To put it simply, rent control is part of a government program. Its purpose is to provide limits regarding the amount of rent that landlords can ask for.
The intention of a rent-controlled apartment is to make housing costs more affordable for those who don't have a high income. It's vital to note that rent laws have been quite controversial. 31 states in the US currently prohibit local governments to impose rent regulation measures.
New York City is often taken as an example of how rent-controlled apartments may not be such a good option, especially for landlords.
Even though rent-controlled apartments are seen as something that will only benefit tenants, they're also meant to let landlords make reasonable income to keep their units in good shape.
Rent Control vs. Rent Stabilization
Even though they're similar terms, they have some differences. Overall, a rent-stabilized apartment will provide tenants with more protective measures than the ones on rent control.
A rent-stabilized tenant can enjoy several benefits, such as:
- The ability to receive particular services.
- The right to have their leases renewed.
- The right to not get evicted unless they meet one of the law's exceptions.
Regarding the leases, tenants with a rent-stabilized compartment can choose to renew the lease for one or two years. Tenants can also file complaints through the Division of Housing and Community Renewal.
If this institution notices that the landlord violated the tenant's rights in any way, the DHCR can impose civil penalties and reduce rent prices.
Rent control, on the other hand, refers to the limits that owners have when charging rental prices. However, these laws also restrict the owner's rights to evict tenants.
The main difference here is that landlords with rent-controlled apartments don't have to offer renewals for the lease. As with the previous term, the DHCR can impose penalties and reduce rental prices if it finds the tenant's rights were violated.
New York Rent Control
Yes. In fact, New York City has some of the oldest rent control laws in the country.
New York state's legislature is responsible for rent laws in New York City and other areas. The rental prices for rent-stabilized apartments are set by the NYC Rent Guidelines Board.
Now, there are two types of rent-regulated apartments that landlords should be aware of in New York state and New York City.
The first program, which is the older "rent control" one, only applies to 1% of the area's units. Moreover, it's being phased out since most tenants are either moving out of those apartments or dying.
Rent control measures are meant for units built before 1947, and they only apply to rent-controlled tenants who have been living in said units since July 1st, 1971.
As soon as the rent-controlled tenants move out, the apartment will change to be rent-stabilized, as long it's a building with over six units.
In this case, rent can only be raised to 7.5% every two years. Moreover, this rental increase can't be higher than the state's Maximum Base Rent.
Finally, a rent-controlled tenant can pass their unit to a family member when they die. This only applies if the family member was living in that unit for at least two years before the tenant's passing.
Rent stabilization works a bit differently. It applies to any apartment built before 1974 that has more than six units. Although this measure only applies to rent-stabilized apartments, new building owners can choose to impose rent stabilization in exchange for some tax benefits.
It's important to note that rent stabilization works slightly differently for New York City and any other cities within the state.
In New York City, you have a rent-stabilized apartment if your building was built between February 1st, 1947, and December 31st, 1973. It also applies if you had any tenants living in your building before February 1st, 1947, and moved in after June 30th, 1971.
On the other hand, rent-stabilized units outside New York City apply to the following:
- Buildings built before January 1st, 1974.
- Buildings with over six units.
- Buildings that haven't been transformed into a condominium or co-op.
In the case of rent-stabilized units, the maximum base rent will get set by the Rent Guidelines Board, which compares current real estate costs and the cost of living. The increases have been between 0% and 4.5% per year over the past decade, although this number can change.
Rent Regulation Laws
2019 came with considerable changes to New York City's rent laws. Before that year, if one of the following factors were met, the unit would stop being rent-stabilized:
- The unit got renovated.
- The landlord transformed the unit into a condo.
- The landlord took over the apartment.
- The tenant earned a particular income.
- The rental price reached a particular threshold.
Also, landlords were able to increase rent up to the current market rate when a tenant moved out. However, the Housing Stability and Tenant Protection Act of 2019 dealt with this and all of the other factors mentioned above.
Now, if the landlord wants to increase rental prices when the tenant vacates, they can only increase up to 20%.
The amount you can increase in rent may be confusing enough, so let's summarize everything we just learned and dive deeper into the specifics of rent-controlled and rent-stabilized apartments.
In NYC, the DHCR is responsible for establishing a maximum base rent every two years. Overall, landlords can increase the rent according to an average of the last five annual rent increases from the Rent Guidelines Board in the case of yearly renewals.
On the other hand, landlords can increase rent by 7.5% every year until they reach the maximum base rent, depending on which option involves less money.
Things work similarly outside NYC. Within the state, the DHCR is responsible for establishing a maximum rent price. The increase limits will depend on the average of the last five annual rent increases from the Rent Stabilized Guidelines Board.
Today, New York's Rent Guidelines Boards meet yearly to discuss rent increase rates. Overall, these boards will set a maximum rent increase for yearly and bi-yearly leases.
Keep in mind that there are some exceptions to rental increases for both rent-controlled and rent-stabilized buildings. These exceptions include the following scenarios:
- Individual Apartment Improvements
- Major Capital Improvements
- Senior Citizen Rent Increase Exemption
- Preferential Rent
- Disability Rent Increase Exemption
When To Raise Rent
It depends on the current status of the rent regulation system and whether the units are rent-controlled/stabilized or not.
In the case of units that don't have any rent stabilization or control guidelines, you could raise the rent for any reason and by any amount. The only thing you have to do is send a notice.
However, you can't increase rent for discriminatory or retaliatory reasons.
Now, rent-control landlords will have to submit an MBR Application if they want to increase rent. This application must be sent at the end of the term.
Property owners must demonstrate that they're providing the rent-control tenants with all of the necessary services, that they removed rent-impairing violations, and that they removed at least 80% of any other violations.
In the case of rent-stabilized units, landlords can only increase rent once the lease term ends, and they may only make the increase using the Rent Guidelines Board guidelines as a reference.
Typically, landlords within NYC must send a renewal form within 90-150 days before the lease ends. On the other hand, landlords outside NYC must send an ETPC Renewal Lease Form within 90-120 days before the lease ends.
In any case, tenants must respond to that form within 60 days.
It's important to note that landlords may be able to increase rent within the lease period if they included a clause in the agreement. However, they should meet the following:
- The landlord must make improvements to the unit.
- The tenant should have agreed to this clause in writing.
- The DHCR approved the increase because of a proven hardship or any big capital improvement.
Yes. The Federal Fair Housing Act prohibits owners from raising rent due to discriminatory or retaliatory reasons. More specifically, landlords can't base their rental increases on a person's:
- Sexual Orientation
- Familial Status
New York's Human Rights Law also prohibits landlords from discriminating against people based on their military status or if they were a victim of domestic violence.
We hope this page has helped you understand New York's rent increase laws clearly. As landlords, it's essential to understand the difference between rent control and stabilization, as that will give us an idea of how much we can increase rent and when we can do it.
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Does New York Still Have Rent Control?
Yes. There are several municipalities that still impose rent control policies, including Nassau, New York City, and more counties.
How Much Can You Raise Rent in New York?
It depends on the case. If the unit isn't rent-controlled or stabilized, then landlords can increase the rent as much as they want as long as they send a notice if the increase is by 5% or more.
The notice will vary depending on the leases:
- Yearly Leases - 30 days of notice
- Leases Between One and Two Years Old - 60 days of notice
- Leases Longer Than Two Years - 90 days of notice
However, if the tenant lives in a rent-controlled or stabilized unit, the landlord will have a cap on how much they can increase rent, and that cap depends on what the government sets each year.
Do You Need to Provide Notice Before Raising Rent?
Yes. Landlords must always provide notice before raising the rent.
How Many Times Can You Raise Rent in New York?
In regular units, landlords can increase the rent as many times as they want. Rent-controlled apartments may only have yearly rent increases, whereas rent-stabilized apartments can have either rent increases every year or every two years, which will depend on the type of lease the tenant chose.
What Are Fair Market Rent Appeals?
In essence, it's a resource that tenants can use to challenge the first-stabilized rent price of an apartment that was once rent-controlled.
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