Amid an ongoing housing affordability crisis, the number of apartments New York landlords register as rent stabilized has dropped significantly — even after a 2019 state law forbade deregulation in most cases.
Potentially thousands of tenants are now paying rent that exceeds formerly regulated amounts, without the rights rent-regulated tenants receive, such as guaranteed lease renewals and limited increases.
Figures THE CITY obtained from the state Division of Housing and Community Renewal (DHCR) show 858,000 apartments registered as rent-regulated as of November 2022, down from 974,000 in 2019, the year the state legislature passed the sweeping Housing Stability and Tenant Protection Act, or HSTPA.
That law ended so-called vacancy decontrol, in which property owners could remove vacant apartments from regulation after rents reached $2,774 a month. Any decline in the number of rent-regulated apartments after the law took effect on June 14, 2019, raises questions.
Could these missing apartments that vanished from rent regulation be in buildings built or renovated in exchange for tax breaks, such as 421-a? No, because the number of those rent-regulated apartments is growing, not shrinking.
Could landlords simply be late in filing their 2022 registrations? Surely some. Landlords can register their rent stabilized apartments with the state years after the deadline.
But previous years show declines too: the 927,000 registered as rent-regulated for 2021 was still 47,000 below the 2019 level and 26,000 below the 2020 level.
“There’s no reasonable explanation for why that should be happening within the law,” says Edward Josephson, supervising attorney in the Law Reform Unit at The Legal Aid Society, who trains lawyers on the rent laws.
Some landlord groups, however, see these numbers differently.
“The idea that tens of thousands of apartments have vanished from registration is absurd. This is simply the natural lag that we see in registering apartments each year,” said Jay Martin, executive director of the Community Housing Improvement Program, in a statement the group posted after this article’s publication. They noted that about 50,000 units unregistered in 2018 eventually got reported to DHCR.
How many of nearly 116,000 unregistered apartments will return to the rent stabilization system, and when, remains to be seen.
These apartments that have vanished from the rent regulation rolls are separate from the tens of thousands that, as THE CITY first reported, are still registered as rent-stabilized but are vacant.
Missing in Action
So what exactly is going on? THE CITY visited one building in Prospect Heights, Brooklyn, in the search for clues.
In the middle of a popular strip of shops and restaurants not far from the Brooklyn Museum, 750 Washington Ave. contains 16 apartments, all of which were rent regulated prior to 2019. HSTPA became law in June 2019, ending the possibility of high-rent deregulation. The building’s owner, Witnick Real Estate Partners, purchased the property in December 2018.
THE CITY talked to about half of the tenants currently living at 750 Washington. Many moved into the building within the past year, and almost all had been unaware when they signed their leases that their apartments had previously been rent-stabilized.
The tenants collectively requested anonymity out of concern for potential retaliation by their landlord.
Four of the recently arrived tenants — all living at 750 Washington under market-rate, non-regulated leases, paying as much as $4,000 monthly — requested their apartments’ rent histories from DHCR. These documents provide a year-by-year breakdown of each past rent increase and also show when landlords remove apartments past the high-rent threshold from the rent regulation system.
All four showed that their apartments had been in the rent regulation system, between 2018 and 2019, then removed by 2020.
One rent history a tenant shared with THE CITY showed a “high rent vacancy” on their apartment’s record, first recorded on Oct. 12, 2020. High rent vacancy decontrol had been abolished in June 2019, and prior to that, only applied to apartments whose legal rent was above $2,774. The last legal rent reported in this apartment, in April 2019, was $1,720.82.
A second tenant shared their nearly identical rent history with THE CITY, which also listed a “high rent vacancy” in 2020 despite the legal rent being at least $1,000 lower than the $2,774 threshold.
In both cases, to pass the $2,774 mark the property owner would have had to spend between $30,000 and $40,000 in renovations all at once — called an Individual Apartment Improvement — and then started a new lease with a new tenant sometime precisely between April and June 2019, just before the new rent laws took effect.
THE CITY tracked down the previous tenants in the first of these two apartments, who said that they’d lived in the apartment for several years before moving out in June 2019 — leaving no time for renovations or starting a new tenancy before the law changed.
Witnick, the landlord at 750 Washington Ave., owns 36 buildings across Brooklyn and Manhattan. According to the property lookup tool Who Owns What, their buildings have lost 226 rent stabilized units since 2007 — or roughly 40% of their entire portfolio.
Witnick did not respond to several requests for comment from THE CITY.
Even the new tenants paying high rents say their building leaves much to be desired.
“They don’t repair anything, they don’t fix anything,” said one tenant regarding the building’s management company, Brighton Management.
The building has 78 unresolved housing violations, city Department of Housing Preservation and Development records show, including seven for mice and cockroach infestation and five for missing or defective smoke detectors, nearly five times higher than the typical per-apartment rate for New York City.
The tenant recounted that when they moved in, “there was a gas leak and nobody notified us,” which led them to rely more on their fellow tenants for support. “That’s when I started meeting my neighbors.”
If anything, New York City should have more rent regulated apartments now than it did before the 2019 law changed, not fewer.
According to data compiled by the city Rent Guidelines Board, more apartments were added to the rent stabilized housing stock than removed from it since 2018 — 31,382 gained and 30,788 lost. Most of those gains came through tax break programs.
Apartments can legitimately leave rent regulation once those tax breaks expire after two decades or more, or in a few other ways.
A process called “substantial rehabilitation” allows landlords to take whole buildings out of rent stabilization if they can prove a “deteriorated state” and replace 75% of the building systems. Last month, tenants testified at a state housing agency hearing in favor of closing this loophole to rent regulation. But substantial rehabilitation removed only 593 apartments from rent regulation since 2019, the RGB figures show.
Landlords have also converted rent stabilized buildings into co-ops and condos, but this practice has become increasingly rare given that the 2019 rent laws require 51% of existing tenants to consent to a conversion. Since 2019, these conversions have removed 1,561 apartments from rent regulation. Finally, landlords have combined an unknown number of regulated apartments in order to raise rents — in a process dubbed “Frankensteining” by tenant advocates.
That leaves the absence of thousands of apartments from the registration system since 2019 still unexplained. But DHCR, the state housing agency that oversees the process, does not automatically open an investigation when apartments vanish from the system. Rather, the agency “conducts outreach to building owners throughout the annual registration period to reinforce their obligation to file,” according to spokesperson Brian Butry.
Over a decade ago, the state created a “proactive law enforcement office” called the Tenant Protection Unit (TPU) to encourage compliance with rent regulation laws and investigate rent stabilization fraud. Butry noted that since its creation, the TPU “sent registration demand letters to approximately 1,900 owners who had not properly registered,” and its efforts led to the re-registering of over 95,000 apartments. These stats equate to roughly 8,000 apartments on average each year since the TPU was founded.
Tenants Give Up
Tenant advocates are eager to alert DHCR of signs an apartment may have improperly been removed from the rent regulation system — but they’re thwarted by tight restrictions on information. For starters, the state provides rent histories and stabilization status of apartments only to tenants or landlords, and only when requested.
HCR is currently working through a backlog of 3,428 pending rent overcharge cases across the state, according to an internal memo obtained by THE CITY. Those include complaints alleging instances of illegal deregulation. With 27 staff members processing all of New York State’s overcharge cases, the agency’s Office of Rent Administration faces delays due to “due process” — allowing landlords and tenants time to respond to claims — as well as “COVID-related office closures,” HCR spokesperson Butry says.
Those delays mean tenants often give up before their cases ever get heard — by which point they may have moved out of their apartment or New York.
“Because overcharge complaints are taking so long to determine, you are really forcing people to move out and have the overcharge claim determined after you leave,” says Alejandro Coriat, a tenant organizer in Upper Manhattan. Given these delays, more transient tenants who may not have as much “skin in the game” can be hesitant to take action, Coriat says.
But Crown Heights Tenant Union, a tenant group working in the neighborhood of 750 Washington Avenue, has brought together “long-term and new tenants” to fight rent overcharge cases in their neighborhood “for 10 years and counting,” the organization said in a statement to THE CITY.
Some advocates claim that the state is not doing enough to enforce its own rules on rent regulation, and they argue the state is withholding data it is required to make public under the 2019 rent laws.
“HCR has not practiced the level of data transparency that we believe was written into the Law,” testified tenant advocate Lucy Block at an HCR public hearing in November, referring to Part L of the 2019 rent laws. This section of the law requires HCR to “make publicly available, and on its website in machine readable format, the data used to tabulate the figures” in its annual report on rent administration.
In its latest report, HCR included two links to data files but failed to share underlying data for most metrics. Notably, the report’s supporting data does not provide the number of rent stabilized units by building — even though the state supplies the same information to New York City’s tax collection agency. (Tenant groups have resorted to writing computer code to extract the data from PDF files of each building’s city property tax bills.)
“I want the data to be public, but I more so want them to hold landlords accountable and enforce registration requirements,” Block told THE CITY. For Block, who is senior research and data associate at ANHD, a consortium of community housing groups, HCR’s registration data contains “low hanging fruit” that can point to potential violations of rent regulation law that members of the public can find.
“There should be an immediate flag if a landlord registers fewer rent stabilized units than they did since the passage of HSTPA,” said Block. “HCR should be looking into it immediately.”
The Crown Heights Tenant Union echoed the sentiment.
“Landlords commit rent fraud because they have operated with impunity, because they know that nobody in State or City government is watching,” read a statement from the union, “and enforcement of the law falls entirely on tenants’ shoulders.”
This story has been updated to include a response from a landlord organization.
https://www.thecity.nyc/housing/2022/12/23/23523439/rent-regulated-apartments-registration-missing Apartments Vanish From New York’s Rent Regulation System and Questions Linger About How