Policy Minute: Rent Regulation Reform
State lawmakers are gearing up to take action on the state rent laws that are set to expire in June. New York Assembly Speaker Carl Heastie recently announced a package of bills aimed at strengthening rent regulation laws and increasing tenant protections. The package includes bills that aim to eliminate both vacancy decontrol and programs that permit rent increases due to major capital improvements and individual apartment improvements. An additional bill would require that rent increases imposed at lease renewal be based on the preferential rate which was charged to the tenant instead of the maximum legal regulated rent. Other bills in the wide-ranging legislative package address rent caps and offer additional potential protections.
The Assembly will hold public hearings on the proposals on May 2nd in New York City and May 9th in Albany.
As public debate continues to grow about rent regulation reform, this Policy Minute explores recent developments, discussion, and research.
During its first meeting of the year, The Rent Guidelines Board released a pair of studies on the expenses and affordability of the city’s rent-stabilized apartments. Read the 2019 Income and Expense Study and the 2019 Income and Affordability Study.
Albany lawmakers are going to be “laser-focused” on rent regulations in the coming weeks of the legislative sessions.
New York landlords push back on rent reform with new ad campaign. In anticipation of potential reforms, several real estate groups have launched a digital and television ad campaign to push back on proposals that would restrict landlords’ abilities to raise rents for tenants receiving preferential rents and upon vacancy.
By the Numbers
- Median gross rent in 2017 (2017$):
- All rent-stabilized units: $1,375
- All market-rate rental units: $1,830
- Number of rent-stabilized units that are one, 20 percent vacancy allowance away from decontrol threshold of $2,733 (rent greater than $2,277 and less than $2,733): 47,409 or a little over 5% of all rent stabilized units.
- The Rent Guidelines Board Price Index of Operating Cost increased 4.5% this year compared to the Consumer Price Index which rose by 1.8%. The RGB allowed increases last year were 1.5 percent for one-year leases and 2.5 percent for two year leases.
Sources: New York City Housing and Vacancy Survey microdata (2017), NYU Furman Center
Furman Center Research and Resources:
- In a recently-released working paper, Laboratories of Regulation: Understanding the Diversity of Rent Regulation Laws (forthcoming in the Fordham Urban Law Journal), Furman Center Faculty Directors Vicki Been (who recently announced a leave of absence) and Ingrid Gould Ellen and Furman Center Legal Fellow Sophia House review the implications of the choices that policymakers must make in enacting and implementing rent regulation. The authors highlight the variety of regimes that have been adopted in practice.
- Last fall, the NYU Furman Center hosted a series of rent regulation-focused Policy Breakfasts. At the State of Rent Stabilization in New York City, panelists examined the current state of rent stabilization programs, tenants, and the effect of regulated units on New York City neighborhoods. The second gathering on Reforming Rent Stabilization in New York City convened diverse experts to explore ideas for reforming the rent laws.
- On the interactive website Local Housing Solutions, NYU Furman Center and Abt Associates provide a primer on rent regulation policies for cities to consider when developing a comprehensive and balanced housing strategy.
- Furman Center Faculty Director Ingrid Gould Ellen and Senior Policy Fellow Mark Willis discuss the potential benefits and tradeoffs of rent regulation on the How Housing Matters blog.
Other Research and Reports:
- The New York City Rent Guidelines Board compiles an annual report on Changes to the Rent Stabilized Housing Stock in New York City.
- In his working paper Do Rent Increases Reduce the Housing Supply Under Rent Control? Evidence from Evictions in San Francisco, Brian J. Asquith presents his findings that under rent regulation, price pressures cause landlords to attempt to exit the market by “rule-breaking against either the spirit or letter of the law”.
- In The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco, Rebecca Diamond, Timothy McQuade, and Franklin Qian analyze a uniquely comprehensive data set and find mixed effects of rent regulation – an increase in tenure among some groups of tenants and a decrease for tenants in areas with quickly rising house prices.
- David P. Sims presents evidence of the effects of the end of rent control in Massachusetts on rent-controlled properties and also spillover effects on non-controlled properties in Out of Control: What Can We Learn from the End of Massachusetts Rent Control?
- In Rent Matters: What are the Impacts of Rent Stabilization Measures?, Manuel Pastor and colleagues review the current evidence on the effects of rent regulations using evidence from available literature.
- In Forty Years of Rent Control: Reexamining New Jersey’s Moderate Local Policies After the Great Recession, Joshua D. Ambrosius and colleagues conclude that the type moderate rent regulation found in many New Jersey cities has little effect on the housing market, but it potentially increases transparency between landlords and tenants and tenant security.
- In an opinion piece published by Crain’s, landlords argue that major capital improvement and individual apartment improvement incentive programs have enhanced the quality of the city’s affordable housing stock.
- On the Max and Murphy podcast, representatives from the Rent Stabilization Association, a landlord trade organization, and TenantsPAC, a tenant organization group, share differing priorities for rent reform.
- In Crain’s New York Business, housing advocates contend that landlords exploit loopholes and limited oversight in order to increase rents on thousands of regulated units.
- The Community Service Society of New York report, Rent Regulation in NYC: How it Works, What Went Wrong and How to Fix It, provides a detailed overview of rent regulation, describing how the system functions today, its evolution over time, and how it compares to other forms of rent control in the United States.
- On the heels of Oregon's landmark statewide rent regulation measure, lawmakers have introduced a bill to eliminate single family zoning as a strategy increase the affordable housing supply.
- As housing prices continue to rise in Boston, lawmakers grapple with the pros and cons of rent control.
- Lawmakers, advocates, and developers discuss whether or not rent control may return to Philadelphia.