Landlords register more rent-controlled apartments to avoid fines

Thousands more rent-controlled apartments have been registered with New York State this year after a new law was passed last year that penalizes landlords who don’t register their apartments, The City first reported. So far, about 919,500 apartments have been registered in 2024, compared to 750,000 to 800,000 registrations in recent years.

The law, signed by Governor Kathy Hochul, came after the city saw a drastic decline in the number of registered rent-controlled apartments and uncovered numerous cases in which landlords illegally deregulated apartments and rented them at market rates in violation of a 2019 state law.

The state Department of Housing and Community Renewal (DHCR) will fine landlords who fail to register by the deadline $500 per month per unit. Previously, the penalty was a one-time $10 fee that was rarely charged.

The DHCR is sending approximately 11,300 notices to property owners who missed the deadline, alerting them to the costly consequences of failing to register their rent-controlled apartments.

“Although these registration numbers are preliminary, they far exceed recent historical trends and are a testament to the work of the Office of Rent Administration as well as the Governor and the Legislature in increasing penalties for building owners who do not comply with the regulations,” Charni Sochet, a spokesperson for the DHCR, told The City.

“We expect registrations to continue to increase over time as building owners respond to late payment notices.”

In 2019, the state legislature passed the Housing Stability and Tenant Protection Act, a package of bills that provides new protections for renters. The law also ended the vacancy rule, which allowed property owners to deregulate vacant apartments once rents reached $2,774 per month.

Despite the lifting of vacancy regulations, the number of apartments with rent-controlled offers fell from 974,000 in 2019 to 858,000 by November 2022, according to DHCR data.

To find out this discrepancy, the city visited a building in Prospect Heights in December 2022 whose property tax bill showed a total of 16 rent-controlled apartments in June 2019, 10 in 2020, and only six in each of the following years.

The city then contacted about half of the tenants living in the building, most of whom had moved into the building within a year prior and were unaware that their apartments were once rent-controlled. Four of the tenants requested rental history records from DHCR, which revealed that their landlord had deregulated their apartment’s rent after the rent exceeded $2,774 per month.

The documents showed that all four apartments were under rent regulation between 2018 and 2019 and were renovated in 2020.

The rental history for two of the apartments showed a “high vacancy rate” as of October 12, 2020, although the vacancy limit was lifted in June 2019 and both units did not exceed the rental threshold.

Because it is difficult to access government records and statistics on rent regulation because the rental history of individual apartments is only available to tenants and landlords, the tenant technology project JustFix has created a solution. The project extracts and analyzes information from property tax notices posted online by the city’s tax office that list the number of regulated housing units in each building.

The city responded by creating an interactive map and database of apartments that had disappeared from the registry. Tenant organizers have used these tools to identify potential violators.

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