The New York State government introduced rent regulation to ensure average New Yorkers aren’t squeezed out of the rental market. What does this real estate policy mean for you?
What is Rent Regulation?
Rent regulation is a series of laws which control the number of rental prices can increase each year. It looks to protect average tenants by ensuring that rental prices never exceed what the tenants can afford.
Rent Control vs. Rent Stabilization
New York City has two forms of rent regulation: rent control and rent stabilization. Rent control typically applies to buildings constructed before February 1947, while rent stabilization covers buildings built after February 1957 and before 1974, as well as buildings containing at least six units removed from rent control.
A building is removed from rent control if the same family has not occupied it since 1971. A rent-controlled apartment can be passed down to another family member, but only if he or she has lived in the building for two years before the last tenant left or passed away. Given the age and long-term family dwelling requirements of the rent control plan, less than two percent of New York apartments are rent controlled.
Rent stabilization is much more common, with research suggesting these apartments make up 45 percent of New York rental properties. Landlords can only increase the rent on a rent-stabilized apartment by a small amount. For the year 2013 to 2014, this was capped at three percent. Once the monthly rent reaches $2,500, or the tenant’s income exceeds $200,000, the apartment can be deregulated and brought up to market rates. Rent stabilization is also known as the Emergency Tenant Protection Act or ETPA.
How It Work for Tenants
The most obvious way that rent stabilization can benefit tenants is by keeping rents low. New York City has the third highest cost of living in the country, after Honolulu and Washington D.C., so affordable housing is a vital issue.
People leasing rent-stabilized apartments in Manhattan, New York’s most expensive borough, typically pay around $1,200 less a month than other local tenants.
Rent regulation also protects tenants from eviction. It’s not impossible for landlords to evict problem tenants, but the process is so complicated that most tenants stay put for as long as they like.
Rent-regulated apartments also have a clear grievance procedure which benefits the tenants. Rent control boards air grievances against landlords, so they can’t get away with shoddy repairs, noisy environments, and other problems.
How to Find a Rent-Regulated Apartment
Because rent-regulated apartments offer low rental rates and cushy conditions for tenants, they have a low turnover rate. They are rarely advertised, as landlords can easily rent them to the family members or friends of vacating tenants. It pays to keep your ears to the ground or use the services of a well-networked broker to find one. Large, modern apartments are the most popular, so you’re likely to have better luck if you think small and search for one-bedroom or studio apartments in older complexes.
Rent-regulated apartments aren’t for everyone, but if you’re planning on staying in the city for the long-term, they can save you plenty on your monthly lease.