For many people, rent control in NYC is on par with rainbows and unicorns. Meaning, it’s nice to think about and imagine, (especially since this is such an expensive city) although it seems to be more of a myth than anything else. Realistically, what you might be able to find instead, is a rent-stabilized apartment. Read on to find out more.

What is rent control in NYC?

Rent control allows the government to regulate rent. The goal is to protect tenants living in privately owned buildings from their rent being raised illegally. The program also aims to ensure the building owner earns enough to maintain the building and make a reasonable profit. It is supposed to benefit both parties and keep both the owner and tenant feeling secure. 

What types of apartments can be rent-controlled?

The rent control program dates back to the post-World War II housing shortage. It usually applies to buildings that were erected prior to 1947. Furthermore, the apartment must not have been vacant since before July 1, 1971.

It also must have had the same tenant living in it or at least their legal successor. If there is no successor, or if the apartment becomes vacant for any other reason, it becomes rent-stabilized. If the building has fewer than six apartments, then it becomes deregulated.

Apartments in one or two-family homes can only be rent-controlled if they have had a continuous tenant since April 1, 1953. If the tenant has been vacated after this date, they are no longer subject to any rent regulation program.

Landlord and tenant rights in rent-controlled apartments

You have lots of tenant rights in New York, and they all apply to rent-controlled apartments too. If your rights are ever being violated, you can file a complaint with the DHCR (Division of Housing and Community Renewal). In turn, the DHCR can reduce the rent and/or impose various civil penalties against the landlord (if found at fault). 

For example, if the owner is harassing you to pay more in rent although you live in a rent-controlled apartment, you can file an official complaint. If the landlord is found to be guilty, they could be subject to criminal and civil penalties. They might also be denied any legal rent increases and even the right to remove the apartment from the program. They might also have to pay fines of up to $5,000 for every violation.

Rent increases for the rent control program

Rent control in NYC is subject to the Maximum Base Rent system or MBR. This means that each apartment has a maximum base rent established for it. This rate is then recalculated every two years to cover any changes in operating expenses. The owner can raise rents a maximum of 7.5% per year until the rent reaches the MBR. Although this can only happen if the owner proves they are offering the necessary services and aren’t committing any violations. Keep in mind that as a tenant, you absolutely have the right to challenge the increase if violations are occurring or if the owner’s operating costs don’t warrant it. The rent can also rise due to higher fuel costs and even higher labor expenses.

Rent control vs. rent stabilization

Rent stabilization is another form of rent regulation.

This program usually applies to apartments built between 1947 and 1974 with six units or more, however, there are a few other circumstances. For instance, another category of rent-stabilized apartments refers to those in buildings (with six units or more) that were built before February 1st, 1974. This applies even if the tenant moved in after June 1971.

The final type of rent-stabilized apartments is those in buildings that have three or more units. They also must have been significantly renovated after 1974 and are subject to special tax advantages. The rent stabilization is usually only valid while the tax benefits still apply.

Deregulation of apartments

An apartment can lose the status of being under rent control in NYC based on the amount being charged in rent and the income of the occupant. The Deregulation Rent Threshold is usually changed once per year. Therefore, if the rent of an apartment has reached $2,774.76 (as of 2019), then the property can be deregulated.

In terms of income, if the occupant of the apartment earns $200,000 or above, the property can be deregulated. This particular threshold is not adjusted every year. In fact, DHCR has to issue a written order for an apartment to become deregulated, whether based on rent or income levels.

The drawbacks

While rent control in NYC seems amazing (as does rent stabilization) because you can save quite a bit of money, there are also certain drawbacks to remember. 

One of the biggest issues is that, over time, it can lead to the owner performing less maintenance on the building. In some extreme cases, the building might even become abandoned because the profit margins simply aren’t worth it.

Due to the fact that the buildings tend to be quite old, the apartments aren’t always ideal to live in. In fact, the situation can become downright unpleasant if the owners start performing only the minimum work necessary.

Another drawback of rent control in NYC is that the savings aren’t always as great as you might think. In areas where there are a lot of these types of properties, the competition has resulted in people having to pay a finder’s fee. Unfortunately, this fee can be so high that it basically nullifies any savings you would make due to the apartment being rent-controlled.

If you’re looking for a great apartment that won’t cause any headaches or rent-related surprises, the best option is to turn to a company like Blueground. They offer well-appointed, fully-furnished and equipped apartments in some of New York City’s best neighborhoods. All of the properties are serviced via an app and come move-in ready from day one of your arrival.