In a city where 65 percent of residents are renters, you can only imagine the impact that a change to the NYC rent laws would have on both tenants and landlords.
Well, in June of 2019, new rent laws were approved that are designed to benefit New York City renters. Or so it was thought.
Now that the laws have been in place for almost two months, it is evident that there may be some downsides to renters.
Read on to discover both the pros and cons of the NYC rent laws from the perspective of a renter.
Pros of the NYC Rent Laws for Renters
As mentioned in our previous post about the 4 things to know about the new NYC rent laws, some of the top benefits for renters include:
- Security deposits are capped at one month’s rent, which means that less money is necessary for tenants to pay upfront for an apartment. Plus, the landlord must return the security deposit within 14 days of the tenant leaving the unit.
- Landlords must give at least 30 days notice if they intend to raise the rent of a unit by more than five percent, and the longer a tenant has lived in the unit, the more notice a landlord must give.
- Tenants are more protected legally and landlords will face stricter punishment for discrimination or unlawful eviction.
In summary, less money upfront and more protection as a tenant are making renting an apartment in NYC more feasible for more people.
Although these may seem like positive changes in the eyes of an NYC renter, now let’s take a look at some of the downsides of these laws.
Cons of the NYC Rent Laws for Renters
1. Increased Competition
Because of the new housing bill, the upfront cost for renters is much lower. This can only mean one thing: Increased competition.
You see, the cheaper an apartment is upfront, the more people can afford it. This means that the competition for apartments in a city that already has less than a 1.5% vacancy rate is going to skyrocket.
Furthermore, apartments are going to get rented more quickly than before, which is why it is important to jump in on the one you want fast.
2. Landlords Can Be Pickier
The more applicants there are for an apartment, the pickier the landlord can be, which is why it is more important than ever to have a strong application.
If you don’t look good on paper, the landlord is more likely to turn you down because they know they’ll have a better applicant waiting right around the corner.
And because landlords now have more obstacles when it comes to evicting a tenant, they’ll want to make sure they are choosing the best applicants from the get-go in order to avoid potential legal trouble later.
3. Less Money Down Upfront = Less Application Wiggle Room
Because security deposits are capped at one month’s rent, those who may have been able to get away with an iffy application and history by putting more money down upfront no longer have that option.
For instance, if someone did not make more than 40 times the monthly rent or did not have a close relative as a guarantor, putting more money into the security deposit may have helped them beat out other applicants in the past. Without this option, renters must now have a near-perfect application in order to secure an apartment.
This is yet another reason why working with an experienced NYC real estate agent is crucial because they’ll help advocate for you and ensure your application is as strong as possible.
4. Fewer Concessions for Renters
In the past, landlords and building owners may have offered concessions in order to help apartments rent faster. Now, with more applicants, landlords are no longer incentivized to offer them concessions and the market share of landlord concessions was 30.6% in July of 2019, 1.6% lower than the previous month.
5. Landlords are Less Incentivized to Renovate
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.
Since this is no longer the case, landlords are more likely to leave apartments as-is rather than making upgrades because they are less likely to get back the money spent on renovating since they can’t necessarily roll it up into the price of rent.
Overall, although the new NYC rent laws do have some benefits, there are also a number of downsides that tenants should be aware of when searching for an NYC apartment to rent.
Are you searching for your first NYC apartment? Check out these 9 things you should know before renting in New York City!