New York City landlords, squeezed by changes to the rent laws, have been cutting back on apartment renovations for the past half year.
By: Miguel Torres
An analysis by the Wall Street Journal of Department of Building records revealed that that 535 fewer renovation plans were commenced in rent-regulated buildings from July to November of this year than during the same time period last year. That means landlords spent about $71 million less.
“The 44 percent decline on the previous year suggests owners of rent-regulated buildings were becoming reluctant to renovate apartments after changes to the rent law restricted their ability to increase rents to pay for renovations and other improvements,” reported
The Real Deal. “It’s the caps on the Major Capital Improvement and Individual Apartment Improvement programs that industry experts say will disinventivize investment.” It quoted landlord Frank Ricci, who heads government affairs at the Rent Stabilization Association, who said “The new law removed incentive to do upgrades beyond the minimum.”
This fall, Curbed New York looked at some ways that landlords were coping with the expense brought on by the changes in laws. “In a July New York Daily News op-ed, landlord Marc Goldstein, who owns 400 rent-stabilized units in Brooklyn, said that “without some form of moderate rent increases” to recoup building improvement costs, he “will no longer maintain my properties with the same vigor and pride,” the news organization reported.
“But he’s hardly the only landlord who has threatened to let apartments fall into disrepair,” Curbed New York added. “In July, Blackstone Group, one of NYC’s largest property owners, said that it would halt renovations at Stuyvesant Town and Peter Cooper Village (aside from fixing leaks or hot water service), citing the new laws.”
More recently, CBS News reported that “New laws meant to limit rent increases in rent-subsidized apartments might be having adverse affects. Some landlords say now they simply don’t have the money to renovate certain apartments, instead keeping them vacant or in poor shape, CBS2’s Lisa Rozner reported.
Rozner saw one apartment in the Bronx on Monday that was down to the sticks. Everything was ripped out as part of plans to renovate, but landlord Oscar Perez put a hold on it after Gov. Andrew Cuomo signed new rent laws in June. Previously, a roughly 20-percent rent increase could be added when a unit was vacated, and owners could add additional increases to the rent for upgrades made to the apartment. Now, those rules are gone.”
