Rent Regulation in New York State takes the form of rent control and rent
stabilization programs. Each city in the state may choose whether to participate
or not, and as of 2007, 51 municipalities participated in the
program, including Albany, Buffalo, and New York City, where over one million
apartments are rent-regulated. In New York City, only buildings with six or
more apartments are subject to rent stabilization.
In 1920, New York adopted Emergency Rent Laws, which effectively charged the
courts of New York State with their administration. When challenged by
tenants, rent increases were reviewed by a standard of "reasonableness." The
definition of reasonableness was subject to judicial interpretation. Certain
apartments were decontrolled beginning in 1926, and the Rent Laws of 1920
expired completely in June 1929, though limited protections against unjust
evictions were continued. New York's current rent control program,
which began in 1943, is the longest-running in the United States.
New York City is the only large city in the United States that has strong rent
control laws. From 1943 to 1950, rent control was administered by the federal
government but has been administered by state government since 1950, although
state and city agencies shared administrative work from 1962 to 1984.
Rent regulation affects rent increases and prescribes rights and obligations
for tenants and landlords. Rent control
Rent control exists in New York City and a small list of other municipalities in
Nassau, Westchester, Albany, Rensselear, Schenectady, and Erie Counties.
= Qualification = To qualify for rent control, a tenant
must have been continuously living in an apartment since July 1, 1971. When
vacant, the unit becomes rent stabilized, except in buildings with
fewer than six units, where it is usually removed from the program. In
apartments within single and two-family homes, the tenant must have been
residing in the unit continuously since March 31, 1953 in order to qualify for
rent control. Once the unit becomes vacant, it leaves the rent control
program and is not eligibile for rent stabilization.
Rent control does not generally apply to units built after 1947.
= Terms = Rent control limits the price a landlord
can charge a tenant for rent and also regulates the services the landlord must
provide. Failure to provide these may allow the tenant to demand a lower rent.
Outside of New York City, the state government determines the maximum rents
and rate increases, and owners may periodically apply for increases.
In New York City, rent control is based on the Maximum Base Rent system. A
maximum allowable rent is established for each unit, and every two years, the
landlord may increase the rent up to 7.5% until the Maximum Base Rent is
reached. However, the tenant may challenge these increases on grounds
that the building has violations or the owner does not need to increase the rent
that much to cover expenses. Maximum base rent
In New York City, the maximum base rent is calculated to ensure the rent from
rent control units covers the cost of building maintenance and improvements.
As set up in the New York City Local Law 30 of 1970, the formula reflects real
estate taxes, water and sewer charges, operating and maintenance expenses,
return on capital value and vacancy and collection loss allowance. The MBR is
updated every two years to reflect changes in these expenses. The owner
must apply for the maximum base rent system for the tenants, but before the
MBR, rents were annually determined by the city/state, which developed its own
set of regulations. Rent stabilization
Rent stabilization exists only in New York City, Nassau, Rockland, and
Westchester Counties. It generally applies to units of six or greater built
before 1974 and not subject to rent control. Regulation and policies may
vary by municipality as to which buildings qualify. In addition, certain
buildings such as non-profit housing are not included in the program, but upon
leaving programs such as the Mitchell-Lama Housing Program or Section
8, they may enter rent stabilization if built before 1974. Also, apartments that
are converted into co-ops and condos and vacated after July 7, 1993 may not be
subject to rent stabilization. In order for rents to be placed under regulation,
the municipality must declare a housing emergency, there has to be a rental
vacancy rate of less than 5% for all or any class or classes of rental housing
accommodations, which requires a housing vacancy survey to demonstrate it.
= Qualification = The qualifications for rent
stabilization have been changed over the years, reportedly to curb perceived
abuses, which allowed the wealthy to enjoy rent increase protection that was
intended to protect the working class. From the passage of the Rent Regulation
Reform Act of 1997 to the Rent Act of 2011, rent stabilization was restricted
to apartments where the legal, or stabilized, rent was under $2,000 per
month. The 2011 law raised that to $2,500. The unit could be deregulated
once the rent went above $2,000 under the 1997 law, $2,500 under the 2011 Act,
and is either vacant or the household adjusted gross income was over $175,000
under the 1997 act or is $200,000 under the 2011 law, for two consecutive years.
If the stabilized rent is under $2,500, the residents' income does not affect
the rent stabilized status of the apartment. A tenant has to use the
stabilized apartment as their primary residence in order for the apartment to
remain under rent stabilization. Tenants who live in buildings built
between February 1, 1947 and January 1, 1974 or who move into a pre-1947
building or into certain post-1974 buildings that received tax breaks
qualify for rent stabilization if the other financial terms are met. As part
of city managed programs, some buildings become temporarily rent stabilized in
return for a temporary reduction in real estate taxes when those buildings have
been converted to residential use from another use group. Two of those
programs, J-51 for renovating buildings and 421-a for new construction, grant
temporary rent stabilization to tenants of apartments in those building, thus
overriding other qualifications. = Terms =
Rent stabilization sets maximum rates for annual rent increases and, as with
rent control, entitles tenants to receive required services from their
landlords and have their leases renewed. The rent guidelines board meets every
year to determine how much the landlord can set future rents on the lease.
Violations may cause a tenant's rent to be lowered.
History = Federal regulation =
In 1942, President Franklin D. Roosevelt signed the Emergency Price Control Act
into law. The goal of the act was to prevent inflation in the booming, fully
employed wartime economy by setting price controls nationwide. In November
1943, the Office of Price Administration froze New York rents at their March 1,
1943 levels. When the Emergency Price Control Act expired in 1947, Congress
passed the Federal Housing and Rent Act of 1947, which exempted construction
after February 1, 1947 from rent controls, but continued that regulation
for properties already completed by that date.
= State regulation = The State of New York took over when
Federal regulation ended in 1950. Under the first permanent state laws in 1951,
New York took a similar regulatory approach to the Federal Government. At
the time there were about 2,500,000 rental units statewide, 85% of them in
New York City. The initial laws covered all rental units, and regulated all
relationships between owners and tenants concerning rents, services, and
evictions. Into the 1950s, a severe housing
shortage prompted the first deregulation of rental units. In New York City,
apartments in single and two-family homes became deregulated after April 1,
1953. Cities and towns outside New York City were given permission to deregulate
when ready. The most expensive luxury apartments in New York City began to be
deregulated starting in 1958. By 1961, only New York City and 18 of New York's
57 other counties had rent regulation. = Mixed regulation =
New York City and the state government began dual administration of rent
regulation in 1962, and 75,000 expensive apartments were gradually deregulated by
1968. In 1969, construction and vacancy rates slumped, causing non-regulated
rents to rise nationally. This rapid increase in rents caused New York to
pass the Rent Stabilization Law of 1969, which introduced rent stabilization to
units built after the 1947 cutoff for buildings to be eligible for rent
control, covering approximately 325,000 units in New York City.
The Local Law 30 of 1970 introduced a new method of rent control price
calculation, based on the Maximum Base Rate, which adapted to the changing
costs faced by landlords, allowing them to pass those costs on to renters. A
1971 law took away New York City's ability to regulate rents and gave the
power to the state government, in Albany.
= State regulation = In June 2011, the New York State
Legislature in Albany enacted the Rent Act of 2011. It did the following:
Limited vacancy increases to once a year Reduced the permanent rent increase in
buildings of 35 units or more for individual apartment improvements to
1/60th instead of 1/40th of the cost Increased the minimum rent for
deregulation of an apartment to $2,500 Increased the household income to
$200,000 for deregulating an occupied apartment whose rent is at least $2,500
In June 2015, the New York State Legislature in Albany enacted the Rent
Act of 2015. Rent laws were extended four more years through 2019.
Increased the minimum rent for high-rent or high-income deregulation of an
apartment to $2,700, which will be adjusted each year by the one-year
increase allowed by the Rent Guidelines Board
Reduced the permanent rent increase in buildings with more than 35 units for
major capital improvements to 1/108th instead of 1/84th of the cost
Reduced the permanent rent increase in buildings of 35 units or fewer for major
capital improvements to 1/96th instead of 1/84th of the cost
Rental unit distribution = New York City =
See "Rent Stabilization in New York City" by the Furman Center for Real
Estate & Urban Policy for the 2011 figures.
See also Law of New York
Footnotes Further reading
Walter Block, "Rent Control" in The Columbia Concise Encyclopedia of
Economics. Robert M. Fogelson, The Great Rent Wars:
New York, 1917-1929. New Haven, CT: Yale University Press, 2013.
External links Text of the Rent Stabilization Law of
1969 Text of the Rent Regulation Reform Act
of 1993 List of rent stabilized buildings in New
York City