New rules for rent-stabilized apartments appear imminent
By Teri Karush Rogers |June 22, 2011 - 8:08AM
[Updated 10:19 AM] It may soon be easier to qualify for one of NYC's million or so rent-stabilized apartments. The New York State legislature will shortly vote on a deal to raise the cap on the amount of income you can earn and still be eligible, from $175,000 to $200,000 per year combined household income, according to articles in The New York Times and The New York Daily News.
Legislators also seem likely to approve a measure that will slow the number of stabilized apartments being turned into market-rate apartments when the unit is vacated. Currently, if the rent on a stabilized unit has hit $2,000 a month upon vacancy, it becomes "decontrolled," which means landlords can charge what they want thereafter. The new legislation proposes to raise that threshold from $2,000 to $2,500 a month.
BrickUnderground's "Rent Coach" Bruce Feldman explains how the new threshold may have some unintended consequences.
"The real effect will be to force landlords to intensify their efforts--sometimes illegally or with use of loopholes in the law--to deregulate these apartments," says Feldman, a former leasing agent for three major New York City landlords.
"Apartment buildings purchased by investors over the past 5 years or so will be the most negatively affected by this new legislation," he explains. "Those landlords made their purchase decisions and got their financing based on their projections of income, at least in part by anticipating the deregulation of stabilized apartments at the $2,000 level. This is really bad news for them, and will likely have the unintended effect of incentivizing them to continue to improperly or illegally decontrol these units."
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