Apartments Vanish From New York’s Rent Regulation System and Questions Linger About How - THE CITY

Amid an ongoing lodging affordability crisis, the fig of apartments New York landlords registry arsenic rent stabilized has dropped importantly — even aft a 2019 authorities instrumentality forbade deregulation successful astir cases.

Potentially thousands of tenants are present paying rent that exceeds formerly regulated amounts, without the rights rent-regulated tenants receive, specified arsenic guaranteed lease renewals and constricted increases.

Figures THE CITY obtained from the authorities Division of Housing and Community Renewal (DHCR) amusement 858,000 apartments registered arsenic rent-regulated arsenic of November 2022, down from 974,000 successful 2019, the twelvemonth the authorities legislature passed the sweeping Housing Stability and Tenant Protection Act, oregon HSTPA.

That instrumentality ended alleged vacancy decontrol, successful which spot owners could region vacant apartments from regularisation aft rents reached $2,774 a month. Any diminution successful the fig of rent-regulated apartments aft the instrumentality took effect connected June 14, 2019, raises questions.

Could these missing apartments that vanished from rent regularisation beryllium successful buildings built oregon renovated successful speech for taxation breaks, specified arsenic 421-a? No, due to the fact that the fig of those rent-regulated apartments is growing, not shrinking.

Could landlords simply beryllium precocious successful filing their 2022 registrations? Surely some. Landlords tin registry their rent stabilized apartments with the authorities years aft the deadline. 

But erstwhile years amusement declines too: the 927,000 registered arsenic rent-regulated for 2021 was inactive 47,000 beneath the 2019 level and 26,000 beneath the 2020 level.

“There’s nary tenable mentation for wherefore that should beryllium happening wrong the law,” says Edward Josephson, supervising lawyer successful the Law Reform Unit astatine The Legal Aid Society, who trains lawyers connected the rent laws. 

Some landlord groups, however, spot these numbers differently. 

“The thought that tens of thousands of apartments person vanished from registration is absurd. This is simply the earthy lag that we spot successful registering apartments each year,” said Jay Martin, enforcement manager of the Community Housing Improvement Program, successful a statement the radical posted aft this article’s publication. They noted that astir 50,000 units unregistered successful 2018 yet got reported to DHCR.

How galore of astir 116,000 unregistered apartments volition instrumentality to the rent stabilization system, and when, remains to beryllium seen.

These apartments that person vanished from the rent regularisation rolls are abstracted from the tens of thousands that, arsenic THE CITY archetypal reported, are inactive registered arsenic rent-stabilized but are vacant.

Missing successful Action

So what precisely is going on? THE CITY visited 1 gathering successful Prospect Heights, Brooklyn, successful the hunt for clues.

In the mediate of a fashionable portion of shops and restaurants not acold from the Brooklyn Museum, 750 Washington Ave. contains 16 apartments, each of which were rent regulated anterior to 2019. HSTPA became instrumentality successful June 2019, ending the anticipation of high-rent deregulation. The building’s owner, Witnick Real Estate Partners, purchased the spot successful December 2018.

The building’s June 2019 spot taxation bill listed each 16 apartments arsenic rent stabilized. But the proprietor documented conscionable 10 stabilized apartments in 2020 and past six apartments each twelvemonth after.

THE CITY talked to astir fractional of the tenants presently surviving astatine 750 Washington. Many moved into the gathering wrong the past year, and astir each had been unaware erstwhile they signed their leases that their apartments had antecedently been rent-stabilized.

The tenants collectively requested anonymity retired of interest for imaginable retaliation by their landlord.

Four of the precocious arrived tenants — each surviving astatine 750 Washington nether market-rate, non-regulated leases, paying arsenic overmuch arsenic $4,000 monthly — requested their apartments’ rent histories from DHCR. These documents supply a year-by-year breakdown of each past rent summation and besides amusement erstwhile landlords region apartments past the high-rent threshold from the rent regularisation system.

All 4 showed that their apartments had been successful the rent regularisation system, betwixt 2018 and 2019, past removed by 2020.

One rent history a tenant shared with THE CITY showed a “high rent vacancy” connected their apartment’s record, archetypal recorded connected Oct. 12, 2020. High rent vacancy decontrol had been abolished successful June 2019, and anterior to that, lone applied to apartments whose ineligible rent was supra $2,774. The past ineligible rent reported successful this apartment, successful April 2019, was $1,720.82.

A 2nd tenant shared their astir identical rent past with THE CITY, which besides listed a “high rent vacancy” successful 2020 contempt the ineligible rent being astatine slightest $1,000 little than the $2,774 threshold. 

In some cases, to walk the $2,774 people the spot proprietor would person had to walk betwixt $30,000 and $40,000 successful renovations each astatine erstwhile — called an Individual Apartment Improvement — and past started a caller lease with a caller tenant sometime precisely betwixt April and June 2019, conscionable earlier the caller rent laws took effect.

THE CITY tracked down the erstwhile tenants successful the archetypal of these 2 apartments, who said that they’d lived successful the flat for respective years earlier moving retired successful June 2019 — leaving nary clip for renovations oregon starting a caller tenancy earlier the instrumentality changed.

Witnick, the landlord astatine 750 Washington Ave., owns 36 buildings crossed Brooklyn and Manhattan. According to the spot lookup instrumentality Who Owns What, their buildings person mislaid 226 rent stabilized units since 2007 — oregon astir 40% of their full portfolio. 

Witnick did not respond to respective requests for remark from THE CITY.

Even the caller tenants paying precocious rents accidental their gathering leaves overmuch to beryllium desired.

“They don’t repair anything, they don’t hole anything,” said 1 tenant regarding the building’s absorption company, Brighton Management. 

The gathering has 78 unresolved lodging violations, metropolis Department of Housing Preservation and Development records show, including 7 for mice and cockroach infestation and 5 for missing oregon defective fume detectors, nearly 5 times higher than the emblematic per-apartment complaint for New York City. 

The tenant recounted that erstwhile they moved in, “there was a state leak and cipher notified us,” which led them to trust much connected their chap tenants for support. “That’s erstwhile I started gathering my neighbors.”

Narrowed Exits

If anything, New York City should person much rent regulated apartments present than it did earlier the 2019 instrumentality changed, not fewer.

According to data compiled by the metropolis Rent Guidelines Board, much apartments were added to the rent stabilized lodging banal than removed from it since 2018 — 31,382 gained and 30,788 lost. Most of those gains came done taxation interruption programs. 

Apartments tin legitimately permission rent regularisation erstwhile those taxation breaks expire aft 2 decades oregon more, oregon successful a fewer different ways.

A process called “substantial rehabilitation” allows landlords to instrumentality full buildings retired of rent stabilization if they tin beryllium a “deteriorated state” and regenerate 75% of the gathering systems. Last month, tenants testified astatine a authorities lodging bureau hearing successful favour of closing this loophole to rent regulation. But important rehabilitation removed lone 593 apartments from rent regularisation since 2019, the RGB figures show. 

Landlords person besides converted rent stabilized buildings into co-ops and condos, but this signifier has go progressively rare fixed that the 2019 rent laws necessitate 51% of existing tenants to consent to a conversion. Since 2019, these conversions person removed 1,561 apartments from rent regulation. Finally, landlords person combined an chartless fig of regulated apartments successful bid to rise rents — successful a process dubbed “Frankensteining” by tenant advocates.

That leaves the lack of thousands of apartments from the registration strategy since 2019 inactive unexplained. But DHCR, the authorities lodging bureau that oversees the process, does not automatically unfastened an probe erstwhile apartments vanish from the system. Rather, the bureau “conducts outreach to gathering owners passim the yearly registration play to reenforce their work to file,” according to spokesperson Brian Butry. 

Over a decennary ago, the authorities created a “proactive instrumentality enforcement office” called the Tenant Protection Unit (TPU) to promote compliance with rent regularisation laws and analyse rent stabilization fraud. Butry noted that since its creation, the TPU “sent registration request letters to astir 1,900 owners who had not decently registered,” starring to the re-registering of implicit 95,000 apartments. These stats equate to astir 150 request letters and 8,000 apartments connected mean each twelvemonth since the TPU was founded. 

Tenants Give Up

Tenant advocates are anxious to alert DHCR of signs an flat whitethorn person improperly been removed from the rent regularisation strategy — but they’re thwarted by choky restrictions connected information. For starters, the authorities provides rent histories and stabilization presumption of apartments lone to tenants oregon landlords, and lone erstwhile requested.

HCR is presently moving done a backlog of 3,428 pending rent overcharge cases crossed the state, according to an internal memo obtained by THE CITY. Those see complaints alleging instances of amerciable deregulation. With 27 unit members processing each of New York State’s overcharge cases, the agency’s Office of Rent Administration faces delays owed to “due process” — allowing landlords and tenants clip to respond to claims — arsenic good arsenic “COVID-related bureau closures,” HCR spokesperson Butry says.

Tenant advocates rally earlier a proceeding connected regulations astir rent-stabilized apartments, Nov. 15, 2022.

Ben Fractenberg/THE CITY

Those delays mean tenants often springiness up earlier their cases ever get heard — by which constituent they whitethorn person moved retired of their flat oregon New York.

“Because overcharge complaints are taking truthful agelong to determine, you are truly forcing radical to determination retired and person the overcharge assertion determined aft you leave,” says Alejandro Coriat, a tenant organizer successful Upper Manhattan. Given these delays, much transient tenants who whitethorn not person arsenic overmuch “skin successful the game” tin beryllium hesitant to instrumentality action, Coriat says. 

But Crown Heights Tenant Union, a tenant radical moving successful the vicinity of 750 Washington Avenue, has brought unneurotic “long-term and caller tenants” to combat rent overcharge cases successful their vicinity “for 10 years and counting,” the enactment said successful a statement to THE CITY. 

Hidden Information

Some advocates assertion that the authorities is not doing capable to enforce its ain rules connected rent regulation, and they reason the authorities is withholding information it is required to marque nationalist nether the 2019 rent laws.  

“HCR has not practiced the level of information transparency that we judge was written into the Law,” testified tenant advocator Lucy Block astatine an HCR nationalist proceeding successful November, referring to Part L of the 2019 rent laws. This conception of the instrumentality requires HCR to “​​make publically available, and connected its website successful instrumentality readable format, the information utilized to tabulate the figures” successful its yearly study connected rent administration. 

In its latest report, HCR included 2 links to information files but failed to stock underlying information for astir metrics. Notably, the report’s supporting information does not supply the fig of rent stabilized units by gathering — adjacent though the authorities supplies the aforesaid accusation to New York City’s taxation postulation agency. (Tenant groups person resorted to penning machine codification to extract the information from PDF files of each building’s metropolis spot taxation bills.)

“I privation the information to beryllium public, but I much truthful privation them to clasp landlords accountable and enforce registration requirements,” Block told THE CITY. For Block, who is elder probe and information subordinate astatine ANHD, a consortium of assemblage lodging groups, HCR’s registration information contains “low hanging fruit” that tin constituent to imaginable violations of rent regularisation instrumentality that members of the nationalist tin find. 

“There should beryllium an contiguous emblem if a landlord registers less rent stabilized units than they did since the transition of HSTPA,” said Block. “HCR should beryllium looking into it immediately.”

The Crown Heights Tenant Union echoed the sentiment.

“Landlords perpetrate rent fraud due to the fact that they person operated with impunity, due to the fact that they cognize that cipher successful State oregon City authorities is watching,” work a connection from the union, “and enforcement of the instrumentality falls wholly connected tenants’ shoulders.”

This communicative has been updated to see a effect from a landlord organization.