How does a building/tenant qualify for rent stabilization in New York City?
July 19, 2010 8:56 AM Subscribe
Where can I find an easy-to-understand guide to rent stabilization in New York City? I want to know exactly what criteria a building and a tenant of that building must meet to qualify for rent stabilization. (No, the Wikipedia article on the subject didn't fully answer my questions.)
I was shocked to discover that my recently gut-renovated building is rent-stabilized. The building was built before 1947 and was vacant from 1993 until 2009. The apartments rent for under $2,000, but I still don't understand why they qualify for rent stabilization, since the building was completely renovated last year. My assumption is that because it's a prewar building, the management company could charge market rates for rent after renovation, but future rent increases are capped at 3% a year?
I was shocked to discover that my recently gut-renovated building is rent-stabilized. The building was built before 1947 and was vacant from 1993 until 2009. The apartments rent for under $2,000, but I still don't understand why they qualify for rent stabilization, since the building was completely renovated last year. My assumption is that because it's a prewar building, the management company could charge market rates for rent after renovation, but future rent increases are capped at 3% a year?
The rent-regulated status of an apartment is particular to that apartment. In other words, a general treatise about rent stabilization in NYC will not help you to understand why your apartment, or your building in particular is rent stabilized, although it might give you a general idea of why apartments in general might be rent stabilized. For your more specific question, you would have to go to DHCR and request a copy of the rent registration history for your apartment, which you can do pretty easily. Note however, that you will only get a copy of the registration related to your apartment. Take picture ID with you.
That having been said, I haven't really run into that many general, layperson's guides about rent regulation. There is "Residential Landlord-Tenant Law in New York," by Andrew Scherer, which is considered something of the authority on L&T law by those of us who practice it on behalf of tenants. However, it is at base a legal treatise. DHCR has fact sheets which you may find useful. Tenant.net can also be useful. One of the best aggregation of links and resources for tenants and their advocates was created and is maintained by Stuart Lawrence, an attorney at Housing Conservation Coordinators and is housed at the HCC website.
Finally, I'm curious -- both you and JPD seem to be implying that rent stabilization is a status that confers a benefit of some kind on your landlord. Why do you think that? The Rent Stabilization Law was enacted primarily to protect tenants from skyrocketing NYC rental prices by limiting the size of yearly increases in the rent of rent stabilized apartments. I can't actually think of a benefit that landlords receive from rent stabilization -- are you thinking about J-51 and other kinds of tax credits which do provide tangible benefits to landlords?
posted by lassie at 3:05 PM on July 19, 2010
That having been said, I haven't really run into that many general, layperson's guides about rent regulation. There is "Residential Landlord-Tenant Law in New York," by Andrew Scherer, which is considered something of the authority on L&T law by those of us who practice it on behalf of tenants. However, it is at base a legal treatise. DHCR has fact sheets which you may find useful. Tenant.net can also be useful. One of the best aggregation of links and resources for tenants and their advocates was created and is maintained by Stuart Lawrence, an attorney at Housing Conservation Coordinators and is housed at the HCC website.
Finally, I'm curious -- both you and JPD seem to be implying that rent stabilization is a status that confers a benefit of some kind on your landlord. Why do you think that? The Rent Stabilization Law was enacted primarily to protect tenants from skyrocketing NYC rental prices by limiting the size of yearly increases in the rent of rent stabilized apartments. I can't actually think of a benefit that landlords receive from rent stabilization -- are you thinking about J-51 and other kinds of tax credits which do provide tangible benefits to landlords?
posted by lassie at 3:05 PM on July 19, 2010
Yes lassie, I think they're explaining how an apartment comes to be rent stabilized; in general, for construction after WW2, the only way is as a trade-off for a tax credit. So, when the building was renovated, then it might have become stabilized at least until its J-51 tax credit expires.
However, if the apartment was stabilized when vacated in 1993, and 1/40th of the cost of the renovation done to the apartment (plus 1/84th of its share of the renovation of the shared areas of the building, based on its number of rooms) wouldn't increase over $2000 whatever rent the next tenant would have paid in 1993, then so far as I know it would still be stabilized.
zembla, you should call 311 and ask.
posted by nicwolff at 5:26 PM on July 19, 2010
However, if the apartment was stabilized when vacated in 1993, and 1/40th of the cost of the renovation done to the apartment (plus 1/84th of its share of the renovation of the shared areas of the building, based on its number of rooms) wouldn't increase over $2000 whatever rent the next tenant would have paid in 1993, then so far as I know it would still be stabilized.
zembla, you should call 311 and ask.
posted by nicwolff at 5:26 PM on July 19, 2010
JPD seem to be implying that rent stabilization is a status that confers a benefit of some kind on your landlord.
Well not exactly - that part of the reason why a place can be rent stabilized is in exchange for a tax credit. I made no judgment as to whether a rent stabilized apartment was a better deal for landlords. (Although given your tone I would assume you seem to think they represent a massive deadweight loss to the landlord, and I would bet you that isn't the case given long-term returns on residential real estate in NYC are essentially equal to the CPI - as are the permitted rent increases)
posted by JPD at 6:11 PM on July 19, 2010
Well not exactly - that part of the reason why a place can be rent stabilized is in exchange for a tax credit. I made no judgment as to whether a rent stabilized apartment was a better deal for landlords. (Although given your tone I would assume you seem to think they represent a massive deadweight loss to the landlord, and I would bet you that isn't the case given long-term returns on residential real estate in NYC are essentially equal to the CPI - as are the permitted rent increases)
posted by JPD at 6:11 PM on July 19, 2010
JPD, I don't know what you read in my tone, but I don't think RS is a massive deadweight loss to landlords -- in fact, I don't think of rent regulation in those terms at all. I am a tenant lawyer after all, and my organization represented one of the plaintiffs in Casado v. Markus, the challenge to the recent RGB increases. I was sincerely curious about what I thought you and the OP were saying about the benefits to landlords of their buildings being subject to the RSL.
nicwolff, I agree with your point about Major Capital Increases and Individual Apartment increases not necessarily taking the OP's apartment out of rent stabilization, but do you have a source for your statement "in general, for construction after WW2, the only way is as a trade-off for a tax credit"? My understanding of Rent Stabilization is that it generally applies to buildings built before 1974, with six or more apartments, where rents do not exceed $2000. If property owners were getting tax breaks in exchange for their buildings being subject to the Rent Stabilization Law, this is the first I'm hearing of it and I'd be genuinely interested in learning more. Mind you, I'm not talking about the Tishman-Speyer J-51 situation -- just your garden variety rent stabilized apartment.
posted by lassie at 9:57 PM on July 19, 2010
nicwolff, I agree with your point about Major Capital Increases and Individual Apartment increases not necessarily taking the OP's apartment out of rent stabilization, but do you have a source for your statement "in general, for construction after WW2, the only way is as a trade-off for a tax credit"? My understanding of Rent Stabilization is that it generally applies to buildings built before 1974, with six or more apartments, where rents do not exceed $2000. If property owners were getting tax breaks in exchange for their buildings being subject to the Rent Stabilization Law, this is the first I'm hearing of it and I'd be genuinely interested in learning more. Mind you, I'm not talking about the Tishman-Speyer J-51 situation -- just your garden variety rent stabilized apartment.
posted by lassie at 9:57 PM on July 19, 2010
My apologies then. Guess I'm too used to the real estate blogs and their constant "RS=Evil" & "NYC RE= best investment evar!!!" component.
That and I'm apartment hunting at the moment which as always make me weep for humanity.
posted by JPD at 4:12 AM on July 20, 2010
That and I'm apartment hunting at the moment which as always make me weep for humanity.
posted by JPD at 4:12 AM on July 20, 2010
I have no source for the WW2 date because I'm totally wrong! I was presumably thinking of rent control; rent stabilization affects units built after WW2 until 1974, just as you say.
But regarding renovations and new constructions getting tax abatements in return for temporary stabilization, this is from the RGB site (and is the first Google result for "j-51 rent stabilization"):
Note that the "correct procedure" includes an accurate and prominent notification of the J-51 expiration date in every renewal lease, and it's not on the standard form — an excellent reason for your clients to keep those old leases!
Note: IANAL, just a stabilized tenant and the child of managing agents. I may be your client someday!
posted by nicwolff at 1:02 PM on July 20, 2010
But regarding renovations and new constructions getting tax abatements in return for temporary stabilization, this is from the RGB site (and is the first Google result for "j-51 rent stabilization"):
If a new building is constructed or an old building is fully rehabilitated the owner can receive an abatement/exemption from real estate taxes for a prescribed period from the City. In return for this tax benefit, the building is placed under rent stabilization. After the benefits expire, rent stabilization coverage may expire IF the landlord follows the correct procedure.So far as I know there's nothing exceptional about the Stuy Town situation — Tishman was still taking the abatement, so the apartments were not deregulated and the rents should not have been raised.
Note that the "correct procedure" includes an accurate and prominent notification of the J-51 expiration date in every renewal lease, and it's not on the standard form — an excellent reason for your clients to keep those old leases!
Note: IANAL, just a stabilized tenant and the child of managing agents. I may be your client someday!
posted by nicwolff at 1:02 PM on July 20, 2010
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posted by JPD at 9:07 AM on July 19, 2010