United States: New York Passes Landmark Rent Reform Bill

On Friday afternoon, June 14, 2019, New York Gov. Andrew Cuomo signed into law Senate Bill S6458, also known as the “Housing Stability and Tenant Protection Act of 2019” (the new “Rent Regulations”), after the bill passed the Democratic-controlled Assembly and State Senate by votes of 95-42 and 36-24, respectively, one day before the existing rent regulations were set to expire. Thought by many to be indicative of a state and nationwide legislative focus on rent reform aimed at addressing what activists have deemed an “affordable housing crisis,” the landmark bill introduces major reform to New York State’s affordable housing laws in the form of sweeping tenant protections. Some of the more notable provisions are briefly summarized as follows:

(1) Extending the Rent Regulations: The Rent Regulations, which have historically expired every four to eight years tracing back to the Rent Stabilization Act of 1969, are now permanent and any modification would require formal legislative reform;

(2) Repealing High-Rent Vacancy Deregulation and High-Income Deregulation: Apartment units that had previously qualified, under the former legislation, for permanent deregulation as a result of (a) rent escalations reaching the statutory threshold ($2,775 per month in 2019) and (b) either being (i) vacated or (ii) occupied by a tenant that no longer qualifies as “low-income” ($200,000 taxable income for the prior two years), will no longer be subject to deregulation. It is worth noting that 300,000 rent-stabilized apartments have been deregulated since 1994;

(3) Eliminating the “vacancy bonus” and “longevity bonus”: Under the previous legislation, when an affordable unit was vacated, landlords were able to increase rents by up to 20% for that unit, plus an additional bonus tied to the length of the expiring lease. Under the new Rent Regulations, these bonuses are eliminated, limiting annual rent increases to the escalations approved by the Rent Guidelines Board (RGB);

(4) Making “preferential rents” the baseline for lease renewals: Landlords who offer tenants “preferential rent” below the statutory maximum in many cases are no longer permitted, when the lease is subject to renewal, to increase that rent to the statutory maximum. Instead, the “preferential” amount will now be treated as the new maximum until that unit is vacated, and annual escalations will be limited to those set by the RGB. More than 251,000 rent-stabilized apartments had previously benefitted from preferred rents as of 2017 based on the most recent data available;

(5) Reducing rent increases allowable in connection with Major Capital Improvements (MCIs): Rent increases afforded to landlords for MCIs approved within the past seven years (as early as June 16, 2012) and going forward will be subject to a statewide cap of 2%, down from 6% in New York City under the prior legislation, and those increases, which were permanent under the prior legislation, now expire after 30 years. Additionally, the scope of what constitutes an allowable MCI has been limited to work for essential building functions and other improvements (excluding maintenance) and the State’s Division of Housing and Community Renewal is required to audit and inspect a minimum of 25% of approved MCIs each year;

(6) Reducing rent increases allowable in connection with Individual Apartment Improvements (IAIs): Under the previous legislation, owners that make improvements to individual apartment units were able to raise rent by an amount tied to the costs of those IAIs. The new Rent Regulations limit the amount that landlords may spend on IAIs that qualify for rent increases, at $15,000 for no more than three IAIs over a 15-year period. Additionally, as with MCIs, IAI increases will no longer be permanent under the new legislation, expiring after 30 years; and

(7) Increasing the Condo and Co-Op Conversion Requirements: The Rent Regulations eliminate a sponsor’s ability to file an “eviction plan” (which had allowed non-purchasing tenants to be evicted in connection with a conversion under the existing laws), and require 51% of favorable votes from existing tenants in occupancy at the time of conversion in order to obtain approval of “non-eviction plans.” The prior legislation had only required 15% of favorable votes and counted both existing tenants and prospective non-tenant bona fide purchasers.

The new Rent Regulations are expected to affect approximately one million apartments in New York City, accounting for approximately 40% of the City’s rental inventory. Although the new Rent Regulations did not go as far as many tenant advocates had initially hoped, major industry stakeholders, including owners, operators, developers, and trade associations, have voiced immediate concerns, explaining that operating cost escalations exceed RGB rent increases and by eliminating their ability to deregulate apartments, convert them to condominium units, and use the sales proceeds to offset operating losses, owning and operating multifamily buildings will no longer be profitable, and that by reducing the cap on MCI increases, capital improvements will no longer be made, buildings will fall into disrepair, jobs will be lost, property values will decline, and tax revenue will be reduced. Additionally, concerns have been raised that the new Rent Regulations, which apply retroactively, will unjustly impact buyers and lenders that purchased and financed these buildings on the assumption that the apartment units could be deregulated. Accordingly, these stakeholders have committed to file suit quickly against the governor’s office and the state legislature to challenge the validity of several components of the new legislation, including the permanency of the Rent Regulations and the retroactivity of their application.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions