Existing state laws allow Athineos to add a fraction of improvement costs to the current $1,300 monthly rent. When the apartment becomes vacant, he could also raise the next tenant’s rent by 20% -- plus another small sum to compensate for the lengthy period his previous renter had minimal increases.
The proposals before the legislature -- nine bills in all -- would put an end to all of that. In addition, legislators are considering repeal of a law that allows apartments to be deregulated once the rent reaches $2,775.
The current laws expire on June 15, and a vote is expected before the end of the legislative session on June 19. Governor Andrew Cuomo said Thursday in an interview on WAMC radio that he is confident the Assembly can pass the package of bills, but that Senate passage may be more difficult. “Whatever the Senate can pass, I know the Assembly can pass and I will sign,” he said.
Apartment Breakdown
If the bills pass as written, any increase to an apartment’s allowable rent would largely be limited to the annual hikes by the local rent guidelines board, which in recent years have ranged from zero to less than 2% for a one-year lease.
“We would just stop dead in our tracks,” Athineos said. “We would not do any individual apartment renovations. We would keep patching and repairing and putting Band-Aids on everything. I don’t know if I would want to run a building like that. I’m not sure how much longer we would be able to stay in business.”
The new rules, if adopted in their entirety, would lower property values for apartment buildings with rent-stabilized units in them, said Victor Sozio, executive vice president of investment sales at Ariel Property Advisors. Already, would-be buyers are demanding lower prices and higher yields from multifamily properties, on the assumption that their future gains will be limited. The number of deals for New York City apartment buildings plummeted 43% in the first quarter to just 75 transactions, according to a report by his firm.
Tenant Harassment
Tenant advocates say the entire package of reforms is necessary to rebalance a system they see as tilted in favor of owners, where landlords have powerful financial incentives to raise rents and deregulate units, and tenants have too few tools for self-protection.
“If landlords are able to raise the rents so much when an apartment changes hands, there’s really an incentive to harass people out of their homes,” said Cea Weaver, campaign coordinator for the Upstate-Downstate Housing Alliance, a statewide umbrella group of 70 tenant advocacy organizations. “They add all these costs to the legal rent so it’s no longer really affordable.”
Anita Long, 62, who’s lived in a one-bedroom rent-stabilized apartment near Yankee Stadium in the Bronx since 1992, said her rent appears to be heading for that fate. The six-story building, off the Grand Concourse, is at the heart of an area that was rezoned by the city to make way for new development. At about the same time, her landlord began a spate of improvements.
In the past year, those fixes led to two increases in her $1,200 monthly rent -- $115 after her kitchen and bathroom fixtures, all holdovers from the 1950’s, were replaced, and $49 after the building’s elevator was upgraded along with some pipes, she said.