The amendments, some of which limit rents on combined or ‘Frankensteined’ apartments, mark the first update since 2014 to regulations in the Rent Stabilization Code governing about 1 million apartments.
(Emma Whitford) Tenants rally in November 2022 ahead of a meeting on rent regulations in Lower Manhattan.
Landlords will soon face limits on how much they can increase the rent on combined, or “Frankensteined,” apartments.
A notice posted this week by the state’s Department of Housing and Community Renewal, or DHCR, says that a series of amendments to local rent regulations, initially proposed last fall, will be published in the New York State Register by Nov. 8.
They mark the first update since 2014 to the Rent Stabilization Code, which governs roughly 1 million rent-regulated city apartments. Historically, landlords who knock down walls to make larger apartments have been able to set a rent of their choosing. But now, the legal rent will be calculated based on the rent of the two prior apartments combined.
If an apartment is chopped up, the rent in the smaller units will drop proportionally to the percentage decrease in square footage. And if a landlord cuts into a regulated apartment to expand an unregulated one, the new, larger apartment will be regulated, subject to annual adjustments set by the Rent Guidelines Board.
The End Apartment Warehousing Coalition celebrated the news Wednesday. The group has documented examples, in neighborhoods including the Upper West Side, of landlords holding apartments vacant—a practice referred to by critics as “warehousing”—and then combining them.
Sue Susman, a tenant at 50 West 57th St., said her group is “really happy” about the new regulations. “We’re happy about how newly-created apartments will stay rent stabilized, will be more affordable, and landlords who harass tenants out won’t get any increase at all,” she added.
The new regulations also clarify when a tenant has the right to stay in a stabilized apartment after their relative moves out.
Under rent stabilization, family members who hope to stay on must overlap with the primary tenant for at least two years before their relative vacates. But there has been disagreement in the courts about when to start the two-year clock if the primary tenant has moved out but continues to pay rent or sign leases.
The regulations now clarify that the two-year lookback begins when the primary tenant physically moves out. Previously, tenant lawyers say, a landlord might not realize a tenant had moved out for several years. And because the successor had already been living alone for some time, they could be evicted.
Jason Blumberg, senior staff attorney at Mobilization For Justice, described a hypothetical situation in which a person grew up in an apartment with their father, who eventually moved out to retire to Florida.
“Basically the theory was that the landlord, because they had been tricked into thinking dad still lived there, somehow the succession claim was forfeited as a penalty for this sneaky behavior,” he said. “Even though most of the time in situations like this people don’t know.”
The new regulations also codify changes already in place thanks to the Housing Stability and Tenant Protection Act of 2019, or HSPTA, which eliminated several avenues for landlords to increase rents or remove units from stabilization.
Sherwin Belkin, founding partner of Belkin Burden Goldman LLP, which represents landlords, said the regulatory changes hurt his clients. “All it is is harmful for owners and capitulation to tenant advocates,” he told City Limits.
On succession claims, Belkin said, DHCR “has essentially made a roadmap for a tenant who is absent from an apartment to hide [this] from a landlord.”
“I don’t know if it will be my firm but I will certainly expect there will be challenges to these in court,” he added. “How well those challenges do remains to be seen.”
Jay Martin, executive director of the Community Housing Improvement Program, a landlord trade group, pointed out that the language on apartment combinations is also included in legislation passed through the state legislature this spring, but which Gov. Kathy Hochul has yet to sign.
“These rules being promulgated means that there’s no need for those bills,” he said.
Martin has been a vocal critic of the pending legislation, which would also allow rent stabilized tenants to dig deeper into their rent histories to challenge suspicious increases in court.
Ellen Davidson of the Legal Aid Society, who consulted on the bills, urged the governor to quickly sign them. She argued that having the regulatory language in law will help beat back any legal challenges. Until recently, she added, DHCR’s plans had been opaque.
“The regulations went into a black hole,” she said. “And no one knew whether they were ever going to come out of that black hole.”
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