Finding an affordable place to live is hard in New York City, but it’s even harder here in the Bronx where barely 3 percent of the borough’s 527,000 units are even available.
Low vacancy typically means demand for apartments is much higher than what’s available. And in a landlord’s market like that, one doesn’t have to imagine which direction prices are going.
But even with 1.5 million people needing space to call their own each night, there are just so many potential renters out there who can shell out high rental rates.
And that’s where preferential rent is born. For a typical landlord, it’s better to rent out an apartment to someone rather than no one, even if that someone ultimately pays less than what the landlord had hoped to get.
This can be great news for a tenant in such a situation, finding a home for below the value a landlord is actually allowed to rent for. It’s money that can go into other household and life expenses, or even kept in a savings account.
But situations can change in a year. When it’s time for the lease to be renewed, the landlord is not bound to the small percentage increases required by the city — they have the right to immediately bring that rent up to their legal maximum.
If your rent was $1,500, but the landlord was permitted to charge $2,000, the landlord has every right to increase rent by that much when the lease renews — a jump of 33 percent, or $6,000 per year.
Even if the landlord has no intention of raising the rent that much at lease-renewal, the fact that the landlord can is more than enough to keep tenants quiet when it comes to problems with their unit or their buildings. Speaking out could earn the ire of the landlord, who has all the power in making an affordable rent suddenly disappear.
According to Curbed New York, landlords’ ability to suddenly raise rents in such a way didn’t exist until then-Gov. George Pataki pushed a bill in 2003 that at least one Democratic legislator called a “declaration of nuclear war on rent-regulated tenants in New York.”
Efforts to repeal the law have gone nowhere in the years since, especially since Republicans maintained significant influence in Albany. Those days are over, however, and Bronx borough president Ruben Diaz Jr., is joining a chorus of voices calling for this preferential rent loophole to be over as well.
Brooklyn Assemblyman Steven Cymbrowitz introduced a bill this week which once again tries to end this practice once and for all. It has a number of co-sponsors already, including Assemblyman Jeffrey Dinowitz.
If passed in its current form, landlords would be required to follow rent increase guidelines as if they already were at the maximum rent. They could only jump up to the max if the apartment is vacant — and not through a constructive eviction.
There’s no need to wait. It’s time to end the war.