Will New State Unit Help Protect Tenants? Not Without Resources, Advocates Say

Gov. Andrew Cuomo’s proposal to create a state “Tenant Protection Unit” is a welcome first step, tenant advocates say, but the unit will likely not be effective at preventing illegal rent increases unless it has adequate resources and stronger regulations to enforce. 

The unit, proposed in December, would be part of the state Homes and Community Renewal department’s Office of Rent Administration. Tenant advocates say it reflects a growing sense that inadequate enforcement of the rent regulation laws is a key enabler of escalating rents. Last year, a survey by Make the Road New York found that half the apartments it looked at had illegally high rents—and that was among apartments that were still rent-stabilized. 

“There’s a real recognition [in the movement] that it’s time for HCR to make these changes,” says Make the Road organizer Hilary Klein. 

 Two main issues are that landlords have not registered the rents for 300,000 apartments—more than a quarter of the units that are supposedly regulated—and that there is virtually no enforcement against fraudulent apartment-renovation increases.

“Lack of enforcement has been a problem ever since the law was enacted,” says longtime activist Michael McKee. From 1969 to 1984, he notes, the state delegated enforcement to the Rent Stabilization Association—the landlord organization, which he says spent most of its money on lobbying and litigation against rent regulations.

That lack of enforcement is a powerful incentive for owners “to commit fraud,” says Ellen Davidson of the Legal Aid Society. For example, she says, there is “absolutely no oversight” of rent increases based on individual-apartment improvements, for which landlords can raise the monthly rent by 1/40 or 1/60 of what they say they spent.

Tenant groups have identified three areas as priorities for increased enforcement, says Maggie Russell-Ciardi of Tenants & Neighbors: overcharging, fraudulent major-capital improvement increases, and harassment, such as by predatory-equity owners. They also believe that HCR needs to enforce the law more actively, says Klein. Currently, she explains, the agency will not investigate a possible overcharge unless the tenant complains about it—and “most tenants don’t know that HCR exists or what their rights are.”

Though the Cuomo administration has been secretive about its plans for the TPU, Klein says, there are indications the unit will follow one recommendation from tenant groups: Instead of waiting to receive tenant complaints, it will investigate rent increases in the entire building if an illegal overcharge is found in one apartment.

 

Rules and Resources Needed

Advocates see two likely problems, however. One is lack of resources. The Office of Rent Administration staff has declined from 700 to 300 people in the past 20 years. These workers have to cover the 1.1 million rent-regulated apartments in the state, handling both tenant complaints and landlords’ requests for MCI increases. The TPU is expected to have about 25 staffers. If the state does not hire new workers—a strong possibility given the budget crunch and Gov. Cuomo’s fiscal conservatism—HCR will simply move staff over from other jobs in ORA.

“25 people for an entire state is a beginning, but nowhere near what’s needed,” says Davidson. Others say that without more staff, the unit will be “useless” and “meaningless.” 

“My guess is that they won’t have the resources to go after anything but the worst cases,” says Klein. Two things the state should do, she says, are modernizing HCR’s computers so it can use its database to detect fraud, and shortening the time needed to resolve tenant complaints, now usually a year or two.

The second issue is the regulations the state uses to determine the conditions that will trigger enforcement. In addition to weakening the overall rent laws through vacancy decontrol and other provisions, former Gov. George Pataki’s administration also changed these regulations to limit enforcement. These changes, advocates say, included reducing the kind of conditions that qualify for rent reductions if the landlord fails to make repairs, increasing the amount of notice tenants have to give landlords before applying for a rent reduction; effectively eliminating penalties for failing to register rents; and no longer requiring landlords to pay triple damages to tenants they illegally overcharged. 

Tenant groups have developed about 20 recommendations for changes in HCR’s rent-stabilization code. These include stricter oversight of rent increases for individual-apartment improvements, including requiring permission for increases of more than 20 percent. They urge making MCI increases temporary surcharges instead of permanent increases, and denying them in buildings with serious violations and to landlords who harass tenants. 

“HCR should proactively enforce New York’s rent-stabilization laws in order to stop ongoing rent overcharges to tenants; to prevent the transformation of illegal rents into legal ones due to the four-year rule; and to prevent the unlawful deregulation of rent-stabilized units,” the list says. To do that, it adds, HCR should “program its database to automatically detect illegal rent increases registered by landlords or failures to register rents. Any illegal increase, whether at a lease renewal or a vacancy, should trigger an investigation by DHCR, without the need for a tenant complaint.” 

If landlords fail to register rents, it adds, the agency should “enforce the Rent Stabilization Law’s rent-freeze provisions.”

Another important change, says Davidson, would be for HCR to clarify its succession rules, so that tenants leaving an apartment can pass it on to family members without risking eviction.

The bill that renewed the rent laws last year required changes of that nature. This, advocates say, was largely a concession to black and Latino legislators who were unhappy that the Cuomo administration had not supported repealing vacancy decontrol. Such changes would not require approval from the Legislature. HCR could modify the code on its own, or Gov. Cuomo could order changes. 

So far, however, tenant advocates have not seen any movement in Albany. In fact, says Davidson, Cuomo’s is the third Democratic administration since Pataki left office in 2006 that has not made any changes to HCR’s code.