Real Estate in NYC remains a very busy sector in NYC. Rental apartments are always hunted by potential tenants. It creates a lot of demand for rental apartments. To meet that demand, we see builders and corporations rise to the occasion and fulfill demand efficiently.
When we look at the rental buildings on offer, we see a lot of variety, both in the apartment structure and the management structure. You would easily find what you look for, from a traditional rental apartment to no-fee apartments and rent-controlled apartments.
Rent-controlled apartments are a type of housing where the public authority or neighborhood specialists limit the sum a landowner can increase the rent every year. These guidelines mean safeguarding tenants from unreasonable rent hikes and giving reasonable lodging choices.
Rent control commonly applies to more established structures or units. The rent increments are generally attached to explicit rules not set in stone by the administering body. The goal is to keep tenants in affordable, stable housing, especially in high-demand areas with rising rents.
Apartments were built before February 1, 1947, in areas where municipalities still carry postwar rental housing emergencies. You would find rent-controlled apartments in those municipalities. In NYC, rent-controlled apartments are occupied since July 1, 1971.
Rent-controlled apartments have some benefits over conventional rentals such as they are not required to sign renewal leases and the eviction process is regulated.
Note: If no one qualifies for the criteria and the owner dies without transferring to a lawful successor. The unit is removed from the rent-controlled and shifted for general lease.
On the other hand, rent-stabilized apartments are those which were built before 1974 and still follow the rules. The chief advantage of having a rent-stabilized apartment is that landlords can only increase the rent by a certain proportion. The limit is already set so you would not have any unexpected increase.
Another perk of having a rent stabilized apartment is that there is a lease guarantee. You would not get to know by seeing an advertisement that it is a rent stabilizer or not, but you can reach the conclusion based on the price and history of the building.
Maximum Base Rent (MBR) is a system that governs rent-controlled apartments in NYC. It designates the authority to the Division of Housing and Community Renewal (DHCR) which makes policy to set maximum base rent for every apartment along with a maximum collectible rent. To adjust to the increasing prices of rents, the maximum base rent is reevaluated every second year and changes are made to it.
However, if tenants feel like stripping of any basic right or feel like a violation of any law, they can challenge the maximum base rent.
Rent control apartment traces their roots in the post-World War I scenario when there were not enough apartments in the city to accommodate everyone and increased demand spiked the rents to sky-high. To address the issue, New York State passed on new legislation which was headed to control rents in the city and discourage baseless evictions.
Since then, several new legislations were made to effectively regulate the program. But as for now, it is no more functional and is only available when someone inherits a rent-controlled apartment.
An interesting feature is that rent-controlled apartments can be given as an asset to the next generation when the current tenant dies. However, to qualify for inherent rights; the family member must live in the apartment for at least two years before the death of the current occupants.
As per the stats furnished by the New York City Rent Guidelines Board, there are almost 27,000 rent-controlled apartments in NYC. They are home to mostly elderly, low-income people who have occupied the units since July 1, 1971, or as legally inherited occupants.
There are several advantages to having a rent-controlled apartment. The chief advantage is that the rent prices stay stable and there is a minimum increment yearly.
In addition to it, it is guaranteed that the lease will be renewed. People do not have to leave it because of expensive rents and it gives them a sense of security. It provides one of the most affordable housing options in NYC.
It is not good from an investment point of view as owners won’t be able to make good profits. And it does not appeal to landlords to spend on maintenance since it would cost money and the landlord would not be able to increase rent.
As we move forward, rent-controlled apartments are decreasing fast in number. In 50 years, numbers dropped from 2 million to merely 22,000 apartments. And if you are not a family member of an owner and do not meet the criteria, you cannot move into a rent-controlled apartment.