Bills to Bolster NY’s Rent Stabilization Law Head To Governor’s Desk

Bills aimed at helping rent stabilized tenants dig deeper into their rent histories to challenge suspicious increases sailed through the State Assembly, capping off an anticlimactic year for housing policy in Albany. One bill also amends rent regulation rules, limiting how much landlords can charge when they combine, or “frankenstein” apartments.

A duo of bills aimed at helping rent stabilized tenants dig deeper into their rent histories to challenge suspicious increases sailed through the State Assembly Tuesday night, and are now headed to Gov. Kathy Hochul even as landlords predict legal challenges.

Capping off an anticlimactic year for housing policy—a deal to boost construction and extend eviction defenses in unregulated apartments died on the vine—the legislation is welcome to tenant advocates. One bill also amends rent regulation rules, limiting how much landlords can charge when they combine, or “frankenstein” apartments.

The End Apartment Warehousing Coalition, made up of tenant groups from across the city, says the practice is more common in wealthy and gentrifying areas, and recently documented a handful of examples in neighborhoods including the Upper West Side.*

Assembly Housing Committee Chair Linda Rosenthal of Manhattan celebrated Wednesday morning, urging the governor to swiftly sign both bills, which passed the Senate on June 9.

“In a year where housing was supposed to be at the forefront, at least we passed some legislation that is protective of rent regulation, and [says] tenants can be secure in their homes knowing that there can’t be certain shenanigans or there will be repercussions,” she told City Limits. 

Sue Susman, a member of the Central Park Gardens Tenants’ Association on the Upper West Side, said Wednesday that she is thrilled about the apartment combination measure in particular, predicting it will “help to get many rent stabilized apartments back on the market and keep affordable those that are combined.” 

There are roughly 1 million rent stabilized apartments in New York City. Since the 1970s, tenants in these units have enjoyed limited annual rent adjustments and have generally had the right to a lease renewal, helping them organize for building repairs with less risk of eviction. 

Rosenthal is sponsor, along with Senate Housing Committee Chair Brian Kavanagh, of the lengthier of the two measures voted on Tuesday, which passed the Assembly by a vote of 88-55. In addition to targeting apartment combinations, it locks in a broad definition of landlord fraud in the context of rent overcharge cases

Recent state appeals court decisions have opted for a narrow definition of fraud, the presence of which can help tenants peer further back in their state-maintained rent records to make the case that their rent was improperly increased and should roll back. 

Prior to the passage of the Housing Stability and Tenant Protection Act (HSTPA) in 2019—which eliminated many avenues for landlords to increase rents in stabilized apartments—the lookback window was four years before a fraud exemption became necessary. 

However, Part F of the HSTPA expanded that window to six years with the cushion that courts could further consider all rent history “reasonably necessary” to determine the legal rent. 

Yet Part F took a hit the following year. In a case called Regina, the New York Court of Appeals found that if a tenant wanted to determine if they had been overcharged prior to the passage of the HSTPA, they had to use the old method. According to the decision, retroactively holding landlords liable for past actions violated their due process. 

The second bill to pass the Assembly Wednesday, sponsored by Kavanagh and Assemblymember Jeffrey Dinowitz, aims to help tenants use Part F to determine what their rents should be post-HSTPA without disturbing Regina’s finding on overcharge claims predating mid-2019. It passed with a vote of 91-52. 

Landlords and their attorneys are livid about the measure, saying it violates their due process and would make it impossible for property owners to set expectations for their rent rolls going forward, while setting tenant-side firms up to win hefty attorneys fees. 

“What the legislature is doing now is completely undermining what the state’s highest court has said,” Zachary Rothken of Rosenberg & Estis PC, one of the law firms that represented landlords in Regina, told City Limits Wednesday. “I would expect that there will be a lot of litigation on this.” 

Jay Martin, executive director of the Community Housing Improvement Program, a landlord trade group, urged a veto of both bills, stating Tuesday that they were “passed by lawmakers who don’t know what the bills do.” 

“They are clearly an attempt to roll back Appeals Court decisions and will have a devastating effect on the financial stability of New York housing if they are allowed to become law,” Martin continued. 

Supporters of the legislation, however, argue the bill doesn’t conflict with the Regina ruling and merely helps tenants establish legal rents going forward. 

“Prospective relief is about rent-setting, and Regina was not about that,” said Ellen Davidson of the Legal Aid Society, which consulted on both bills. “The landlords seem to take the position that if [they] get away with illegally increasing rents, that any attempt to bring rents in line with the law is retroactive and therefore not allowed.” 

Reached for comment Wednesday, the governor’s office did not say whether she plans to sign both bills. “The Governor will review the legislation,” spokesperson Justin Henry said. 

In the meantime, the statewide tenant coalition Housing Justice for All is celebrating what they see as measures that will help the HSTPA function as intended. 

They couple it with another bill now headed to Hochul’s desk, sponsored by Hudson Valley Senator Michelle Hinchey, which would standardize the process for housing vacancy studies—a prerequisite for cities across the state to opt into rent stabilization. 

Prior to the passage of the HSTPA, only New York City and certain nearby downstate counties could participate in rent stabilization. But the 2019 law expanded the choice statewide. The City of Kingston became the first to join up, last year, though landlords are challenging the move in court.

Cea Weaver, campaign coordinator for Housing Justice for All, said her coalition plans to run local rent stabilization opt-in campaigns, ideally bolstered by Hinchey’s bill. But she added that steps to strengthen protections for rent stabilized tenants further highlight the plight of renters who lack defenses against eviction or steep rent increases. 

“Rent stabilized tenants are more seen as a political class you have to respond to,” she said. 

The good cause eviction proposal that floundered this year would have given unregulated tenants a new defense against eviction so long as they did not engage in illegal or nuisance behavior. It also would have allowed tenants to challenge rent increases above a certain threshold. 

“The stronger rent stabilization is, the more pressure the real estate industry is going to put on unregulated folks because that’s where they can squeeze the market,” Weaver said. “It underscores the urgent need for good cause.”