BRINGING BACK PREFERENTIAL RENT RIGHTS IN NYC?

As reported recently in The Village Voice:

"Before June 2003, landlords who gave tenants preferential rents had to continue them as long as the current tenant stayed in the apartment, with any increases based on the discounted rent rather than the legal maximum. But on the last night of that year’s legislative session, the Republican-dominated state senate amended the state’s about-to-expire rent-stabilization law to let owners raise preferential rents when the tenant renewed his lease, unless the lease explicitly forbade it. The senate then adjourned, leaving the Democratic-controlled assembly with the choice of accepting its changes or letting rent stabilization itself die."

Senator Liz Kruger has introduced Senate Bill S3712 2017-2018 Legislative Session, to amend the emergency tenant protection act of nineteen seventy-four and the administrative code of the city of New York, in relation to the regulation of rents and which will prohibit an owner from adjusting the amount of preferential rent upon the renewal of a lease. The bill is currently in committee. The Senator notes:

"As housing costs increase across the City of New York, the displacement of working families and middle class residents from rent regulated apartments has resulted in a housing crisis. The displacement of rent regulated tenants has been aggravated by a landlord's ability to abandon a preferential rent upon the renewal of a lease.

Prior to a change in law, a preferential rent was permanent for the duration of a tenancy and could only be increased upon vacancy. However, as a result of amendments to the law in 2003, landlords are now permitted to abandon a discounted, preferential rent and impose the statutory rent upon vacancy or renewal of a lease. Pursuant to this provision, tenants throughout New York City have faced sudden and unanticipated rent increases upon lease renewal. As a result, many tenants cannot pay new rental payments and have been forced out of their rent-regulated apartments.

Equally problematic is that there is no "clean hands" requirement that a landlord conduct him/herself responsibly when abandoning a preferential rent and imposing the maximum rent upon vacancy. If a tenant leaves an apartment that is uninhabitable due unsanitary conditions, lack of heat, hot water, electricity, repairs, etc., a landlord can precipitously increase rent upon the vacancy of an apartment. As such, the law encourages bad actors to deprive tenants of a habitable apartment in order to benefit from the ability to abandon a preferential rent.

In order to stem the displacement crisis in New York City and preserve the affordable housing stock available to working families and moderate-income residents, the rent regulation laws are in need of reform. This proposed amendment of the preferential rent provisions is an important step in that direction."