If New York's Rent Laws Really Lapse, What Then?

New York Times, June 11, 1997

ALBANY, June 8 -- For many tenants in rent-regulated apartments, it is the nightmare scenario: state leaders fail to agree on extending the rent laws when they expire next Sunday at midnight, and in the following months do not budge on the issue.

If rent rules are allowed to lapse, thousands of tenants -- no one is sure quite how many -- could be served right away with eviction notices or steep rent increases. Many renters in this group are elderly people living outside New York City.

But for the largest group of people affected, the occupants of 1 million rent-stabilized units in New York City and its suburbs, sudden, complete deregulation would have a delayed effect. In the city, the first batch of rent-stabilized apartments would not be deregulated until mid-October, and some would not be affected until October 1999.

For these newly deregulated apartments, landlords would be able to charge whatever the market would bear and would also not be required to offer leases to their renters. Without a lease, a landlord can evict a renter at a whim. For elderly, low-income tenants, deregulation would also make them ineligible for a government program that helps them pay their rents.

"If the system dies, we would be entering a very strange, confusing period," said Mitchell Posilkin, general counsel of the Rent Stabilization Association, the largest landlord group.

While it has been hard for many New Yorkers to imagine that the laws would be allowed to expire, with just a week left there is still a wide gap between the Democrats who want to preserve the laws and the Republicans who want to phase them out. Indeed, some Democratic legislators who want to continue the rules see abrupt deregulation and the panic it would cause as their best weapons against Republican lawmakers, including Gov. George E. Pataki, who plans to run for re-election next year.

Today, Republican leaders said their compromise plan had provided enough protections for most tenants. But top Democrats held a press conference to say said the Republican position of vacancy decontrol would jeopardize the housing of the middle class. But there was no sign of progress in resolving the fight.

Landlords' groups, aware that the fight is likely to go past June 15, are cautioning property owners not to do anything rash that would result in negative publicity. Joseph Strasburg, president of the Rent Stabilization Association, recently sent a letter to the group's members saying, "Our actions will be in the spotlight, and anything we do can hurt our chance to achieve a phase-out of rent regulation." New York's rent regulations are the product of not one law but a complex web of city and state laws.

People governed by the state rent control law, one of the ones due to expire on June 15, would be the first to be affected if no agreement is reached by the deadline. The law, enacted in 1950, applies to an estimated 20,000 renters in Westchester County, Nassau County and the Albany and Buffalo areas who live in buildings built before 1947 and whose families have lived in the same units since 1971.

Because these rent-controlled tenants, like those in New York City, do not have leases, there would be nothing protecting their status if the laws expired, so landlords in areas outside New York City would be free to raise tenants' rents or give them eviction notices on June 16. In theory, court eviction orders could be issued as early as Aug. 1.

But landlords say the fear of such swift action is misplaced, if only because apartment owners understand the political sensitivity of the issue. It is particularly unlikely, they say, that property owners would evict elderly renters with the outcome of the dispute still in doubt.

Rent-stabilized tenants in New York City and the suburbs who do not have leases, either because of disagreements with landlords or by mutual agreement with landlords, could also be subject to immediate eviction notices or rent increases. But again, no one knows how large this group is. Michael McKee, rent law campaign manager of the New York State Tenants and Neighbors Coalition, the state's largest renters' group, said renters without leases make up 5 percent of the total market, or 50,000 apartments, while Mr. Posilkin said such situations are very rare.

The 70,000 rent-controlled apartments in New York City come under the city's own rent-control law and are not affected by what happens in Albany.

Rent-controlled tenants generally pay lower rents than their rent-stabilized neighbors, but the gap has narrowed over the last two decades as landlords have been allowed larger annual increases for rent-controlled units.

The main law that is about to expire is a 1974 state law called the Emergency Tenant Protection Act, which governs about 1 million rent-stabilized units in New York City, and 60,000 in Nassau, Westchester and Rockland Counties.

In New York City, landlords are required to offer rent-stabilized tenants renewal leases at least 120 days before the expiration of their current leases. According to both tenant groups and the Rent Stabilization Association, landlords must continue to offer the option of one- or two-year lease renewals right up to June 15, even if the renewal would not take effect until well after the current law expired.

"What we are telling our members," Mr. Posilkin said, "is that they have to abide by the law as it is right now and that means send the renewal notices right now."

In other words, any rent-stabilized tenant whose lease runs out on or before Oct. 13 has a legal right to a new lease, and can choose a two-year lease that would run through 1999. But if the current lease runs out on Oct. 14 or later, the landlord does not have to send a lease renewal if the laws expire, and the apartment would be deregulated at the end of the lease. After that, apartments would be deregulated at the rate of about 40,000 a month, until the final batch went to market rates in October 1999.

But tenant advocates say some landlords have been ignoring laws requiring them to offer lease renewals.

"You've got landlords who have refused to offer renewal leases, banking on the possibility that the law is going to end," said Andrew Scherer, a housing lawyer with Legal Services. "A lot of people will not know their rights, so they will just end up moving."

A state program, the Senior Citizens Rent Increase Exemption, or Scrie, helps 55,000 elderly people in rent-regulated housing pay their rent if they earn under $20,000 a year, and if one-third or more of their income goes toward paying rent. "The law says that rent-stabilized housing is subject to Scrie," Mr. Scherer said. "When that housing is no longer rent-stabilized, those renters are no longer eligible for Scrie."

New York City has its own rent-stabilization law, and the people it applies to would not be affected by expiration of the state law. But there is some disagreement as to how many renters that is. The city law, enacted in 1969, originally limited rent increases on more than 300,000 apartments built from 1947 to 1968.

Among housing experts, the conventional wisdom is that the city rent stabilization law applies only to those units that have not changed hands since 1971, about 40,000 units. Those that turned over, they say, come under the 1974 state law and are subject to deregulation.

But some housing lawyers say that if the state law expires, the city law would still apply to nearly all of the original 300,000 units. "There are going to be a lot of lawsuits over this as landlords try to deregulate apartments, and tenants try to establish that they're still under the city law," Mr. McKee of the tenants coalition said.