Assemblymember Linda B. Rosenthal, Chair of the Assembly Committee on Housing, announced today that her legislation (A6216-B/S2980C) to strengthen rent regulation.
This has been signed into law. The law closes the “frankensteining” loophole, provides protections against fraud in rent overcharge cases, adds safeguards against false attempts to deregulate apartments, and imposes stiff penalties on owners who fail to file rent registration statements with the state.
“Through the use of legal loopholes and devious tactics, countless units have been removed from our rent regulation system,” said Assemblymember Rosenthal. “As we grapple with a growing housing crisis, we should be doing everything in our power to protect rent regulated units. I am proud that this law will help us to achieve that goal.”
Under the new law, when building owners combine two or more vacant apartments, or frankensteining, the new rent will be set at the combined rents of both previous apartments. If one of the apartments is rent-regulated, the newly combined unit will be rent-regulated. This change closes a loophole that has allowed owners charging exorbitant rates when combining apartments. The law further requires that owners claiming an exemption from rent stabilization for conducting a substantial rehabilitation of the building must seek approval from the New York State Division of Housing and Community Renewal (DHCR) within one year. The law was sponsored in the state Senate by Senator Brian Kavanagh.
Since 2019, the number of apartments reported to DHCR as rent-regulated has dropped by more than 100,000, indicating an increase in the use of tactics like frankensteining and failure to register rent-stabilized units with DHCR. Recent data, reported by The City, shows just 784,000 rent-regulated units reported to DHCR in 2022.
Rosenthal’s legislation will further protect against overcharges by creating a new standard for fraud in the context of rent overcharge cases. The law also increases the penalty imposed on building owners who fail to file timely rent registrations with DHCR.
“If we truly want to preserve access to affordable housing, closing loopholes that have been exploited to deregulate countless units should be among our first steps,” said Assemblymember Linda B. Rosenthal. “With the signing of this legislation, we have put an end to some of the most egregious schemes used by landlords to make a fast buck at the expense of rent regulated tenants.”