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New York Feeling the Crunch Under New Rent Restrictions

New York Rent Restrictions

Digested from CBS2 New York

Just four months after Gov. Andrew Cuomo signed into law the strictest set of rent regulations ever established, rental housing owners and operators are already struggling to find funds to maintain their units – with some opting to keep their properties off the market altogether, according to CBS2’s Lisa Rozner, who recently examined the measures’ most immediate detrimental consequences.

Before enactment of the laws, owners could increase rent by roughly 20 percent when a unit was vacated, and additional increases could be added for upgrades made to the apartment. The new rent laws have eliminated those rules, and owners are struggling to find renovation and maintenance funds.

Rozner spoke to one owner who halted their renovation, even though the entire unit had already been demolished.

“I can’t count on the money to come in because there’s no chance to recover it from anybody,” Oscar Perez told Rozner. “No tenant will be able to pay me for it in a rent increase or as a vacancy allowance that would help me recoup some of it.”

Because of New York’s new rental housing restrictions, Perez is left with a vacant apartment and no funds to renovate and repair the 1900s-era unit. Prior to the law’s passage, he spent $45,000 on work. Now, Perez told Rozner he doesn’t “have the money to finish it.”

Proponents of the bill argue that the law allows maintenance of safe, functional apartments and protects residents. State Sen. Brian Kavanagh, in speaking with Rozner, said the laws keep owners from making large profits on small investments and replacing low- and moderate-income residents with wealthier ones.

Owners may be able to recoup some money spent on upgrades through a rent increase, but options are strictly limited and the amount is negligible. Another owner told Rozner her rental income after costs was $17,000 last year, but roof repairs will cost her double. Such constraints make it difficult to make other improvements and repairs.

Despite the freshness of New York’s laws, owners and operators are already feeling the crunch. The climate warrants close monitoring as the unknown, and unintended, consequences of rent restrictions continue to resonate throughout the state.

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