Being both a real estate attorney and a real estate broker in New York City I have had the privilege of working in a vibrant field in one of the best real estate market in the world. Having been born and raised in New York I sometimes forget just how confusing New York City's rental rules and regulations can be to an outsider, and even to those New Yorkers renting for the first time.
New York, and specifically Manhattan, is and will always be a renter's city. Because of Manhattan's geography and population it is extremely expensive to buy and own property, which has given rise to a rental market and vocal rental advocacy groups. Renters in New York can expect politicians and community organizations to speak on their behalf. Not to be outdone, Landlords in the City have also banded together and have formed powerful lobbying groups. Every year these groups meet to debate and decide annual rental increases for apartments and thus help decide the financial fate of millions.
The current New York system of rent control came about in 1943 under the watch of the federal government and switched over to state control in 1950. There are different types of rent control classifications, with each investing certain rights to the tenant.
The term Rent Control specifically refers to the situation where a tenant has lived in the same apartment since July 1, 1971. Typically this only applies to building built before the mid 1940's and it is not uncommon to find tenants who have lived in the same apartment for decades. When an apartment is rent controlled, the landlord is extremely limited in not only what they can charge for rent but also in how much they can increase the rent. It is not uncommon to find rent control tenants paying hundreds of dollars for an apartment that, in an open market, could be worth thousands.
Another common type of rental situation is Rent Stabilization, which occurs when the legal rent of an apartment is below $2,000.00 per month. Once the legal rent of an apartment rises above $2,000.00, and is vacated, the apartment is considered decontrolled. The NYC Rent Guidelines Board meets every year to set the legal annual rent increase for rent stabilized apartments.
Though Landlords decry the government oversight, Tenants, who number, and vote, in the millions, continue to hold sway with New York City and state politicians. There is currently an attempt by the pro-tenant lobby to return thousands of decontrolled apartments back to rent stabilized status and to limit the rate of rent increases. Obviously Landlords disagree and have their own resources to combat such a move. One thing is certain, Rent Control and Rent Stabilization will be a part of New York City real estate for the foreseeable future.