Ways to Lose Your Rent-Stabilized Apartment

Mayor Bill de Blasio set an ambitious affordable housing agenda, promising the city he would build or preserve 200,000 units of affordable housing over the next decade. The administration has made clear that a majority of those units will come from preserving the affordable stock that already exists, around 1 million rent-stabilized apartments.

But each year, some of those units convert to market-rate apartments. According to a report from the New York City Rent Guidelines Board, last year the city lost 7,597 rent-stabilized units.

While that number was lower than the number of apartments lost in 2012 — and there was actually an overall net gain in affordable units — the mayor has said that every unit of affordable housing must count.

Rent-stabilized apartments can become market rate in a variety of ways. Most typically this happens when the rent rises above $2,500 a month. At that point, if a tenant leaves or the combined household income is greater than $200,000 per year for two consecutive years, the unit can become deregulated and is no longer rent stabilized.

Getting to that $2,500 threshold can happen in different ways:

  • In any given year, most rent-stabilized units only see small yearly increases in rent that have to be approved by the Rent Guidelines Board. This year, the board approved a 1 percent increase for one-year leases and 2.75 percent for two-year leases.
  • Landlords can also try to increase rents by making one of 31 major capital improvements to buildings and then passing on a portion of those costs to tenants. These include: air conditioning improvements, aluminum siding, bathroom modernization, boiler and burner installation, elevator upgrades, new doors, chimneys or catwalks, rewiring or a new roof, to name a few.
  • Property owners can also make major renovations to individual apartments and then pass on some of those costs to tenants.

"Bear in mind that a majority of rent-stabilized buildings are over 75 years old and in need of improvement," said Jack Freund, vice president of the Rent Stabilization Association, a group that represents landlords.

The most common way that rents rise sharply for stabilized units is when people move, according to a report from comptroller Scott Stringer's office. Under a state law passed in 1997, vacancy deregulation allows landlords to increase rents by 20 percent when tenants move on, plus they may add on increases for improvements. According to the report from the Rent Guidelines Board, 4,801 rent-stabilized apartments fell out of the system in 2013 when this occurred.

Housing advocates accuse some property owners of harassing tenants so that they will leave. This would allow landlords to charge that 20 percent rent increase, combine it with increases from renovations, and then push rents above the $2,500 threshold so the unit can be removed from the rent regulation system. Advocates are pressuring the state to eliminate the threshold and keep units permanently affordable.

"We know that without having that number . . .  a lot of the harassment we see could be diminished quite significantly," said Katie Goldstein, executive director of Tenants and Neighbors, a renter's rights group.

According to data from New York State Homes and Community Renewal, of more than 2 million rent-stabilized tenants in the state, just 7,423 tenant complaints were filed in fiscal year 2012-2013, 91 fewer complaints than were filed the year before. 

The New York State Department of Homes and Community Renewal, through Gov. Andrew Cuomo, has created a tenant protection unit that takes actions against suspect landlords. Deputy Commissioner Richard White said the protection unit does not tally complaints, but has recaptured more than 30,000 rent-stabilized apartments. 

The Rent Stabilization Association, along with another property owner's rights group and individual landlords, have filed a lawsuit against the creation of the special unit. That complaint is still pending.