By Ilana Siyance
On Friday September 6th, Mayor Bill de Blasio admitted that New York State’s new rent laws may have unwelcome consequences. Earlier this year, Hizzoner had endorsed legislation, which was passed in Albany, to limit a property owner or landlord’s ability to recover investment costs from rent-regulated tenants. To sum up, under the updated law, rent regulated units remain so regardless of improvements, or abuse by the renter.
As reported by Crain’s NY, the mayor acknowledged that he is “very concerned” about reports that private equity giant Blackstone has stopped upgrades on rent-regulated apartments in Manhattan’s expansive 80-acre Stuyvesant Town complex. “No doubt, the law that passed in Albany had a lot of elements to it, and is having a variety of consequences,” the mayor said. “We came to a deal to protect affordability at Stuy-Town—you know, bluntly, that in the previous administration that Stuy-Town was almost entirely privatized—we stopped that, and came to a deal to protect affordability long-term there. That, obviously, requires the apartments to be available to people.”
In the aftermath of the legislation, there has been news that lenders were unwilling to offer resources to owners of regulated buildings, because of the missing incentive, which could easily lead buildings to negligent their maintenance and upkeep of NYC’s 1 million regulated apartments. There were also reports that Blackstone even intentionally opted to leave many of the units vacant, in light of the new legislation. The mayor, who noted the hefty subsidies Blackstone was given to keep the units under rent control, vowed to have “serious conversations” with the company to make sure it is fulfilling the terms of its agreements with the city.
Blackstone maintains that it is in complete compliance with the terms of its 2015 contracts with NYC, and is continuing to renovate and rent all empty units at Stuyvesant Town. Still, a spokeswoman acknowledged that the company is rolling back on some of the planned expenses, due to the new rent laws. “We have invested hundreds of thousands of dollars in capital improvements,” said a spokeswoman, in a statement to Crain’s. “In light of the new legislation, unfortunately, we have to make some difficult choices.”
The “Housing Stability and Tenant Protection Act of 2019”, signed into law by Governor Andrew Cuomo, had critics warning that it would leave landlords unwilling to invest in or redevelop residential rentals, ultimately harming both landlords and residents. “We also have to make sure, as with any law, if there’s any other effects, you know, expected or unexpected, we have to deal with them,” he said. “All of us want to see buildings kept up well. So, obviously, this is something we’ve got to analyze and decide where to go from there.” Notwithstanding, the Mayor reaffirmed that it “absolutely necessary to have major strengthening of our rent regulations,” and said that overall the law’s impact is “very positive.”