New York City has a system of rent stabilization that is meant to provide affordable housing to the working class. The rent stabilization program limits the rents a landlord can charge and caps the annual rate of rent increases. Landlords must also offer renewal leases and required services to tenants, who can be evicted only for specific reasons set forth in the law. The subject is controversial and leads to many landlord-tenant disputes. This article provides an overview of the rent stabilization program in New York City.
The rent stabilization program is overseen by the New York State Division of Housing and Community Renewal, or the DHCR. The DHCR shares some responsibilities for regulating rent stabilization with the Housing Courts of New York City. The terms of the rent stabilization regime are set forth in the Rent Stabilization Code, 19 NYCRR Parts 2520-2530. Actions brought in Housing Court to enforce the Rent Stabilization Code are based on the Real Property Actions and Proceedings Law (RPAPL).
There are a variety of ways for a building to become rent stabilized. Buildings become rent-stabilized if they contain six residential units or more and were built between February 1, 1947 and January 1, 1974. Tenants in buildings built before February 1, 1947 and who moved in after June 30, 1971 are rent stabilized. Also, rental units that come off rent control become rent stabilized. Lastly, buildings owners may elect to enter the rent stabilization program in order to receive real property tax abatements under the J-51 and 421-a programs. However, note that not all units in a rent stabilized building may be in the program.
Rental units leave the rent stabilization program in a few ways. If the building entered the rent stabilization program via J-51 or 421-a, the building generally becomes deregulated at the end of the last lease entered into during the period there was a tax abatement. There is also high-rent and high-income deregulation. A rental unit leaves the rent stabilization program when the legal rent exceeds $2,000 and the existing tenant vacates. Landlords may seek to deregulate an occupied unit whose legal rent exceeds $2,000 if the tenant’s annual household income exceeded $175,000 for the preceding two calendar years.
Landlords cannot raise rents for rent-stabilized units with three exceptions. Every year, the Rent Guidelines Board determines a maximum allowable rent increase rate that landlords may set. Landlords may increase rent with the written consent of the tenant in return for increased services or equipment, or improves the tenant’s apartment. Landlords may also increase rent with the approval of the DHCR in case of hardship or if building-wide major capital improvements are installed.
By filing a complaint with the DHCR, a tenant may seek a refund of any rent paid in excess of the legal rate. If the overcharge in rent was willful, then the tenant can recover triple the amount of the overcharge. However, there is a four year statute of limitations to overcharge requests. This means that overcharges paid more than four years ago generally cannot be recovered.
The DHCR may reduce rents upon application if it determines that the owner has not provided required services such as heat, or did not repair the building or rental units. If a tenant receives a rent reduction, the owner cannot collect any increases until the services are restored, and the rent is restored by the DHCR.
Residents in the rent-stabilized rental unit of a relative may have the right to succession once the named tenant moves out or dies. For instance, a son who lives with his mother in her rent-stabilized apartment for more than two years may get a rent-stabilized lease for the apartment if she passes away or moves out.
Rent stabilization in New York City is a very complicated program for both landlords and tenants. Hopefully, this article provided a helpful overview of this system.