Will the sweeping reforms to New York State’s rent regulation rules mean an end to development projects that might have created thousands of affordable units?
Some think they will.
“The Durst Organization, which owns millions of square feet of commercial and residential space in the city, had planned to erect 2,500 apartments in seven buildings at Hallets Point—including hundreds of affordable units,” reported Crain’s New York Business. “The firm now says the work will cease after having recently finished the first building at the $1.5 billion development.”
The problem, Crain’s explains, is “the way the new rent- regulation law affects a key tax break developers have insisted is crucial to the economics of large apartment projects in the city. Called Affordable New York, the state program grants builders a lucrative property-tax exemption in return for reserving up to 30% of a project’s square footage for affordable units. Developers who receive the incentive also must pay a preferential wage to construction and building workers for projects in sections of Manhattan, western Queens and northern Brooklyn.”
“At the beginning of this legislative session, I called for the most sweeping, aggressive tenant protections in state history,” New York State Governor Andrew Cuomo said in a statement upon the bill’s passing. “I’m confident the measure passed today is the strongest possible set of reforms that the Legislature was able to pass and are a major step forward for tenants across New York … I know full well the importance of affordable housing and with the existing rent laws set to expire tomorrow, I have immediately signed this bill into law—avoiding the chaos and uncertainty that a lapse in these protections would have caused for millions of New Yorkers.”
“Rent stabilization is a lifeline to millions of tenants in New York City, but this lifeline has been under attack for decades, resulting in the loss of hundreds of thousands of affordable housing units,” state Sen. Zellnor Myrie, one of the bill’s proponents, told Curbed. “With this bill, we finally put power back in the hands of tenants not only in New York City but across the whole state and take a step toward housing justice for all New Yorkers.”
However, Curbed continued, “it didn’t go as far as some tenants’ rights advocates had hoped: Instead of eliminating the MCI loophole, the bill calls for reforming it so landlords who make major renovations can raise rents by 2 percent (rather than 6 percent as before), and narrowing the scope of what constitutes an MCI. It also does not include a “good cause” provision. Landlord groups, meanwhile, have vowed to fight the legislation, which one developer told Curbed is “punishing landlords 101.” The Commercial Observer reported that industry groups will try to challenge some elements of the bill—including the provision making its reforms permanent—in court, and could file a lawsuit…”
