Landlords register more rent-stabilized units to avoid fines

Thousands more rent-stabilized apartments have been filed with the state of New York this year after a new law passed last year that fines landlords who fail to register units, as The City first reported. So far in 2024, roughly 919,500 apartments have been registered, up from between 750,000 and 800,000 registrations in recent years.

The law, signed by Gov. Kathy Hochul, came to be after The City uncovered a drastic decrease in registered rent-stabilized apartments and revealed numerous cases where landlords illegally deregulated apartments and leased them at market rates in violation of a 2019 state law.

The state’s Division of Housing and Community Renewal (DHCR) will fine landlords who fail to register by the deadline $500 per month per apartment. Previously, the fine was a one-time charge of $10 that was rarely handed out.

DHCR is issuing approximately 11,300 notices to property owners who missed the deadline, alerting them to the costly consequences of failing to register their rent-stabilized apartments.

“Although these registration numbers are preliminary, they far exceed recent historical trends and are a testament to both the work of the Office of Rent Administration and the Governor and Legislature for strengthening penalties on building owners who fail to comply,” Charni Sochet, a spokesperson for DHCR, told The City. 

“We expect registrations will continue to increase in time as building owners respond to the Notices of Delinquency.”

In 2019, the state legislature passed the Housing Stability and Tenant Protection Act, a package of laws giving new protections to renters. The act also ended vacancy decontrol, which allowed owners to deregulate vacant apartments once rents reached $2,774 per month.

Despite getting rid of vacancy decontrol, the number of apartments filed as rent-stabilized had decreased to 858,000 by November 2022, down from 974,000 in 2019, according to DHCR data.

In December 2022, to figure out this discrepancy, The City visited a building in Prospect Heights whose property tax bill showed a total of 16 rent-stabilized apartments in June 2019, 10 in 2020, and then just six each consecutive year after.

The City then contacted roughly half of the tenants residing in the building, most of whom had moved into the building within a year before and were unaware that their units were once rent-stabilized. Four of the tenants requested records of their apartment’s rent histories from DHCR, which showed that their landlord deregulated their unit after its rent exceeded $2,774 per month.

The records showed that all four of the apartments had been in the rent regulation system between 2018 and 2019 and were removed in 2020.

Rent histories for two of the apartments showed a “high rent vacancy” starting on October 12, 2020, despite the elimination of vacancy decontrol in June 2019 and both of the units not exceeding the rent threshold.

While it is hard to access state rent regulation records and statistics, with individual apartment rent histories only available to tenants and landlords, the tenant technology project JustFix has created a workaround. The project extracts and analyzes information from property tax bills posted online by the city’s Department of Finance that lists the number of regulated units in each building.

The City then launched an interactive map and database of apartments that have disappeared from registrations. Tenant organizers have used these tools to identify potential rulebreakers.

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