Overreach In The New Tenant Protection Law In New York State
The new tenant protection laws just passed in the State Senate may unleash unintended consequences. No one could deny that New York needs more affordable housing, and that some of our historic laws allow landlords to free a hand in driving out less high-paying tenants in favor of those who can pay more. That said, the pendulum swing reflected in the recently passed laws effectively ending vacancy decontrol as well as the income cap on rent stabilized units goes too far. As is so often the case with legislation emerging reactively from either side of the aisle, the new ascendancy of Democrats in the State Senate has created a brush which paints with excessively broad strokes. What the city needs is the sort of public/private partnerships which can deliver low and middle-income housing in such a way that it benefits the government, developers, and tenants alike. We do not seem any closer to that than we were before.
I genuinely admire the tenant advocacy of Andrea Stewart-Cousins and her cohort in the Senate. However, the new laws seems designed to curb abuses which are more the exception than the rule. Ours is a city of small landlords, men and women who themselves, or whose parents or grandparents, bought a building or a couple of buildings as a source of security and steady income. For these owners the changed requirements can cause substantial hardship. Without the ability to raise rents to keep pace with increases in taxes and operating costs, or to pass on to tenants their investment in upgrading the apartments and the building infrastructure, many of these landlords will be forced to cease to invest and will face a gradual deterioration of their asset, as rents fail to cover additional expenses.
Another concern is that the new legislation coming from Albany, and the mindset behind it, will actually disincentivize development at precisely the moment when the city sorely needs new subsidized housing. This makes the rhetoric emerging from the State Senate particularly troubling. The “us vs them” attitude which scuttled the Amazon deal, proposed the cap on rental agent commissions, and makes Democratic candidates proudly announce that they will refuse to accept campaign contributions from real estate interests, seems misguided to me. (Of course, since I work in real estate, that may be self-evident!) The new housing the city needs will only get built if the real estate industry builds it. And to run the gauntlet of approvals which any building project in New York requires is not for the faint of heart! So why turn our developers into villains because they and their partners, the banks and investment houses, want to make a profit? Real estate professionals are not the enemy. The government and real estate need to work together to solve these problems.
Our city today needs practical rather than ideological thinking. Creating pathways for tenants in burgeoning neighborhoods to retain their homes makes sense, as does protecting those tenants from outsized and often unaffordable rent increases. What doesn’t make sense is to extend those protections to tenants in luxury rentals paying market rents, or to disincentivize owners from investing in their buildings. This legislation is a triumph of politics over productivity. There must be a better way.