On June 14, 2019, the “Housing Stability and Tenant Protection Act of 2019” was passed by the legislature and signed into law by the Governor. Among many changes, the new law expands the previously limited option to enact rent stabilization laws at the local level. Prior to its enactment the expired rent control law only applied to New York City, Nassau, Rockland, and Westchester counties. Additionally, unlike previous versions of the rent control law, which expired every four years, this law is permanent and permits any municipality with a jurisdiction that has less than 5% vacancy to declare a housing emergency and adopt the Emergency Tenant Protection Act (ETPA) after conducting a study to confirm that the applicable jurisdiction has less than a 5% vacancy rate.
The ETPA does not apply to buildings containing less than six (6) units; rent controlled apartments; motor courts; tourist homes; nonprofit units; housing supervised by the government; substantially rehabilitated housing and housing within buildings completed after 1973.
Municipalities that wish to adopt the ETPA must formally adopt a resolution declaring a housing emergency under the ETPA, after a public hearing has been held with a minimum of ten days’ notice and finding that the jurisdiction has less than 5% vacancy of applicable rental units. The resolution declaring a housing emergency (adopting the ETPA) should include a finding that there is less than a 5% vacancy, and provide details regarding the supply of housing accommodations, the condition of the accommodations and the need for regulating and controlling the rents. (ETPA; McK. Unconsol. Laws § 8623). When adopting the resolution, the municipality should consider the applicability and indicate whether it shall apply to all buildings that are subject to the ETPA, or whether it will only apply to buildings of a certain size or area.
As an example, the Village of Ossining voted to adopt the ETPA within its community in September 2018 upon a finding that the overall vacancy rate for applicable rental units was approximately 3%. However, in February, 2019, the Village voted to repeal and replace ETPA within Ossining and modified ETPA to apply to buildings with 20 or more units and excluding buildings with 20 or more units that have agreements with the Village to set aside at a minimum 20% of their units as affordable units. Landlords in Ossining sued the Village in October, 2018 and on May 8, 2019, the Court granted the Village’s motion to dismiss the lawsuit. A Notice of Appeal was filed. For more information review PJB Equities, Inc., et al. v. Village of Ossining, et al.
Once the municipality has adopted the ETPA, if another municipality within the county has not yet adopted the ETPA, the county will create a County Guidelines Board consisting of nine members, upon the recommendations of the local legislative body of each municipality which has determined the existence of an emergency, to promulgate the applicable limitations on rental increases based upon its findings. The recommendation must be made within thirty days of the first local declaration of an emergency within the county. The Board shall consist of two representatives of tenants, two representatives of owners, five public members with at least five years’ experience in finance, economics or housing. Members, officers, and employees of municipal rent regulation agencies, the state division of housing and community renewal, persons who own or manage real estate covered by the law and officers of any owner or tenant organization are not permitted to serve on the rent guidelines board. Subsequent to any local declaration of emergency within the county, the Commissioner shall reconstitute the existing rent guidelines board to ensure representation of all municipalities within the county. The County Guidelines Board sets guidelines for rent adjustments annually based upon several factors including economic condition of the market; prevailing and projected taxes and other costs; supply of housing accommodations versus vacancy rates; living indices etc.
In addition to the limitation on rental increases, the buildings subject to the ETPA are also subject to the rules promulgated by the New York State Department of Housing and Community Renewal, which establishes requirements for lease renewals, maintenance standards and provides owners a means to recover capital improvements through limited rental increases.
The enactment of the Housing Stability and Tenant Protection Act of 2019 provides municipalities with the means to apply rent control regulations under the ETPA should they find a less than 5% vacancy rate of applicable rentals and determine, after a public hearing, it is in the communities’ interest to adopt ETPA.
Should you have any questions, please contact a Nicholas M. Ward-Willis or a member of our Municipal Law Practice Group.