchen appliances, applying a percentage of the cost to the rent.

New York State Assembly Speaker Carl Heastie (D-Bronx) attends the State of the Bronx address, Feb. 21, 2019.
New York State Assembly Speaker Carl Heastie (D-Bronx) attends the State of the Bronx address, Feb. 21, 2019. Photo: Ben Fractenberg/THE CITY

High-profile alleged abuses of rent hikes for major capital improvements (MCIs) and individual apartment improvements (IAIs) exposed by law enforcement and news reports have highlighted the limits of complaint-driven enforcement by the state Division of Housing and Community Renewal.

The cases also amped up the pressure from tenant groups to eliminate the cost pass-throughs to tenants.

But landlords say they need both options to recoup the costs of necessary building and apartment maintenance. They warn that if reforms go too far, disinvestment in maintenance could plunge buildings into disarray.

Rallying at the state Capitol on Wednesday, contractors and construction workers expressed fear that eliminating MCIs and IAIs will throw them out of work.

“We could lose our jobs and then what would we do?” said Ramon Naubarrete, a 40-year-old Bronx roof-repair worker said in Spanish.

Sajid Mahmood, a field supervisor at Bronx-based Delta General Contracting, told THE CITY that developers already have begun cancelling contracts because of the reforms lawmakers are considering.

“They say they cannot have the amount of work for us from the MCIs and IAIs cancelling,” Mahmood said. “Before they’d say do the entire building. Now it will be reduced to minimize work. They don’t need a bigger crew. It’s definitely affecting us.”

Meanwhile, some tenant advocates are focusing their ire on Cuomo.

Negotiating with the governor is “equivalent to giving real estate a seat at the table,” said Jonathan Westin, the head of New York Communities for Change, a group that advocates for low- and middle-income New Yorkers.

He added: “In no way should either side of the Legislature allow Cuomo to stump for landlords in rent negotiations.”

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