Gov. Cuomo Orders Up to 50,000 Apartments Back on Rent Regulation

Recently, Gov. Andrew Cuomo ordered 50,000 housing units to be returned to rent-regulated status. He has charged that owners getting a major tax break from New York State have illegally deregulated apartments. Cuomo, who issued his order on Jan. 6, said that the owners of the targeted buildings are receiving J-51 tax benefits from the state and had claimed to be exempt from rent regulation, contrary to the law. The state is sending a letter to each building owner with instructions to re-register their units as rent-regulated apartments.

New York courts have determined that any apartment that was subject to the rent stabilization law at the date of the receipt of the J-51 benefits must register those units as rent stabilized. Cuomo’s effort, which is pursuant to those court decisions, is expected to return 50,000 apartments to rent regulation and provide the tenants of these units with protections under the Rent Stabilization Law and Code, including annual renewal leases and rent increases pursuant to the Rent Guidelines Board.

Roughly half of the buildings affected have more than 36 units and about half are smaller buildings with fewer than 36 apartments. In New York City, the targeted properties include nearly 2,000 buildings in Manhattan, more than 500 buildings in the Bronx, more than 700 buildings in Queens, and nearly 20 buildings in Staten Island, in addition to 800 buildings in Brooklyn.

Owners who illegally deregulated apartments were caught when New York Homes and Community Renewal used internal data to identify apartments that have left the rent regulation system while cross referencing those units with those receiving the J-51 tax abatement. Owners receiving the letter regarding their J-51 abatement have an incentive to re-register voluntarily or face the prospect of having to pay damages on any overcharge awards granted.