Rosenthal’s proposal comes on the heels of recently passed rent reform measures including the Housing Stability and Tenant Protection Act of 2019, which placed caps on how much landlords and property owners can raise rents on newly vacated rent-regulated apartments.
Rosenthal’s bill—A09966—suggests new restrictions and potential
penalties on landlords. The bill would place “a fee on landlords who
have residential dwelling units which remain vacant for a period of
greater than three months.”
Not surprisingly, professional associations that represent landlords
and property owners have blasted Rosenthal’s new bill. In a statement
released Tuesday night, the Community Housing Improvement Program, which
represents 4,000 building owners across the five boroughs, called
the bill unconstitutional.
“Our sense is it is not legal based on the Court of Appeals ruling in Seawall v. New York,” CHIP spokesman Michael Johnson told Crain’s. “A lower court viewed it was unconstitutional, and the Court of Appeals upheld it. You can’t put a severe penalty on a property owner for not renting out an apartment.”
In the 1986 case of Seawall Associates v. the City of New York, the state Supreme Court ruled in favor of property owners, who argued penalties imposed by Local Law No. 22 were unconstitutional. The ruling was upheld in 1989 by the Court of Appeals.
When asked about previous court rulings being applied to her new proposal, Rosenthal said her bill is “absolutely constitutional.” The Seawall case “is not on point,” she said.
Rosenthal’s bill is a response to the increase in vacant residential units all across the city. CHIP calculates that since the Housing Stability and Tenant Protection Act of 2019 changed the laws regarding rent-regulated units last year, more than 3,000 apartments have been vacated that likely require significant repairs, which landlords say they cannot afford to make. The units are left vacant for extended periods in order to keep operating costs low for property owners.
“In the past, building owners have been able to take these vacant units, make renovations and bring them up to market-rate rents, and that has saved tenants from higher rents,” Johnson said in an interview. “Because they changed the law, rents can’t go up, and there’s no vacancy bonus, and you can’t claim more than 1/180th, or $83, in rent increases, so the bank will not lend money to any owner who is basically not going to make more than the interest rate to pay it back.
“A lot of the smaller landlords just don’t have the capital to take it out of pocket to fix up the unit.”
Rosenthal dismissed those concerns, calling Johnson’s arguments a “PR campaign” and stating she doesn’t believe landlords can’t afford to repair vacant apartments.
“For years the scales were balanced way in the landlords’ favor,” she said, noting that Democrats now control both the Assembly and the Senate—which has led to long-delayed rent-regulation legislation. “These are very sensible rules.
“No one says you can’t rent out an apartment to make a profit,” she added. “I don’t understand how not renting out a unit will earn them money.”
CHIP told Crain’s it plans to lobby Assembly and Senate members in hopes of educating them on what it sees as the illegality of Rosenthal’s new proposal.
The industry has said that countless contractors and small business owners involved in apartment renovations have been impacted since the laws changed last year.
“This is obviously not the best way to fix up vacant units and get
them on the market,” Johnson said, “and it’s not the best way to provide
affordable housing.”
Rosenthal said she expects the real estate industry to continue challenging her plan. However, she added, she and her colleagues will not compromise on the matter.
https://www.crainsnewyork.com/real-estate/landlords-could-be-fined-leaving-apartments-vacant
“Our sense is it is not legal based on the Court of Appeals ruling in Seawall v. New York,” CHIP spokesman Michael Johnson told Crain’s. “A lower court viewed it was unconstitutional, and the Court of Appeals upheld it. You can’t put a severe penalty on a property owner for not renting out an apartment.”
In the 1986 case of Seawall Associates v. the City of New York, the state Supreme Court ruled in favor of property owners, who argued penalties imposed by Local Law No. 22 were unconstitutional. The ruling was upheld in 1989 by the Court of Appeals.
When asked about previous court rulings being applied to her new proposal, Rosenthal said her bill is “absolutely constitutional.” The Seawall case “is not on point,” she said.
Rosenthal’s bill is a response to the increase in vacant residential units all across the city. CHIP calculates that since the Housing Stability and Tenant Protection Act of 2019 changed the laws regarding rent-regulated units last year, more than 3,000 apartments have been vacated that likely require significant repairs, which landlords say they cannot afford to make. The units are left vacant for extended periods in order to keep operating costs low for property owners.
“In the past, building owners have been able to take these vacant units, make renovations and bring them up to market-rate rents, and that has saved tenants from higher rents,” Johnson said in an interview. “Because they changed the law, rents can’t go up, and there’s no vacancy bonus, and you can’t claim more than 1/180th, or $83, in rent increases, so the bank will not lend money to any owner who is basically not going to make more than the interest rate to pay it back.
Rosenthal dismissed those concerns, calling Johnson’s arguments a “PR campaign” and stating she doesn’t believe landlords can’t afford to repair vacant apartments.
“For years the scales were balanced way in the landlords’ favor,” she said, noting that Democrats now control both the Assembly and the Senate—which has led to long-delayed rent-regulation legislation. “These are very sensible rules.
“No one says you can’t rent out an apartment to make a profit,” she added. “I don’t understand how not renting out a unit will earn them money.”
CHIP told Crain’s it plans to lobby Assembly and Senate members in hopes of educating them on what it sees as the illegality of Rosenthal’s new proposal.
The industry has said that countless contractors and small business owners involved in apartment renovations have been impacted since the laws changed last year.
Rosenthal said she expects the real estate industry to continue challenging her plan. However, she added, she and her colleagues will not compromise on the matter.
https://www.crainsnewyork.com/real-estate/landlords-could-be-fined-leaving-apartments-vacant
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