Albany’s next big housing fight might be over upstate rent stabilization

In an off-year for housing policy, state Sen. Brian Kavanagh and Assembly Member Sarahana Shrestha’s new bill to ease the adoption of rent control upstate could face opposition from the real estate lobby at a time when multiple municipalities that have tried to opt into rent stabilization are facing lawsuits from landlords.

Under the current law, municipalities must conduct a vacancy study and find that the vacancy rate is below 5% in order to declare a housing emergency, which then qualifies them to opt in to the Emergency Tenant Protection Act and institute rent stabilization. The Rent Emergency Stabilization for Tenants Act would allow municipalities outside of New York City to use a variety of factors and publicly available data to declare a housing emergency, rather than having to conduct a vacancy study. 

The bill would also expand the amount of buildings eligible for rent control. Under the ETPA, only buildings built before 1974 that have at least six units are eligible for rent stabilization; the new bill would expand eligibility to all buildings with less than six units and those that haven’t been built or substantially renovated within the past 15 years.

So far, the City of Kingston is the only municipality that has opted into the ETPA and created rent regulations successfully, though a pending court case has stopped rent stabilization from actually going into effect. Other municipalities have attempted to opt into the ETPA, only to be met with lawsuits brought by local landlords organized by the Hudson Valley Property Owners Association. In each case, landlords challenged the validity of the vacancy study.

Other bills have attempted to address the issue before; state Sen. Michelle Hinchey and Assembly Member Sarah Clark sponsored one that formalized the vacancy study process and created penalties for unresponsive landlords. But the Rent Emergency Stabilization for Tenants Act goes further, allowing municipalities to skirt the issue of vacancy studies entirely.

Shrestha said that on top of the vacancy studies being legally perilous propositions, they’re incredibly complicated processes that take time and money, making them a daunting task for some local governments. 

“We want to make it easier to declare a housing emergency because the thing is, we know there's a housing emergency, and it shouldn't be so hard to prove it, but given that it has turned out so hard to prove, it shows that the proof that we are requiring is sort of arbitrary and unnecessary, which is, of course, the vacancy study,” Shrestha said. 

Because of the bill’s exclusive focus on suburban New York, it is unclear how much resources or energy outfits like the Real Estate Board of New York will marshal to push back against the bill, since it doesn’t change their playing field following last year's housing compact. 

Kavangh’s constituency is based in Manhattan, but in his role as state Senate Housing Chair, he believes the bill is necessary to build on pandemic-era tweaks to housing regulations. 

“It is a change, otherwise we wouldn't be proposing it,” he said. “But we think it is a reasonable extension of what we did in 2019, which was to make rent regulation an option for localities throughout the state. We're now just giving local governments the flexibility to consider various factors and to make a determination and the question of whether this is good in any particular locality and is going to be conducive to producing more housing.”

What is giving real estate pause about the bill is how it could make rent stabilization easier to opt into and more prevalent throughout the state, eventually opening the doors to further changes – even in New York City. There are already other proposals in the state Legislature to amend the ETPA with similar goals in mind of making it easier for localities to opt in, but Shrestha and Kavanagh’s bill is unique in letting local leaders skirt the vacancy study hurdle while expanding the amount of eligible buildings. 

“We would counter that the reason it's so hard is not the lawsuits. It's because there's such a micro-population of available housing to begin with,” said Jay Martin, senior executive vice president of external affairs for the New York Apartment Association. “Sometimes, and in the case of Poughkeepsie or Kingston, literally, 15 apartments could change the difference between a housing emergency and a housing surplus. So when you're talking about a universe of supply that really a new apartment building could help improve, that, we think that is the solution.”

HVPOA Executive Director Rich Lanzarone said the organization was formulating a response to the bill, but felt that with the real estate industry not having any big asks for the state Legislature this year, there wasn’t a counterweight for tenant advocates to use as leverage. Lanzarone’s view was that bills like this and the expansion of rent stabilization throughout the state would spell doom for small landlords. 

“I mean they're going after mom-and-pops. I mean, this is who they're trying to go after, right?”  he said. “Those are the landlords that exist outside of New York City, and basically they'll just sell out to big corporations who can deal with it.”

REBNY would not outright say they planned to combat the bill, but they expressed their displeasure with current housing regulations. 

“State housing policy has led to a housing crisis in New York City that shows no sign of abating and extending these policies to the remainder of the state will lead to the same results,” said REBNY President James Whelan in a statement.

Tenant advocates like Hudson Valley-based political organization For The Many and Housing Justice For All already support the bill and view it as vital for the future of affordable housing in upstate New York.

“It’s unconscionable that upstate communities face such substantial burdens to opting into rent stabilization and protecting tenants, with thousands of households paying the price for the real estate industry’s greed each year,” said Brahvan Ranga, political director at For the Many. “By eliminating the vacancy study requirements for adopting ETPA and empowering local lawmakers to define for themselves what buildings are covered, the REST Act would give every New York municipality the tools to protect tenants and keep their communities safe.”