tenancy rent control laws

 

Following the end of WWII and a normalization of America’s economy, The EPCA was allowed to expire on June 30, 1947, replaced the following day by passage of the Federal Housing and Rent Act. The new legislation exempted from price controls any buildings constructed after February 1st, 1947.

http://nysdhcr.gov/Rent/faqs.htm#rsrc1

Back in 1947, the only form of rent control was a rent ceiling, which – simply enough – meant that the price for a rental unit was capped and could not be raised unless you had a dispute over tenancy deposit with landlord. This form is the most outdated, though as many as 40,000 rental units in New York City are still regulated under a provision that dates from 1947:

“The rent control program generally applies to residential buildings constructed before February 1947 in municipalities that have not declared an end to the postwar rental housing emergency…”

http://www.housingnyc.com/html/resources/faq/rentstab.html

The most common form of rent control, and one that is still in use today, is tenancy rent control, which allows for a rent hike after a tenant has moved out, but is subject to strict levels of increases once the new rent has been established. This is also known as second-generation rent control or rent stabilization:

“New York City has a system of rent regulation known as “rent stabilization.” The system was enacted in 1969 when rents were rising sharply in many post-war buildings. The system has been extended and amended frequently, and now about one million apartments in the City are covered by rent stabilization. Rent stabilized tenants are protected from sharp increases in rent and have the right to renew their leases…”

http://www.housingnyc.com/html/resources/dhcr/dhcr1.html

A third form of rent control is called vacancy decontrol. With this, once a tenant has moved out, a landlord can increase the rent to whatever the market will pay. It is essentially a method to deregulate units that were previously under price stabilization protection.

The issue of rent control of any sort has long symbolized the socio-economic divide in the U.S. Those who support controls argue that housing is a right, that tenants should not be subjected to arbitrary hikes in rent that might render them homeless, and that a healthy city must include all levels of the social strata. Without rent control, a place like New York City would provide a home only for the richest of tenants.

The other side of this argument states that price controls of any kind are contrary to the fiercely American tenets of capitalism and amount to little more than subsidized housing, with the landlord footing the bill. Such a scenario creates decreased profits for landowners and a disincentive to build, thus exacerbating any housing shortage.

The conflict can be seen in the varying degrees of regulation enacted by the New York State legislature. For example, units covered by a rent ceiling apply only if the tenants have been living in them prior to July 1, 1971, when vacancy decontrol provisions were established as a result of the Urstadt law, named by Governor Rockefeller after the state housing commissioner, Charles Urstadt. With this, authority over rent regulation shifted from the municipal to the state level, creating resentment towards lawmakers in Albany from those in favour of “home rule.”

More importantly, the Urstadt law deregulated controls on nearly 400,000 rental units in and around New York City.

The law lasted only three years. Due to a “serious public emergency”, the 1974 Emergency Tenant Protection Act (ETPA) was enacted because “…a substantial number of persons residing in housing not presently subject to the provisions of the emergency housing rent control law or the local emergency housing rent control act are being charged excessive and unwarranted rents and rent increases…”

This situation, stated the ETPA, lead to a resolve that“ that preventive action by the legislature continues to be imperative in order to prevent exaction of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices tending to produce threats to the public health, safety and general welfare…”