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What’s Next for the Housing Market for Regular New Yorkers?
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The New York State Senate and Assembly yesterday announced a historic bill that will close the major rent increase loopholes that drove the loss of affordable rent-regulated housing.
So, how will the housing market change for regular New Yorkers when the new laws go into effect? We think it will get a lot better for everyone, except real estate speculators. Here’s why.
Rent regulated apartment buildings used to be a slow, steady investment and that was good for tenants. If you were a landlord or an investor and you knew that you could only get the modest rent increases approved by the City every year, you would only buy or sell a building for a price that allowed you to make a decent profit while the rents remained steady. For a good building owner, it was a safe, modest, but yet still profitable approach to building investment.
Over the past 20 years, the loopholes in the rent regulation system invited in a very different set of speculative landlords and investors who drove out tenants to drive up rents in an effort to make quick and exorbitant returns on investments. The loopholes and the speculators they invited into our communities have systematically undermined the purpose of rent regulation: to balance landlord and tenant power, and to provide housing stability to every day New Yorkers.
We believe the bill introduced in the State Legislature yesterday will restore a functioning rent regulation system.
The landlord lobby claims the sky is falling, but the data shows this proposed legislation is sound policy. The truth of the matter is, city data shows that landlord profit rates can come down significantly WHILE STILL REMAINING PROFITABLE.
By closing the rent law loopholes, the State Legislature will make rent regulation more effective than it has been in decades and create a real estate market that responds to the needs of renters across income levels. Strong rent laws also help keep people at work – as research shows, renters who lost their home are 11 to 22% more likely to lose their jobs. The Legislature’s commitment to tenants is good news for all New Yorkers who care about affordable housing and a strong statewide economy. We urge the Governor to sign this bill into law.