February 2024 Insights
By Eileen O’Toole, Contributing Editor
On Dec. 22, 2023, Governor Hochul signed into law approved legislative amendments to the Rent Stabilization Law, ETPA, and rent control laws passed by the Legislature under State Senate Bill S2980C. However, the governor’s sign-off included a proviso requiring the Legislature to issue “Chapter Amendments” to the new law. While the Legislature introduced such proposed Chapter Amendments on Jan. 4, 2024 (Assembly Bill 8506), at press time these amendments had not yet been finalized.
This month, the U.S. Supreme Court again declined to review owner challenges to New York’s rent stabilization laws, which had been challenged in two federal court cases after HSTPA amended these laws in 2019. In 74 Pinehurst LLC v. State of New York and 335-7 LLC v. City of New York (LVT #33088), the Supreme Court denied certiorari without explanation, although Justice Thomas commented that a more precisely pleaded case could result in future SCOTUS consideration of questions raised by rent regulation.
The New York City Council recently enacted The Fair Chance for Housing Act, set to take effect on Jan. 1, 2025, which will restrict criminal background checks against residential rental applications (LVT #33087). Under the new law, owners won’t be permitted to discriminate against individuals whose criminal cases didn’t result in a conviction, who have misdemeanor convictions older than three years, or who have felony convictions older than five years. The law includes some limitations on restrictions. In any event, the law prohibits landlords from running a criminal background check until after they've made a binding rental offer, and then the background check must be made in accordance with the new law.
Consistent with last year’s court ruling that—despite a prior settlement agreement to the contrary—the HSTPA subsequently barred deregulation of Stuyvesant Town units after J-51 tax benefits expired (LVT #32436), the DHCR recently ruled that HSTPA amendments superseded a prior court settlement that ended a rent-stabilized tenant’s preferential rent in 2020. In Matter of 510 E 6th Street LLC (LVT #33065), the DHCR ruled that despite a so-ordered housing court settlement ending tenant’s right to a preferential rent after his 2020 renewal lease expired, the HSTPA now required that the tenant continue to receive preferential rent offers upon renewal for the duration of his tenancy. The DHCR found that parties to a rent-stabilized lease could not compromise enforcement of the RSL by private agreement.
The DHCR continues to issue on a regular basis a number of PAR decisions concerning MCI rent increase disputes. In Matter of Phipps Garden Apartment Tenants Association (LVT #33060), where tenants of a 35-building complex argued that the owner had installed a new roof on only 12 of the buildings, the DHCR ruled that MCI work need not be performed at an entire building complex in order to qualify for building rent increases.
In Matter of 10 W. 65th St. Tenants Association v. DHCR (LVT #33083), the court upheld the agency’s determination that an owner could obtain MCI rent increases for installation of a new intercom system that had been approved by the DHCR in a prior service modification application proceeding.
In 71st St. Props. LLC v. DHCR (LVT #33082), a court refused to grant mandamus relief against the DHCR to compel the agency to make a ruling on an owner’s demolition application that had been pending without decision for over a year. In response to mandamus proceedings generally, the DHCR often will consent to issuing an administrative ruling within a specified time frame. But, in this case, the DHCR argued that the owner’s application was complex, was actively under review, and could require an evidentiary hearing to ensure due process was afforded to the other side. The court ruled for the DHCR, finding that a ruling in this case was a “discretionary” rather than a “ministerial” act, and therefore not subject to legislative time limits for making a decision.