Rent Control Law Challenged
Home and building ownership in New York City is so expensive that a large majority of New York City residents rely on rental properties such as apartments, condominiums, and flats for affordable housing. Recent changes to rent stabilization laws by New York City lawmakers have sparked outrage by many landlords who claim the laws are unconstitutional.
The New York Rent Stabilization Association and the Community Housing Improvement Program have filed a lawsuit against the city claiming that the new rent stabilization laws violate the Takings Clause in the Fifth Amendment of the United States Constitution. The amendment prohibits the government from controlling private property without providing proprietors with compensation. The two advocacy groups represent over 30,000 property owners in New York City who argue the state’s power will limit their profits and control over what they can do with their property.
Rent Control vs. Rent Stabilization
Rent control laws were enacted in New York City following the end of World War II to stabilize the number of drastic rent increases that were occurring at the same time new construction of rental properties were declining. Rent control laws have been slowly phased out by rent stabilization laws enacted in the early 1970s. There are very few rent-controlled properties still in existence in New York City. To qualify for rent control, the building must have been constructed before 1947 and the tenant must have continuously lived in the rental unit since July 1971. In some cases, family members who continue to live in the rental unit after the initial tenant has moved on will continue to be protected by rent control laws.
As tenants in rent-controlled buildings died or moved out of the units, new rent stabilization laws took over. Some buildings were removed from regulation entirely if they had three or less rental units. The phase out of rent-controlled units was limiting the number of affordable housing units available in the city, which left many with no choice but to move to higher rent districts or move out of the city altogether.
How the New Rent Stabilization Laws Affect Rental Properties
The rental increases on a rent-stabilized unit are controlled by the New York Rent Guidelines Board. In the current real estate rental market in New York City, approximately two percent of rental properties remain rent-controlled units, while 50 percent are rent-stabilized.
Rent stabilization laws apply to rental properties that were built between 1947 and 1974, have six or more rental units, or have three or more units that were constructed or renovated since 1974. The new regulations within the rent stabilization laws will limit landlords from paying for building maintenance and renovations with high increases in rental fees. The law also raises the number of purchase agreements required to convert a rental property into condominiums from 15 percent to 51 percent.
Opponents to the new laws claim that their profit margins and building control are limited by the governmental mandates. New York lawmakers argue that the regulations still allow for ample profit margins and that the new laws will protect the legal rights of New York City’s low income residents.
Brooklyn Civil Litigation Lawyers at Korsinsky & Klein, LLP Advocate for Affordable Housing
If you are in need of a civil litigation attorney, call the Brooklyn civil litigation lawyers at Korsinsky & Klein, LLP at 212-495-8133, or contact us online to schedule a consultation today. Our Brooklyn, New York and Lakewood, New Jersey offices serve clients throughout Manhattan, Long Island, and Westchester, New York.