Framework of extension deal includes rent regulation, 421-a. On June 23, 2015 Governor Andrew Cuomo, joined by Assembly Speaker Carl Heastie and Senate Majority Leader John Flanagan, announced the framework of a deal on extending rent-regulation protections for New York City. The laws expired on June 15, and the Legislature temporarily extended its session until June 23 to allow time for working on a longer-term solution.
The announced framework would extend existing rent-regulation laws by four years, with increases to vacancy decontrol, indexing, and major capital improvements. The 421-a tax abatement program, which expired at the same time as rent regulation, would be extended another six months from now. During this time, labor and development leaders are asked to cooperate on a prevailing wage deal. Failure to reach a wage deal would result in permanent expiration of the abatement.
The framework was announced prior to presenting the details to the rank-and-file of both the Assembly and Senate, and remains unofficial until both houses agree. The proposal differs from one the Senate introduced on June 20 which would have extended regulation protections by six years and immediately raised the vacancy decontrol cap by $100 to $2,600, with future increases tied to the Rent Guidelines Board’s annual decisions on cost of housing. Other conditions in the Senate proposal included new requirements for income verification among rent-regulated tenants and restrictions on using rent-regulated apartments for services like Airbnb. The Senate also sought to extend 421-a for six years.
Both proposals differed from one already introduced by the State Assembly. Under the Assembly plan, rent regulation would be extended for only two years, but vacancy decontrol would be eliminated entirely. The Assembly plan also contains no provisions for income verification or restrictions on Airbnb-style usage of a regulated unit, and is silent on an extension of 421-a.
On March 11, the New York City Council passed an extension of the City’s rent-stabilization laws, as well as a package of resolutions calling for reform of rent-increase policies of regulated apartments, a total repeal of vacancy decontrol, and more.
Two million New Yorkers currently live in rent-regulated housing. In the event a deal is not reached, the regulated units would remain governed by the terms of the existing lease agreements for the duration of the lease. When the lease expires, the landlord would be free to raise the rent to the current market rate. Construction projects that received permits from the City and began construction before the expiration of 421-a would be grandfathered in under the previous rules.
By: Michael Twomey (Michael is the CityLaw Fellow and a New York Law School graduate, Class of 2014).