From “good cause” carve outs to adjusted IAI caps, City Limits breaks down how major planks of the state budget deal will impact tenants’ eviction protections—and rents.

After nearly three weeks of anxious speculation, New Yorkers can finally review the details of a major state housing deal that temporarily extends new eviction defenses to certain renters, depending on factors like their apartment’s location, age, ownership and cost.

The deal—awaiting a vote Saturday but expected to pass—also includes a development incentive for New York City, offering multi-decade tax breaks for apartment buildings with a share of low-rent apartments. And under a new tiered system, rent stabilized landlords will be allowed larger rent increases following apartment renovations.

Since announcing the parameters of the deal on Monday, Gov. Kathy Hochul has emphasized the parts aimed at boosting construction. “The more supply you have, the better it is for tenants,” she told Brian Lehrer on WNYC—supply and demand. 

The governor also alluded to controversy over the scope of new rules to help tenants in market rate apartments stay housed and fight large rent increases. “This is so much more than they had, and I would take that as a win,” Hochul said.

Historically these renters lacked any recourse if their landlord chose not to renew their tenancy, or raised the rent beyond what they could afford.

But the message was cold comfort to many tenant organizations across the state. Since 2019, they’ve fought for a “good cause” eviction bill sponsored by Brooklyn Senator Julia Salazar and Syracuse Assemblymember Pam Hunter—up against a multi-million dollar real estate industry lobbying effort, according to their own analysis.

Salazar and Hunter’s bill would have given most tenants a defense against eviction, so long as they adhered to their leases and kept up with rent, plus a path to challenge rent hikes above a certain level. The version in Friday’s deal excludes several types of households, and is time-limited—it will expire on June 15, 2034.

“The point is that it’s supposed to be understood as a right. That is what empowers tenants to understand the law,” said Cea Weaver, organizing director for the statewide coalition Housing Justice for All. “Right now, the message that the governor is giving is that some limited set of people might have new rights.”

‘Good cause’ carve outs

The new state budget empowers tenants in certain market rate apartments to fight eviction and rent hikes over 5 percent plus inflation or 10 percent, whichever is lower. Protections will kick in immediately, though landlords will have a four month buffer before they need to start complying with notice requirements.

Some early reactions have been positive. Manny Patreich, president of the building service worker union 32BJ SEIU, touted these “strong… tenant protections” paired with construction incentives and welcome wage standards for his members.

But this version of good cause—in place for the next decade—has numerous carve outs and sets different rules for New York City, where it will apply by default, and the rest of the state, where localities will have the choice to adopt it.

Anywhere the law is in place, there will be a carve out for new construction: buildings certified for occupancy after January 2009 will be exempt for 30 years. This will reassure developers seeking a return on their investment, said Sherwin Belkin, founding partner at the law firm Belkin Burden Goldman.

A longtime critic of the 2019 good cause bill, he called this version a “substantial improvement,” but predicted it could change down the road to be more favorable to tenants. “It’s harder to fight tweaks than it is to fight new statutes,” he said.

Other across-the-board exclusions include owner-occupied buildings with up to 10 units, co-ops and condos, mobile homes, hotels, dorms, seasonal rentals, certain types of assisted living facilities and apartments deemed affordable under a government regulatory agreement.

The law also adds new grounds to evict: when an owner wants to remove an apartment from the rental market, and when they plan to demolish the building. Judges can also approve rent increases above the good cause parameters, based on factors like a landlord’s fuel, insurance and maintenance costs and any “significant repairs,” like replacing electrical systems or removing asbestos.

“I’m just afraid that we’re just creating more and more ways that make it difficult for tenants to benefit from the law, and easier and easier for landlords to get around it,” said Weaver of Housing Justice for All. 

In the five boroughs, owners will benefit from a “small landlord” exemption if they own 10 or fewer residential units “directly or indirectly, in whole or in part.” Buildings owned by a business entity will have to reveal the names of all owners in order to qualify for the exemption. 

Apartments renting above 245 percent of their county’s Fair Market Rent (FMR), a federal estimate, will be also excluded. The state will be required to publish a county-by-county high-rent guide each year. Outside the city, localities will be able to choose their own portfolio and high rent exemptions. 

Based on 2024’s FMRs, New York City tenants will be excluded from good cause protections if their rent is over $5,846 for a studio, $6,005 for a one-bedroom, $6,742 for a two-bedroom, or $8,413 for a three-bedroom. “People in a luxury situation don’t need the protections,” Hochul told reporters Monday. 

Voting ‘yes’ Saturday, Salazar called the new law an historic and critical step that she will seek to improve on.*

“I want to be very clear: I believe that every single New Yorker, every single family in our state, deserves the strongest legal rights to stay in their homes,” she said. “This bill alone, sadly, cannot achieve that. But I will continue to fight until the laws in our state finally do.” 

Coverage and enforcement 

It remains to be seen how many tenants will be covered by this new regime. A spokesperson for the Senate Democrats told City Limits Thursday that they expect 75 percent of tenants in New York City will have protections, either existing rent stabilization or good cause. 

The latest Housing Vacancy Survey found that 41 percent of city rentals are stabilized, a separate system that already limits rent hikes and ensures lease renewals for some. 

Then there’s the question of enforcement. City Limits previously reported that it’s difficult to parse building ownership and portfolio size, particularly since landlords can own buildings through Limited Liability Companies, or LLCs. A 2023 law will eventually require landlords to register with a state database, but it won’t be available to the public. 

Under the budget deal, landlords who want to increase rent substantially, or don’t want to renew a lease, will need to send a notice to the tenant saying whether they are covered by good cause and, if not, why. A notice is also required with any initial or renewal lease stating whether the tenant is covered by good cause. 

Landlords who sue for eviction and believe they qualify for the “small landlord” exemption will have to present the names of all property owners and how many units they own in whole or part, plus those apartments’ addresses. 

“Unfortunately, we would hope that it would not have to result in a court case, but the reality is, once you show up there then everybody’s cards have to be on the table,” Senate Majority Leader Andrea Stewart Cousins told reporters Thursday.

IAI Increase 

The budget deal also lifts the Individual Apartment Improvement (IAI) cap, which limits how much landlords can increase rents to compensate for renovations. The change, effective in six months, will impact stabilized apartments in buildings that predate 1974 with six or more units, as well as some newer buildings built with a tax subsidy. 

In 2019, New York passed the Housing Stability and Tenant Protection Act (HSTPA), which eliminated most avenues for owners of stabilized buildings to increase rents between tenancies. That bill set the IAI cap at $15,000 over 15 years. Rents could only increase between $83 or $89, depending on the building size. 

The HSTPA also required that IAI rent increases be removed after 30 years. But this week’s deal reverses that change, making them permanent. 

According to the agreement, the IAI cap is now lifted to $30,000, allowing for a rent increase up to roughly $178. Landlords can spend more, up to $50,000, in empty apartments that had been occupied for at least 25 years, or were vacant from 2022 through 2024. 

For units with the higher cap, allowable rent increases are $320 or $347, depending on the building size. But this more extensive work will be subject to audit and random inspections, and landlords will be barred from collecting rent increases if they’ve harassed or overcharged tenants in the last five years. 

Landlords have been pushing various proposals this year to increase rents on regulated apartments, arguing that some empty units won’t be rentable without a boost to offset repair costs. During her Monday budget remarks Hochul said the housing deal will bring “warehoused rent stabilized units back into the marketplace.” 

But the IAI approach has drawn early criticism—and not only from renters. 

“That amount won’t be enough to actually improve the units of housing,” said Jay Martin, executive director of the Community Housing Improvement Program (CHIP), a trade organization for rent stabilized property owners. Instead, landlords will be confined to smaller projects like replacing appliances, he predicted. 

Oksana Mironova, a housing policy analyst with the Community Service Society of New York (a City Limits funder), said that IAIs are not intended to make apartments safe and habitable for tenants, but can increase a building’s value. 

“Your building could be up to code and you could still do major work and get an IAI,” she said. “An IAI is something that a landlord usually does to make an apartment worth more money.” 

The IAI changes, along with the final good cause protections, are concerning for Brahvan Ranga, political director at For the Many. His organization helped Hudson Valley cities including Kingston and Newburgh adopt local good cause measures in recent years, only to see them struck down in court. 

For the Many has also spent the last few years helping Hudson Valley cities adopt rent stabilization, thanks to a 2019 reform that expanded eligibility around the state. Increasing IAIs will affect the “buy-in and energy” of tenants organizing for rent stabilization, Ranga said. 

Now, his group will likely be juggling campaigns to secure two types of tenant protections—good cause and rent stabilization—serving different populations. “It will take a lot of resources,” he said. “And not every area has those resources.”

To reach the reporter behind this story, contact Emma@citylimits.org. To reach the editor, contact Jeanmarie@citylimits.org

*This story has been updated with comment from Senator Salazar and additional context on the pre-deal landscape, and to clarify that $8,413 is 245 percent of the FMR for a three-bedroom in New York City.

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