Top State Court Rules 150,000 Households Not Regulated

Top State Court Rules
150,000 Households Not Regulated

Published: 
May 2018

On April 26, the New York Court of Appeals overturned a lower-court decision and ruled that some 150,000 apartments deregulated between 1997 and 2011 are not subject to rent and eviction protections. 

The case, Altman v. 285 W. Fourth LLC, involved the 1997 amendment to the state’s Rent Stabilization Law that allowed owners to remove vacant apartments from regulation if their rented is $2,000 a month or more. The state housing agency has interpreted that to mean that apartments can be taken out of rent stabilization if the new tenant is paying more. Tenant Richard Altman, who had moved into a Greenwich Village apartment in 2003, challenged that, arguing that his apartment should still be rent-stabilized, because the previous tenant had been paying less than $2,000. In 2015, the Appellate Division ruled in his favor.

 The Court of Appeals unanimously reversed that. Chief Judge Janet DiFiore said the state legislature’s intent was clear. The New York City Council, which passed a similar vacancy-decontrol law in 1994, had amended it in 1997 to specify that apartments could only be deregulated if the previous tenant had already been paying high enough rent. Judge DiFiore wrote that the 1997 state law’s bill jacket stated that it “also eliminates restrictions imposed by the New York City Council, which currently prevent vacancy bonuses and owner improvements from being considered in reaching the $2,000 threshold.”

In the two decades since then, hundreds of thousands of units have been deregulated, most by landlords using the 20 percent vacancy bonus and increases allowed for renovations to bring the rent high enough to be deregulated. That number exceeds the amount of new regulated units created—often at very high rents—through billions of dollars of subsidies given to developers.

The vacancy deregulation statute was amended in 2011 and again in 2015, so tenancies after 2011 are subject to different terms and are not covered by the Altman decision.  But for 150,000 households, the decision means that their landlord can demand whatever rent he wants when the lease expires, or refuse to renew their lease with no reason required.

On May 2, the City Council Committee on Housing and Buildings held a hearing on a package of resolutions calling for the state to enact stronger rent laws, including one which would extend rent regulation to decontrolled and other unregulated units. The state has reregulated apartments in the past: After it enacted complete vacancy decontrol in 1971, 400,000 units were deregulated in the next three years, and housing conditions worsened significantly. In response, the legislature enacted the Emergency Tenant Protection Act in 1974, putting almost all of those 400,000 decontrolled apartments into rent stabilization.