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Housing advocates and Democratic lawmakers in New York want to create more protections for tenants of rent-controlled apartments, but they are facing stiff opposition from property owners and the banks that lend to them.
Several proposals aimed at putting a lid on rapidly rising rents are under consideration in the state Legislature, including one that would abolish a provision that lets landlords raise rents on apartments by as much as 20% when they become vacant. A common complaint about the provision is that it encourages landlords to evict lower-income renters.
The legislation would cover properties throughout the Empire State, but it’s in New York City — by far the nation’s largest rental market — where the impact would be felt most acutely.
The Rent Stabilization Association, which represents property owners, has said that the changes would reduce landlords’ cash flow and prevent many from making needed repairs to older buildings, forcing them to raise rents on apartments that aren’t regulated by rent-control laws.
Bankers, meanwhile, worry that if the proposals become law, property owners could struggle to make loan payments and that some investors might lose interest in the city’s multifamily market.
Indeed, many investors appear to be sitting on the sidelines, waiting to see how the battle over the future of rent control plays out.
In the first quarter, total sales of multifamily properties within the city fell 59% to $2 billion compared with the fourth quarter, according to Ariel Property Advisors, a New York commercial real estate services firm. Year over year, sales fell 22%.
“The proposals would put in pretty significant changes...