By Jose Peralta
The districts that we represent have the largest concentration of rent-regulated apartments in New York City. Between our two districts, we have more than 123,500 units of vital affordable housing stock. In theory, the families living in these apartments should be afforded more protection from rising rents and less fear of being displaced. Unfortunately, this is not the case.
Rent Regulation was established to protect tenants and maintain stable communities by guaranteeing the right to a renewal lease and to prevent “unjust, unreasonable and oppressive rents.” However, over the years bad actors have found ways to exploit and manipulate our laws, which were enacted to protect tenants, to enrich themselves in ways that disproportionately affect communities of color and threatens the social fabric of our communities.
One provision, known as the “vacancy bonus,” has been exploited to push tenants out of their homes. This bonus provides landlords with the ability to increase rent up to 20 percent each time a vacancy of that unit occurs. It was originally established to encourage property owners to not deregulate their units, by keeping tenants in their units for a longer period of time. When a tenant chose to move out, it allowed the landlord to increase rent for the next tenant more in line with inflation. However, since the vacancy bonus creates a financial incentive to drive tenant turnover, many bad actors will push tenants out by refusing basic services or repairs and by harassing tenants.
These bad actors are able to do this because the law does not remove the incentive if the vacancy was caused by nefarious means. This must be addressed.
Another exploited protection is known as preferential rent, where rent is charged to a rent-stabilized tenant that is lower than the “legal” rent registered for the apartment. On its face, preferential rent can sound like a good deal. The problem is many tenants are purposely not made aware they are paying a preferential rent only to find out later that their rent can increase almost by double when its time for renewal. Far too often, constituents feel as if they have been scammed because bad actors have used preferential rent as a tool to jack up rents and cause voluntary eviction.
Our districts have some of the highest rates of preferential rent in the city. Roughly 26 percent of rent-stabilized apartments in Inwood and Washington Heights have preferential rent. In Jackson Heights, Woodside and Corona, the number is even higher at 37 percent.
Take the case of Diego M., a tenant in Woodside Queens who lives in a rent-stabilized apartment, but was shocked to see his rent increase $600 in his renewal lease. He was a victim of a preferential rent without even knowing. His preferential rent was $1,300 but his legal rent was $1,900. He now faces the impossible decision of leaving his apartment with his three daughters and wife or trying to get a second job to be able to stay in his home. If Diego and his family leave, the landlord will be able to charge the 20 percent eviction bonus and get closer to deregulating Diego’s apartment.
Other bad landlords illegally claim they are offering preferential rent, but are actually charging the regulated rent. Then, upon lease renewal, they raise the rent past the regulated price and in effect deregulate the apartment. This preferential rent “loophole scam” has led to hundreds of deregulated apartments.
My colleagues and I must stand up for our neighbors who are being forced out of their homes, and subsequently from their communities, because of these rent frauds. This is why we will not allow bad actors to receive the vacancy bonus if that vacancy is the result of harassment or neglect. We will work to enact tenant protections for those who are receiving preferential rent in cases where there is deception through a preferential rent scam, while pushing S.3712, which closes the preferential rent loophole. By doing this, we will eliminate the incentive for bad actors to push out tenants from their apartments. It is time to fight for our neighbors’ right to remain in their homes.
State Sen. José Peralta (D-East Elmhurst
State Sen. Marisol Alcántara (D-New York)