ALBANY, N.Y. (CN) – A massive change to New York’s tenant regulations passed both chambers of the state Legislature on Friday, marking a major shift in state politics and curbing the power held by landlords and real estate developers.
The 36-26 vote by the Senate came with a standing ovation by the Democrats this afternoon, one day before existing rent regulations are set to expire. An hour later, the Assembly passed the bill 95-41.
“Today we are tipping the scales of justice and the rights of tenants back to where they belong,” said Assemblyman Victor Pichardo, a Democrat from the Bronx.
Touted by its supporters as “the strongest tenant protections in history,” the law is aimed at bolstering rent-stabilization measures. One such change would repeal vacancy decontrol, which currently allows landlords to remove certain units from rent stabilization and charge market rate as soon as they become vacant. A similar change would prohibit landlords from raising rent up to 20 percent after a unit becomes vacant.
Other changes cap capital improvement rent increases at 2 percent, down from the current 6 percent, while also preventing landlords from charging tenants market rate if they earn $200,000 or more.
Perhaps most importantly, the legislation makes all changes permanent instead of sunsetting new tenant regulations every several years.
The law would impact primarily apartments in New York City, but municipalities could opt into the law if less than 5 percent of apartments in the municipality are vacant.
Real estate developers and industry groups claim the new legislation will hurt housing in New York City, disincentivize owners from making building improvements, and potentially force some smaller landlords to sell their buildings. Those groups reportedly have threatened to sue to overturn to the new regulations.
Real estate groups, including the coalition Taxpayers for an Affordable New York, claim that fixed costs have risen by twice the rate of rent increases over the last two decades, and that more than 40 percent of New York City landlords will not be able to afford basic maintenance, taxes and utilities in five years if the legislation is signed into law.
“This legislation will not create a single new affordable housing unit, improve the vacancy rate or improve enforcement against the few dishonest landlords who tend to dominate the headlines,” the Taxpayers for an Affordable New York, a coalition of real estate groups, said in a a statement.
Tenant advocacy groups, largely happy with the rule changes, argue that many landlords have used rent hikes to purposely displace certain tenants, and that rent-stabilization laws have been written by the real estate industry for years.
“This bill is affirmation of the strength of the statewide movement that we are building together,” Cea Weaver, a campaign coordinator of Housing Justice for All, said in a statement.
Governor Andrew Cuomo, who has largely abstained from the debate, has said he will sign the bill into law.
The bill also has the support of New York City Mayor Bill de Blasio, who is now running for president. “Tenants have pounded on Albany’s door for decades for the protections they deserve,” de Blasio said earlier in the week. “This is a remarkable achievement that will halt displacement, harassment, and unjust evictions, and keep working families in the homes they love.”
There are roughly 1 million rent-stabilized apartments in New York City. While the law permits landlords to increase rent in rent-stabilized apartments, such increases are usually far lower than market-rate increases and must be approved by the city’s Rent Guidelines Board.
During hours-long debate over the bill in both chambers, both parties took starkly different positions, with Democrats saying pro-tenant rules were long overdue and GOP members slamming the bill as extreme.
“I thought it was April Fool’s Day,” said Assemblyman Andrew Garbarino, a Republican from Bayport, claiming landlords will now lose property without recompense in violation of the Fifth Amendment. “To me, this is close to insanity.”
Republican Assemblyman Michael Fitzpatrick, who represents Smithtown, said that “we knew this day was coming, certainly after last year’s election,” and called the bill extreme.
Predicting that it will harm tenants in the future, Fitzpatrick singled out vacancy decontrol as a provision that helps tenants who make $200,000 at the cost of poor people in need of affordable housing.
“We are protecting a class of tenant that does not merit or deserve that protection,” Fitzpatrick said. “Here we have families who need housing … but we have a system that encourages people to stay in a rent-controlled apartment whether they need two or three bedrooms or not.”
Fitzpatrick added that city officials have failed for years to create the necessary zoning and tax structures to encourage more affordable housing. “This is a temporary emergency that has lasted almost 70 years,” he said.
Staten Island Senator Andrew Lanza echoed these concerns, noting a person making $110,000 can now live in a rent-stabilized apartment. “In Staten Island they call you rich, that’s what they call you,” said Lanza, who is Republican.
Assemblyman Edward Braunstein, a Democrat from Bayside, voted in favor of the bill but said he worries how it will affect property taxes, noting that city officials have offered no estimates on such impact. Braunstein said higher property taxes on condos and co-ops could be shifted to tenants by increased assessments and maintenance fees.
Senator Alessandra Biaggi, a Democrat who represents parts of Westchester County and the Bronx, called the bill a “tectonic shift” and called out members of her chamber who had previously “sold out tenants” in favor of well-funded landlord and property owner interests.
“People over money always wins,” Biaggi said.