Navigating the Tradeoffs of Good Cause Eviction

As lawmakers in Albany debate how to fix New York’s housing affordability crisis, a new research brief by the NYU Furman Center examines the possible effects of how a good cause eviction requirement might affect tenants, landlords, and the housing market. The paper also analyzes good cause legislation in other cities and states to help policymakers consider how to balance anticipated tradeoffs.  

In 2023, Albany lawmakers failed to pass any significant legislation that could have addressed the city’s affordability problems, with a good cause bill at the center of the legislative stalemate. While some elected officials expressed some support of “good cause” in principle, the absence of a concrete proposal left the debate unresolved. Now, the issue is once again on the negotiating table in 2024.

The good cause debate comes as New York City is experiencing its lowest vacancy rate in more than fifty years, and 34 percent of tenants are severely rent-burdened, meaning they spend at least half of their annual income on rent. Protecting the stability of vulnerable low-income tenants, without imposing inordinate costs and risks on the development and operation of rental housing, is both extremely difficult and absolutely critical.

In principle, good cause policies are intended to enhance tenant stability by limiting evictions, outlawing unexpectedly large rent increases, and requiring landlords to provide a reason to the courts when they decline to renew a lease. Such legislation seeks to address vital policy priorities: research shows that promoting housing stability and preventing evictions avoids enormous harms. Evictions are associated with poor health outcomes, future housing instability, a decrease in future earnings, and a range of other serious negative consequences. 

Still, a good cause requirement brings potential risks that policymakers in Albany must consider, writes the Furman Center in the new paper Balancing Act: Navigating the Tradeoffs of Good Cause Eviction. It could potentially discourage investment in housing, raise costs for all tenants, and make it even harder for tenants to find a suitable home.

For example, a good cause requirement might lead landlords to screen potential tenants more strictly, meaning tenants with spotty rental records or low or variable incomes may find it harder to secure homes. Additionally, if potential developers find that a good cause eviction requirement makes it more costly to operate housing, they may choose to build for other uses, further suppressing housing supply. 

The good cause proposal would also add responsibilities to New York’s housing court, making eviction proceedings slower and more expensive. Because landlords factor eviction costs into the operating budgets for their buildings, those costs risk being passed on to all tenants.  

"Given the potential benefits and risks of a good cause requirement, New York State policymakers must consider both how best to strike an efficient and fair balance between those tradeoffs if they choose to impose a good cause requirement, and whether there are other tools to secure greater tenant stability that impose fewer risks and potential costs than a good cause requirement,” the authors write. 

The paper compares the 2023 good cause bill proposed in New York to legislation in cities like Washington, DC, Seattle, and Berkeley, California that have had good cause eviction ordinances for decades, and to states like Oregon and California that adopted statutes in the last few years.

Unlike New York’s proposed legislation, other jurisdictions exempt more small buildings, which operate on fine margins and have the lowest eviction filing rates. While New York’s proposed good cause legislation aims to cap rent increases at around 4 percent, significantly impacting many lease renewals, other jurisdictions target aggressive gouging, capping rent increases at closer to 9 or 10 percent. 

These are just some of the considerations that might help policymakers in New York State fairly balance the benefits and risks of a good cause requirement.

The paper also suggests a variety of additional policies that could promote housing stability. Policymakers should consider exploring some of the following programs as they seek to both secure the benefits of greater housing stability and minimize risk to an already troubled rental housing market, the authors write. 

1. Providing direct financial aid to tenants, through vouchers and cash assistance. Research shows that evictions are most often caused not by rent increases, but by sudden shocks such as job losses or health crises. Therefore, offering housing subsidies that can be unlocked in financial emergencies—or by families especially vulnerable to these shocks—may be the most efficient way to prevent evictions. New York already has a voucher program, but lawmakers should investigate how much more funding for vouchers would be required to actually lower the eviction rate. Households also could be given direct cash assistance or a renter’s tax credit. 
2. Funding right to counsel programs. New York City has made tremendous strides in providing tenants facing eviction with legal counsel, but programs designed to make Housing Court run smoothly and equitably remain underfunded. Devoting more resources to right to counsel programs could help prevent evictions.
3. Restructuring the way tenants pay rent. Some tenants may be able to avoid nonpayment evictions if they are allowed to pay the rent on the schedule by which they receive their income, rather than a rigid date set uniformly for all tenants. Others may be helped if they are allowed to make partial payments throughout the month.
4. Funding mediators to help solve landlord-tenant disputes without getting courts involved. Easy-to-use systems to get help for a tenant, and sufficient funding to ensure that help is consistent and effective, may be a more lasting and cost effective way of avoiding holdover eviction filings or nonrenewals than good cause requirements. 
5. Passing anti-gouging measures to limit super-high rent increases. As mentioned above, other states like Oregon and California have introduced anti-gouging clauses to limit rent increases above 10 percent. This can protect against the sharpest rent increases without disrupting too much of the market. 
6. Mandating better data collection through rental registries. Much of the dispute around good cause comes down to competing assumptions about how rents are changing. Improving data about rent increases, therefore, is crucial. Various jurisdictions are experimenting with rental registries to help provide the data needed to develop effective housing policies. New York should consider a similar registry for all rental housing in the state. 

Elected officials who endorse the principle of good cause with goals of reducing housing instability and evictions will need to think carefully about how to craft a protection that helps vulnerable tenants without adversely affecting the interests of other tenants, owners, and all those New Yorkers who need a more reliable supply of affordable, high quality housing.

"Striking the balance between protecting housing stability and minimizing the risks those protections will likely entail will be challenging,” the authors write.