New York City is notorious for lofty rents, but a new housing bill passed last Friday might shift the power dynamic back to renters.
Although NYC is recognized for its stringent housing laws and regulations that favor renters, that hasn’t stopped city-wide rents from skyrocketing in the last few decades.
The average rent for a non-rent stabilized 1 bedroom apartment in NYC is $2,945, compared to $1,928 from just 7 years ago.
In an attempt to protect local tenants who are being priced out of their homes, the newly introduced rent reform laws are establishing some new ground rules for landlords.
Here’s what you need to know about the NYC rent laws:
1. Security deposits will be capped at one month’s rent
Security deposits can represent a huge barrier to low-income individuals, and limiting the deposit to one month’s rent will make it easier for many to afford a place to live. However, this could make it difficult for smaller landlords to absorb the cost of potential damage to property.
2. It will be harder to convert rent-stabilized apartments into market-rate apartments
Previously, if a tenant living in a rent-stabilized apartment did not renew their lease, the landlord had the right to raise the rent by up to 20%, or even convert the unit into a market rate apartment. This has contributed to the major gentrification of New York neighborhoods and decreased the number of rent-regulated apartments by 300,000 in the last 25 years.
The new law either prohibits or dramatically limits rent increases in regulated buildings. The value of rent-regulated buildings is expected to drop 20-45% following the release of this new law, and real estate investors have been left scrambling (just like when news of the L train shutting down shook the city…until it didn’t).
3. Tenants will receive increased legal protection
It’s now prohibited for landlords to discriminate against tenants based on their housing history (these tenants are often added to a “tenant blacklist” shared among landlords).
Unlawful evictions are also now punishable by law, and courts have to take into consideration factors like school enrollment (of children) and health conditions for tenants facing eviction.
Tenants also now have up to a year to find a residence in the same neighborhood, rather than the original six months. All these changes could deter landlords from pursuing unfair eviction cases.
4. More affordable application fees
Gone are the days of $300+ application fees. The new law dictates that landlords can only charge $20 for application fees (including fees for background checks).
Not having to pay a sizable (non-refundable) chunk of money for each application can go a long way towards actually affording that next apartment.
These are just a few major points of discussion of the 74-page bill, but it’s been enough to cause an uproar, with landlords threatening to sue.
Real estate must be a mutually beneficial relationship, and restrictive legislation could drive the supply of affordable housing further into the ground if landlords are no longer motivated to routinely maintain and invest in regulated buildings.
Meanwhile, advocates of universal rent stabilization want even stricter rules, but there are always two sides to every story. Ultimately, it’s important to strike a balance in the relationship between landlords and tenants in this city we all call our home.
Want to learn more about how the new rent laws in NYC may impact you? Contact us!