As State Housing Package Implodes, Two Tenant-Friendly Bills Still Simmering 

While Albany leaders failed to pass a comprehensive package of housing legislation this week, some advocates and high-ranking lawmakers have been working on a pair of bills they say could strengthen protections for tenants across New York City’s stock of roughly 1 million rent stabilized apartments. 

Late Thursday, hopes for a comprehensive package of housing legislation to expand tenant protections and spur new development in New York City collapsed in a round of finger pointing between the legislature and Gov. Kathy Hochul.

But behind the scenes, some advocates and high-ranking lawmakers have been working on a set of bills they say could strengthen protections for tenants across New York City’s stock of roughly 1 million rent stabilized apartments.

The full Senate was expected to vote on the bills late Friday. Though they’ve passed through committees in the Assembly, the path forward there was less clear as of Friday afternoon, as the legislature’s 2023 session comes to a close.

“I think it’s still up in the air,” Assembly Housing Committee Chair Linda Rosenthal told City Limits. “They’re important issues and I’d really like to pass them.” 

One bill sponsored by Rosenthal and Senator Brian Kavanagh—chair of his body’s housing committee—addresses a handful of tenant demands that have emerged since 2019, when the state eliminated most avenues for landlords to substantially increase rents and deregulate apartments between tenancies.

Notably, it would stop property owners from setting a rent of their choosing when they combine regulated apartments, a practice tenants have dubbed “frankensteining.” Housing and Community Renewal (HCR), which enforces the rent stabilization code at the state level, proposed this as a rule change last fall, but has yet to finalize it. 

The Rent Stabilization Association, a landlord trade group, condemned the proposal, accusing the legislature of targeting “the last remaining method” for their members to make building improvements while also making a return on investment. 

But tenant Edward Ratliff said he hoped the bill would deter landlords from emptying apartments only to combine them, as happened in his own building on East 26th Street during the pandemic. “It became kind of weird and creepy living in a building that had only half as many tenants as it used to, but what was really the horrible thing was the whole construction process,” he recalled. 

Kavanagh and Rosenthal’s bill also includes a broad definition of landlord fraud in the context of rent overcharge cases, intended to help tenants dig deeper into their rent histories to challenge suspicious increases in the state record and reduce their rent going forward. 

“Especially with some of the court decisions that have come out, it’s getting increasingly difficult to prove the landlord’s fraudulent intent to increase the rent or deregulate the apartment,” said Ellen Davidson of the Legal Aid Society, which consulted on the bills. 

For example, in April, a state appeals court ruled against tenants in a case called Burrows, finding that they missed their chance to dispute their rents because they should have known the building’s prior owner had registered them illegally. 

“What the court said in Burrows, is there was nothing that prevented you from raising this claim sooner,” said Deborah Reigel of Rosenberg & Estis PC, who represented the landlord in the case. “No one hid it from you, and since it was knowable to the tenant, there was no exception to the statute of limitations.” 

The fraud standard in the bill up for consideration this week would unfairly implicate landlords who made unintentional errors, said Jay Martin, director of the Community Housing Improvement Program (CHIP), a landlord trade group. And, in some instances, punish landlords for a prior owner’s actions. 

“Many of these cases are simple mistakes,” he said. “So now you’re telling me they’re liable for simple mistakes from years ago.” 

But Edward Josephson of Legal Aid said the legislation would simply enforce state appellate court precedent established in the aughts, in cases known as Grimm and Thornton. “The courts in Thornton and Grimm basically said fraud can take lots of forms,” Josephson said. 

Meanwhile, separate legislation sponsored by Kavanagh and Assemblymember Jeffrey Dinowitz aims to further clarify how many years of rent history a tenant can review for potential error. 

Prior to the passage of the Housing Stability and Tenant Protection Act (HSTPA), that window was four years before a fraud exemption became necessary. However, Part F of the 2019 law expanded that window to six years with the cushion that courts could further consider all rent history “reasonably necessary” to determine the legal rent. 

But in 2020, landlords secured a major win before the New York Court of Appeals in a case called Regina, which found that if a tenant wanted to determine whether they had been overcharged prior to the passage of the HSTPA, they had to use the old methodology. According to the Regina decision, retroactively holding landlords liable for past actions violated their due process. 

Kavanagh told City Limits that his goal is to clarify the law in Regina’s wake, rather than conflict with that decision: “Courts are trying to interpret what the legislature meant in light of Regina, and we thought it was a good opportunity to clarify,” he said. 

The Kavanagh and Dinowitz bill aims to establish that tenants can use the HSTPA to determine what their legal rent is, even if they can’t use those broader parameters to allege that they were overcharged prior to the HSTPA’s passage in June 2019. 

“This bill has nothing to do with a tenant getting money back,” said Davidson of Legal Aid. “But it does allow a court to determine—but for an illegal rent increase—what the rent should have been. And that would be the tenant’s rent going forward.” 

Landlord attorneys and trade groups are strongly opposed to the language about rent setting in both bills, saying it would violate their due process rights, increase their exposure to overcharge claims, and prompt a slew of lawsuits challenging rents that will make it impossible for property owners to have any reliable sense of the rents they will be able to collect in the future. 

“The economic life of buildings has at its foundation the rent roll and it has to be reliable,” wrote Olga Someras, general counsel of the Rent Stabilization Association, in an email to City Limits. “These bills essentially create a time machine that harms only owners.” 

Nativ Winiarsky of Kucker Marino Winiarsky & Bittens LLP is one of several landlord attorneys who worked on Regina, and said that if the laws pass, court challenges will follow. He accused lawmakers of trying to be “cute” with the precedent set in that case and “really interfering with the separation of powers.” 

But Cea Weaver, campaign coordinator with the statewide tenant coalition Housing Justice For All, said the legislature should not pass on a final opportunity to help renters this session. 

“It’s completely unconscionable that they are letting another session pass without not even doing the basics,” Weaver said. “What is the excuse for inaction that says tenants shouldn’t be allowed to check if their landlords broke the law?”