In response to the dramatic changes made to the state’s landlord-tenant laws, some owners are reportedly trying to conserve cash by bypassing or ignoring necessary renovations of their buildings.
“Landlords started 535 fewer renovation projects from July through November in rent-regulated buildings over the same period in 2018, a decline of 44%,” noted the Wall Street Journal in a recent report.
The legislative changes which were passed in June prevent landlords from increasing rents or from deregulating units. In order to continue to maximize a decent return on their investments, there are those who are reportedly cutting costs and are refusing to engage in pricy renovation projects. And many experts predict, as the years progress, owners are only postponing the inevitable – as even the trendiest apartment building will someday be in dire need of maintenance and improvements.
“The new law removed incentive to do upgrades beyond the minimum,” said Frank Ricci, a landlord and director of government affairs at the Rent Stabilization Association.
Previously, landlords would renovate old apartments or do structural improvements so that they could raise rents and, ultimately, secured a greater return on their real-estate investment. The new law limits an owner’s ability to recoup more than $15,000 in cost over a 15-year-period, which is far below the cost of a typical renovation project.
There is a growing concern that the new rent laws will cause a decline in the quality of life for New York City’s residential tenants for decades to come.
“Those concerns are certainly legitimate,” noted Jonathan H. Newman, managing partner of Newman Ferrara LLP. “Like any business, when profit margins decline, so do expenditures and outlays. Will this mean more tenants will have to fight for repairs? Likely so. But that’s why lawyers stand at the ready to compel owners to do that which they are statutorily obligated to do: to provide housing free of conditions that would be detrimental to the lives, safety and/or wellbeing of the state’s residential occupants.”
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To read the full report, click here: https://www.wsj.com/articles/new-york-landlords-slow-apartment-upgrades-blame-new-rent-law-11576756800
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