What ACTUALLY Passed in Albany?

I’m still a little annoyed by the endless headlines about how bad this deal is for the industry, and a lot of what I’d call clickbait, propaganda, and whining around it, but I want to break down what ACTUALLY happened, because facts > feelings. And there’s a lot of info that is relevant to you, the NY renter. 


OK, so what am I even talking about? The state senate in Albany spent months coming to an agreement over how to deal with the expiration of old rent stabilization laws, as well as how to protect tenants in general. Landlords pushed for less regulation because #profits, while tenant advocacy groups pushed for across the board caps on rent because #therentistoodamnhigh. Per usual, I feel the answer lay somewhere in the middle, and I’m pretty happy with what the bill contains (but I’ll get into what I DON’T agree with later). 


Basically, there were nine bills proposed, and according to representative Julia Salazar, my girl crush from North Brooklyn, all of them needed to pass in full in order to protect tenants.


Here’s the full breakdown of all nine, and here’s the 75 page bill that actually made it through, but for those of you who do not want to read all that (everyone), I’m here for you. I’ve broken down the basics of what was proposed versus what passed:

  1. Expand Emergency Tenant Protection Act - Doesn’t affect NYC, as we already have this, but this allows the state to regulate evictions anywhere that the vacancy rate is 5% or below. Because if there is no inventory available and you are evicted for an invalid reason, it’s easy to become homeless. PASSED IN PART

  2. Prohibit evictions “without good cause” - Tenants can only be evicted with “good cause.” Failure to pay rent IS cause enough for eviction, but this would state that if the increase is more than 1.5x the local inflation rate that can be considered an “unconscionable” increase. I know PLENTY of NYC landlords who as policy increase rents annually by more than this amount. DID NOT PASS.

  3. End Vacancy Decontrol - Apartments cannot suddenly become “free market” if comparable apts in the area are being rented for over $2700 and an apartment becomes vacant, which was the rule before. PASSED. PACKAGE ALSO ENDED “LUXURY DECONTROL.” Previously, if you earned $200k two years in a row the landlord could de-regulate the apartment while you were still living there (and without improving it).

  4. Eliminate Vacancy Bonus - Part of why landlords are so incentivized to get stabilized tenants out is that this turnover allowed them to increase the rent 20% instead of the percentage allowed by typical stabilization standards. PASSED. I agree with this because again, it incentivized landlords to actively get tenants out of their buildings so rents could increase more quickly. 

  5. Make Preferential Rents Permanent Until Vacancy - I have had friends and clients concerned when signing rent stabilized leases where they were receiving a preferential rent. This means that the market value of the apartment was less than the legal rent on the apartment. But this preferential rent was never guaranteed past the end of the lease term, and could sometimes result in huge (like a thousand dollars a month huge) jumps. This change would lock in the preferential rent and only allow stabilization-regulated increases until after the tenant moved out. PASSED.

  6. End Permanent Rent Hikes for “Major Capital Improvements” - While some landlords would make major, necessary improvements to their buildings and pass some of the expense onto their tenants, this often looked more like landlords making (or faking) massive, unnecessary renovations in order to increase rents and force out tenants. Unlike IAI’s, MCI’s do not require tenant consent and are not limited to vacancy periods. PARTIALLY PASSED.

  7. End permanent Rent Hikes for “Individual Apartment Improvements” - IAI’s are a big part of what my DHCR complaint is about. During a vacancy in a rent controlled apartment, landlords could put unlimited money into “improving” the apartment and pass the expense along to the future tenant. This was usually used to bring apartments up to market rate, and, unfortunately, the landlords often did not actually do the work, because the onus was on the tenant to figure it out. PASSED.

  8. Extend Time for Overcharge Complaints - I filed my DHCR complaint almost exactly four years after the overcharge occurred, and had I filed even a couple months later I would have been sh*t out of luck. It’s essentially a statute of limitations that kept agencies like the DHCR from investigating overcharge complaints if the complaint was filed more than 4 years after the overcharge occurred, and kept them from looking at any documents more than 4 years prior. So good landlords only had to hold onto their proof that they did the necessary work for four years, but bad landlords only had to dupe tenants for four years before the new, illegal rent would become legal. I think you can see which side I fall on here. PASSED. 

  9. Rent Control and Rent Stabilization Parity - I don’t know as much about rent control as I do about rent stabilization, because it only applies to a small number of existing leases that were signed pre-1986. And the only way these leases can be passed down is through blood relatives, so the real estate industry doesn’t get involved. Rent controlled apartments usually stay at the same rent for a very long time, but then will occasionally jump up large percentages, which is problematic for people who live on fixed incomes. This parity means that the amount rents in these units is limited the same way it is in stabilization. PASSED.


What do I think of this? Per usual, I can see both sides #teamempathy. I think that landlords absolutely have a right to earn money for being landlords. And the policies, the way they stood before, were there to protect them and help them keep earning more money as neighborhood rents increased. But unfortunately there are bad actors in any group, and I have again seen firsthand what happens in practice with MCI’s, IAI’s, predatory increases for non-stabilized rents, and how vacancy decontrol incentivized these people to harass tenants into moving out. 

This is why we can’t have nice things, guys! You took advantage of the system, so now you’re being put in “landlord time out.”

But everyone saying that these changes are horrific is probably exaggerating. I’ll continue to delve more into why over the next few days.

xo

Anna

Meta Monday: "The Real Estate Industry" vs. Reform

"The harmful impact of this legislation will be profound for New York City’s economic future. There are many losers including small property owners, contractors as well as tenants. This legislation will keep rent lower for some, but also significantly diminish housing quality and lead to less tax revenue to pay for vital government services. It will worsen the City's housing crisis. The construction of future affordable units will slow, if not end altogether, the housing vacancy rate will worsen and nothing will have been done to make it easier for those who struggle to pay their rent. There was a path to responsible reform that could have protected tenants as well as owners, jobs and revenue, but Albany chose not to take it." – statement from REBNY, the Real Estate Board of New York

I disagree with everything in this statement, so it’s hard to see headline after headline claiming that “the real estate industry” as a whole agrees with these sentiments. And it’s frustrating to also feel like I need to tread carefully when discussing these things. REBNY does not employ me, but Compass is a REBNY brokerage. Which is a good thing! Being REBNY means that we have to follow a code of ethics and not be generally horrible (although some will always find a way to be shady and find loopholes). But my code of ethics is my own, and it’s not going to coincide exactly with any agency. Also, REBNY recently asked Trump to speak, and Trump is neither ethical nor particularly skilled at real estate, so clearly I don’t see eye to eye with them on everything. 

So here’s how I’m going to frame this: everyone within the real estate industry is entitled to his or her opinion. And I know that my opinion is biased because I am a tenant in a rent stabilized apartment where a former landlord decided to take advantage of loopholes or a lack of oversight now addressed by this new bill. I also know that many spokespeople from the real estate industry are biased because they have never lived in a rent stabilized apartment and probably have never had to go to housing court or file an overcharge complaint, have never had a landlord’s law firm blatantly lie to them and to the courts and the DHCR, have never seen the lived reality of how many major landlords ACTUALLY behave. So I’m not going to say that anyone is necessarily wrong, just that I do not agree and that I think it’s important to share this disagreement. 

I’ll get more into the nitty gritty in my next New York Value, but for now I’m going to break down this statement and why I think it’s inaccurate, although I can understand why some people feel that way. 

“The harmful impact of this legislation will be profound for New York City’s economic future. There are many losers including small property owners, contractors as well as tenants.”

OK, some small property owners who purchased buildings in need of lots of repair may suffer. I can agree with that. But I also don’t believe that this statement was generated by real concern for them. These owners decided to buy buildings; they made the investment. And some investments are bad investments. If you believe in unchecked capitalism and no regulation, as people against rent reform seem to, then you believe that people are going to win or lose out and have no one to blame but themselves. 

Contractors? People will still hire contractors. Contractors will be ok. 

And tenants? Tenants have gained rights here. There may be isolated instances where a landlord doesn’t make necessary repairs because of this reform, but it’s more likely that the landlords weren’t making the repairs anyway. And this protects them SO much more. It’s night and day. I will delve more into this, but again, I don’t believe this came out of concern for tenants. I think it’s a talking point. 

“This legislation will keep rent lower for some, but also significantly diminish housing quality and lead to less tax revenue to pay for vital government services.”


Housing quality in rent stabilized buildings already sucks. Landlords already take advantage of these tax breaks while refusing to provide necessary services, because they want tenants to move out so they can increase rents. Now that they can’t increase rents as much, they’ll just refuse to provide services because they don’t care, not because they want to take advantage of vacancy increases. 


“It will worsen the City's housing crisis.”

Nope. It protects tenants and limits evictions, meaning it will help the housing crisis. Please provide your source. 


“The construction of future affordable units will slow, if not end altogether, the housing vacancy rate will worsen and nothing will have been done to make it easier for those who struggle to pay their rent.”

Hudson Yards developers were allowed to rezone because they promised to build a significant amount of affordable housing. In a decade they have not built a single apartment. Tell me again how there’s been a TON of affordable construction and how this bill will somehow limit it? And those of us who struggle to pay rent can breathe more easily knowing we cannot be forced out of our apartments as easily, that landlords can’t increase rents in predatory ways, and that there is more oversight. I don’t see any truth to this.


“There was a path to responsible reform that could have protected tenants as well as owners, jobs and revenue, but Albany chose not to take it.”

I’ve been watching this closely, and I didn’t see any path to “responsible reform” but forward by my industry. What I saw was a bunch of lobbyists using people like me as pawns to further their agendas and landlords basically whining that if they made slightly less money it would be SO HARD that they’d let their buildings completely fall into disrepair. If I had seen anything coming out of my industry that didn’t make me roll my eyes or want to punch something, I would have been all about it. Again, please provide your source.

I’m sure a lot of people in real estate will hate that I’m writing this, but I think it’s important for the future of our industry to show that we do not always stand united, and that we do care about tenants for real, not just when it suits us from a PR standpoint (not that NYC real estate is good or even decent at PR).

I love my job. I love good landlords. I love responsible development. And I also love tenants. So here we are.

xo

Anna

Guest Post - Could Smart Home Technology Help Sell Your House?

— EDITOR’S NOTE:

This guest post was written by Suzie Wilson of Happier Home, who knows far more about this topic than I do, and I recommend you all check out her site. I thought it fit in well with seller’s month (because it’s about adding value to your home) and also Earth Day, because smarter homes are often more energy efficient homes. It also fits in with an upcoming post about what I learned from the inspection of an 1878 mansion, as well as next month’s theme. Thank you so much, Suzie!

I HOPE YOU ALL ENJOY! —

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Smart home technology is making homes safer, more integrated, and more convenient than ever, and homebuyers are taking notice. According to Coldwell Banker's Smart Home Marketplace survey, the majority of buyers today prefer a home with smart technology. Here are the most popular smart features with buyers and how you can use them to help sell your home.

Smart Thermostats

Percentage of buyers who want it: 77 percent

What you'll spend: $150 - $250

Smart thermostats allow users to adjust the temperature and review energy use data from any Wi-Fi-connected device. After a period of learning users' temperature preferences, a smart thermostat adjusts the temperature to maximize comfort while minimizing energy bills.

Smart Smoke Detectors

Percentage of buyers who want it: 75 percent

What you'll spend: $35 - $120

Smart smoke detectors send an alert to your phone when the alarm goes off. As CNET explains, there are several ways to achieve smart smoke detection:

  • Replace the smoke detector with a Wi-Fi-connected model. While the most expensive option, it offers the benefit of silencing alarms from your phone.

  • Install a listening device. This is a separate device that sends alerts when a smoke alarm is heard. Listening devices are an affordable alternative to replacing every smoke detector in a big home.

  • Use smart batteries. Smart batteries are Wi-Fi enabled and power your smoke detector the same as any other battery. A silencing function is included when used with battery-powered alarms.

Smart Carbon Monoxide Detectors

Percentage of buyers who want it: 70 percent

What you'll spend: $35 - $150

Smart carbon monoxide detectors work the same way as smart smoke detectors. Smart batteries can also be used with combination smoke-CO detectors.

Smart Cameras

Percentage of buyers who want it: 66 percent

What you'll spend: $150 - $300 plus subscription fees

Smart home cameras let you react to security events or your dog's at-home antics while they're happening. A smart home camera detects movement within its view, records the footage, and notifies you. Some cameras also include two-way talk, face recognition, and other features. Buyers should be aware that some smart home cameras include subscription fees for cloud storage of footage.

Smart Locks

Percentage of buyers who want it: 63 percent

What you'll spend: $150 - $300

Unlock and lock your doors with the touch of a button — even if you're away from home. Track what time the dog sitter comes and goes, assign a single-use code to the handyman, and know immediately if someone tampers with your door. These are the highlights of what smart locks can do for your home, but it's not all. This smart home feature is great for security-minded buyers as well as people with limited hand mobility.

Smart Lighting

Percentage of buyers who want it: 63 percent

What you'll spend: $15 - 60 per bulb or $50 - $160 per switch


You have two options for smart home lighting: smart switches or smart bulbs. However, as Vintage Revivals points out, it's usually more cost-effective to install smart switches because a single switch can control multiple bulbs. However, in lights where you want dimmability, bulbs are the right choice. Ensure everything is wired correctly by hiring an electrician to swap out switches; you'll pay around $189 to $543 for the convenience in New York City.


When shopping for smart devices for your home, follow Investopedia's recommendation and stick with well-known brands like Apple, Google, Nest, and Samsung. Buyers recognize and trust smart home technology from these brands. While they might cost more than off-brand alternatives, they offer the best return on investment. Additionally, off-brand technology may not share the long-term support and smart home integration offered by mainstream brands. Also, it may not hurt to invest in some great tools to help you install things if you’re doing it yourself. Finally, check around online for the top security providers in New York City who can help get your smart home security system up and running.


It's clear that homebuyers are interested in smarter homes. And with low prices for many popular devices, sellers have little to lose when they upgrade with smart home technology. When you install one of these smart home solutions or all six, you’re creating the tech-savvy quality that buyers desire.

- - Suzie Wilson

February '19 - Dinner & A Show

Two of my amazing relocation clients asked me for recommendations around the city, and if you ask you shall receive. Since I put people in neighborhoods all over the city, I came up with some options in different neighborhoods.

And since it’s INTERNATIONAL WOMEN’S DAY (woo!), why don’t you grab a cool lady friend of yours and hit the town. Or you can go out with a boy…or two boys…or bring you dog; I won’t judge.

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