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New York State Adopts Tougher Rent Control Measures


Following in Oregon’s footsteps, New York State just passed tougher rent control legislation that not only increases rent control requirements in New York City, but allows other municipalities across the state to adopt rent control measures.

In New York State, as in Illinois, the 2018 elections resulted in a shift to the left at the state level. While the New York Assembly had long been run by Democrats, the New York Senate had been under the control of Republicans. This changed in the last election, putting Democrats in charge of both houses. It is the Democratic control of the state legislature than has made the most recent rent control law possible.

In New York State, as in Illinois, the 2018 elections resulted in a shift to the left at the state level.

Tenant advocates in New York have been pushing for Universal Rent Control in recent years. While the new state law does not achieve all of the goals of Universal Rent Control, it does move the state closer to this goal. Among the changes in the new legislation are:

  • elimination of “vacancy decontrol” which allows for the deregulation of apartments from rent control measure when they hit certain rents
  • elimination of the “vacancy bonus” that permits property owners to increase rents by up to 20% when a tenant vacates a rent-stabilized apartment
  • additional restrictions on how much property owners may increase rents to cover the costs of renovations
  • Expansion of rent control measures from New York City to towns and cities across the state
  • elimination of the “sunset provisions” that currently require these measures to be re-approved every few years
  • limitation of security deposits to one years’ rent.

About the only silver lining in this otherwise unfortunate development is the absence of “good cause” language in the legislation. This is something the tenant advocates wanted, but were unable to get enacted.

The New York Times published an article entitled “Rent Regulations in New York: How They’ll Affect Tenants and Landlords” on June 12, 2019. In it, Jonathan Westin of New York Communities for Change is quoted, saying “I think this is a huge win for the tenant movement that will impact the lives of millions of renters in a way that beats back the real estate industry.”

This is not a fight about policy… it is a fight about character and the deep conviction of many tenant advocates that they are at war with property owners.

The tone of this quote will sound familiar to anyone in Chicago who is following the debate over rent control in this city. This is not a fight about policy, or the merits of rent control versus any other method of creating affordable housing. It is a fight about character and the deep conviction of many tenant advocates that they are at war with property owners.

If the debate focused solely on the cost-benefit of rent control, this article would not be necessary. By any objective measure, rent control can be proven to be the least effective (in fact, ineffective and even harmful) way to create more affordable housing. In many ways, New York City is the poster-child for rent control’s ill-effects.

In many ways, New York City is the poster-child for rent control’s ill-effects.

It is likely that this new legislation in New York State will only make the current housing crisis in New York worse. It virtually insures that fewer new units will be built, and that older properties will deteriorate further as property owners have even fewer incentives to invest in their properties. The predictable outcome of this bad legislation is that the entire rental market will become more polarized between luxury new construction and expensive but substandard older housing stock. This is a fate we will work hard to avoid here in Chicago and Illinois.

 

 

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