Like many global cities, New York City is no stranger to gentrification, rising rent prices and inflated cost of living. With some of the most expensive real estate prices in the world, the Big Apple and its millions of citizens are struggling to keep up with what are dubbed as ‘predatory equity owners’ – landlords who buy up high value real estate with the plan to recoup their investment once rent-controlled and rent-stabilized units are deregulated and can be leased at market price. As of September 2016, average rent in New York City reached US $3226, almost US $200 more than the average for the same month in 2015. In a bid to protect tenants against tactics used by landlords to push them out of rent-controlled or rent-stabilized apartments, the City Council has proposed a series of bills designed to safeguard renters from harassment and unfair evictions.
“Tenants are more than ever fearful of gentrification, rising rents and displacement, and actions by predatory landlords and lenders are aiding these fears,” says Bronx City Councilman Ritchie Torres, who went on to call the new legislation the first-of-its-kind. Some common tactics used by such landlords to push tenants out of potentially-valuable real estate include charging fees on top of contractual rent, allowing the building to fall into disarray and filing for demolition or construction permits but never actually undertaking any work once tenants have left.
To combat the ever-growing issue of evictions and rental hikes, New York City Councilmen Ritchie Torres, Dan Gardnick and Jumaane Williams propose three specific bills. The first calls on the Department of Housing Preservation (HPD) and Development to create and maintain a ‘watch list’ of landlords known to engage with predatory tactics, with assistance from the Department of Finance to get financial information on buildings. However, this proposal was met with some criticism from HPD during a city council hearing – “Not all owners who enter into overly optimistic or poor investments intend to, or do, disrupt the lives of tenants or engage in bad behavior. And even owners who intend to try to convert rent-regulated units to higher rents may stop short of engaging in harassment, neglect or other displacement tactics,” says Vito Mustaciuolo, Deputy Commissioner for the Office of Enforcement and Neighborhood Services at HPD, according to DNA Info.
The second proposed bill would see tenants that allege harassment in buildings known to have a high debt-to-income ratio automatically gain more credibility in court. This would go as far as to believe the tenants’ allegations unless the landlord can prove otherwise. HPD’s Mustaciuolo, however, objected once more saying “the debt service coverage ratio alone does not tell you whether an owner is likely to engage in illegal or irresponsible behavior,” adding that this bill would overburden the agency.
Finally, the third bill attempts to expand an existing law which allows the City to foreclose and sell off ‘distressed’ buildings to make it include buildings whose owners have large numbers of building violations. This, the City Council hopes, will put pressure on repeat offenders or those with outstanding fines to curb the violations which are often left unaddressed to push out renters. On this point, the HPD has already been working with the City Council within a task force designed to study the issue to come up with reforms for the sales of distressed properties.
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