Albany Must Repeal Vacancy Destabilization: Raising the Threshold Is Not a Solution

New York State’s rent-stabilization laws, its most important tenant-protection statutes, are set to expire on June 15—in seven months—and must be renewed by the state legislature and governor.

The most important fight will be over the vacancy-destabilization amendments—which end rent controls and eviction protections for vacant apartments once the rent is high enough—that were instituted by the New York City Council and Mayor Rudy Giuliani in 1994, and by Governor George Pataki and the state legislature in 1997.

The cumulative effect of these and other pro-landlord amendments has been devastating. They have eroded rent regulations to the point where many tenants in the city and suburbs, especially younger and newer residents, effectively have no rights in dealing with their landlords. They make long-term residents targets for harassment and eviction. They have driven rents up all over the area, pushing less affluent people out of their neighborhoods and often out of the state.

The last time the rent laws came up for renewal in Albany, in June 2011, the threshold for deregulation was raised from $2,000 a month to $2,500, but vacancy destabilization was left in place. Governor Andrew Cuomo and Assembly Speaker Sheldon Silver tried to spin—and are still trying to spin—this as a great victory for tenants, but it was merely a cosmetic change that has had little actual effect.

Tenants must insist on full repeal of vacancy destabilization. Simply raising the threshold—some legislators have suggested $2,800 or $3,000—will not work. Many rent-stabilized apartments owned by the big landlords already rent for more than $3,000, so all they need is one turnover to take the unit out of rent and eviction regulation. For apartments with rents below that, these big landlords will reach the target by spending whatever it takes on renovations. They would be foolish not to do so, as this one-time expenditure buys them permanent release from rent and eviction restrictions. In general, these big landlords—for example, the Rudins—comply with the rent laws and do not engage in overt harassment of their tenants.

But dishonest landlords will continue to do what they do now. Instead of spending the amount needed to reach the deregulation threshold on refurbishing the vacant apartment, they re-rent to an unsuspecting tenant and stop registering the apartment annually with the state housing agency, then wait four years, and hope that the tenant does not file an overcharge complaint. As many tenants are paying preferential rents (lower than the legal rent), they think they have no reason to file a challenge and if four years go by, it is too late because of one of the worst of the 1997 amendments. Some owners simply raise the rent above the threshold and assume that their tenants don’t know they have the right to challenge it.

Because of the lack of enforcement, most dishonest landlords get away with this illegal deregulation. No one knows how many such apartments have been removed, but there are definitely tens of thousands.

Raising the threshold will also do nothing to discourage the predatory behavior we have witnessed for the last several years, with speculators paying commercially unreasonable prices for rent-regulated buildings and then aggressively trying to force tenants to give up their homes. They bring frivolous eviction cases against tenants, pressure them to accept meager buyouts, force them to live for months amidst disruptive and dangerous construction work, and pay so-called tenant relocators to badger and threaten them.

As long as there is a possibility of deregulation by getting tenants to move, these sharks will continue to disrupt the lives of New Yorkers who rent, and our scarce supply of affordable rental housing will continue to be reduced by their depredations.

In addition, the Legislature must reregulate the 300,000 to 400,000 apartments that have been lost to vacancy destabilization over the last 20 years in New York City and Nassau, Westchester, and Rockland counties, and roll back their rents. Reregulating these units will extend protections against arbitrary rent increases and evictions to market-rate tenants who now have virtually no rights. Raising the deregulation threshold will do nothing for these tenants.

There are many other changes needed to stop the loss of rent-regulated housing, and to close loopholes that allow landlords to jack up regulated rents. For starters, reform of the preferential-rent loophole; reducing rent increases for Individual Apartment Improvements (and greater regulatory oversight of IAIs); making rent increases for Major Capital Improvements temporary surcharges; protections for Mitchell-Lama and Section 8 buildings; eliminating the bar on challenging overcharges more than four years old; and restoring the rent-registration system to its pre-1993 status when it had some teeth.

Unless vacancy destabilization is repealed, however, none of these other necessary changes will ultimately matter, because over the next several years, so much rent-regulated housing will disappear that tenants will no longer have the political power to win renewal of the laws.

Indeed, that is the real-estate strategy: Keep renewing the laws in their weakened form, as long as they allow this erosion to continue. That is why the state extended the rent laws for eight years in 2003, and landlord lobbyists in 2011 proposed an unprecedented 14-year extension, to 2025. By then, there would be so few rent-regulated apartments left that they would be able to convince the legislature to let the laws expire.

We should remember that the real-estate lobby agreed to the 2011 increase in the deregulation threshold. Otherwise, Senate Republican Majority Leader Dean Skelos would not have passed it. The landlords knew that this was basically a symbolic change.

The GOP’s recapture of a solid but narrow state Senate majority in this year’s election makes our job infinitely harder. We must put enormous pressure on our friends in the Democratic-controlled Assembly to persuade Speaker Sheldon Silver to draw a line in the sand and force the Senate to strengthen our rent laws. We must let Gov. Cuomo and every member of the Senate and Assembly know that raising the deregulation threshold again will not stop the loss of affordable housing, nor stop any of the abuses we now see in the market as a result of the weakening of the rent laws.