The Full Guide to Rent Stabilized Apartments in NYC
In New York, there are two types of renters, those who live in rent-regulated apartments and those who don’t. Most of the time, the latter group badly wants to be part of the first, and for a good reason. With rents in NYC so high (and going higher every year) many people are in desperate need of affordable housing. Finding a rent-stabilized apartment will mean getting a series of guarantees and protections that regular market-rate renters don’t have. Primarily, the safety net of relatively predictable rent increases and automatic lease renewals. But even with about one million rent-stabilized apartments in the city (comprising roughly 44% of the rental stock) finding one of these apartments isn’t so easy. To give you the best chance of finding and holding onto one, this full guide will take you through all the ins and outs of rent-stabilized apartments in NYC.
Rent controlled and rent stabilized apartments
When on the hunt for an NYC apartment on the cheap you’ll often encounter these two terms. It’s important to establish right from the start that these are not the same things. Both come under the broader term of rent regulations. New York, starting in 1943, was the first state in the nation to adopt these laws as a way to ensure affordable housing. Since then rent regulation laws have changed substantially.
The oldest of these which is still in effect is rent-controlled apartments. Unfortunately, you can pretty much forget about scoring one of these. To qualify as a rent-controlled apartment, the unit must be in a building that was built before 1947. In addition to that, it also has to have been occupied by the same family since 1971. Such units can only be passed down through the family, and the receiving heir has to have lived in the apartment for at least two years before the death of the previous leaseholder.
A newcomer to the NYC rental market stands a much better chance of landing a rent-stabilized apartment but these still come with restrictions. The benefits, as with rent-controlled apartments, include a maximum amount by which a landlord can increase the rent, the right to a lease renewal each year and protection against arbitrary eviction. To qualify as a rent-stabilized apartment, a unit must be in a building that:
Was built before 1974
Has more than six units
Is not a condo or co-op building
Has not been previously deregulated through vacancy decontrol
Also, the unit itself cannot be priced (presently) at over $2,700. If the rate goes above this, then the apartment can be deregulated. Each year the rent increases are set by the Rent Guidelines Board. At present, the rent increase for lease renewals is:
1-year lease: 1.5%
2-year lease: 2.5%
This is set to expire on September 30th, 2019, meaning that if you sign a lease before then, these increases will apply to you. The RGB will take another vote in June this year to determine what the increases for 2019-2020 will be. You can check their website to keep up-to-date with the latest announcements and read more into the intricacies of rent regulation laws. In particular, you’ll want to look into the laws regarding deregulation of stabilized apartments.
Rent stabilization is still not 100% secure
Everyone wants a rent-stabilized apartment because of the security they provide. But don’t fall into the mistake of thinking there will never be any sudden rent hikes. A few exceptions and loopholes currently exist that allow landlords to raise the rent year-round.
Improvements to the apartment – If a landlord makes any new improvements to your apartment, such as renovations or installing new appliances, they can pass on 1/40th (buildings with 35 units or less) or 1/60th (those with more than 35) of the cost to the tenant in the form of higher rent. To do this though they must first get written permission from the tenant.
Capital upgrades to the building – if a landlord makes major upgrades to the building, like installing a new boiler, they can raise the rent by spreading it over a number of years. However, tenants can challenge this in court if they can prove the upgrades were unnecessary or that the cost of upgrades doesn’t justify the rent hike.
Getting rid of preferential rent – This is when a tenant is paying less than the standardized legal rent, usually because the legal rent is higher than the average for a neighborhood. A loophole currently exists that allows landlords to raise the rent to the legal amount once the lease is up for renewal. You can protect yourself against this by checking the wording in your lease. If the lease only states your preferential rent rate and makes no mention of the legally regulated rent, then your rent cannot be raised to the legal rate at the end of your lease. But if the lease cites both different rates, then your rent can be raised to the legal amount once it’s time for renewal.
How to find rent-stabilized apartments
The problem with finding a rent-stabilized apartment isn’t low inventory. It’s mainly because those who find them tend to hold on to them. They typically won’t be advertised as landlords can easily find new tenants through the family or friends of vacating tenants. But if you’re determined to find one then get ready for what could be a long search. The first place to look is the database of the Rent Guidelines Board. But the PDF files the lists come in can be a chore to work through. Another useful source is the DHCR’s website, which allows you to search by address. The only catch to these two recourses is that they don’t say which units in a building remain stabilized.
Employing the services of a real estate broker can help speed things up. But ask them first to demonstrate that they have a good network of contacts across the city. Narrow down your search by finding buildings constructed between February 1st, 1947 and January 1st, 1974. You can also leave out condo and co-op buildings and any units priced over $2,700. Keep your ears close to the ground, dig deep in your search and stay patient. You may get lucky.
The post The Full Guide to Rent Stabilized Apartments in NYC appeared first on ELIKA Real Estate.
