Landlords Register Tens of Thousands More Rent-Regulated Apartments Under Threat of Fines

This article was originally published on August 16 5 a.m. EDT by THE CITY

Landlords are registering tens of thousands more rent-regulated apartments than they have in recent years, as New York takes its first steps to enforce a law Gov. Kathy Hochul signed last year that created heavy new penalties for failing to file with the state.

The law’s passage followed reporting by THE CITY that exposed sharp declines in the number of registered rent-stabilized apartments — and highlighted instances in which landlords removed apartments and leased them at market-rate rent without state approval.

The state Division of Housing and Community Renewal is warning landlords who missed a July 31 registration deadline that they face fines of $500 per month per apartment — up from a one-time $10 surcharge that was rarely enforced.

So far in the 2024 cycle about 919,500 apartments, most of them in New York City, have had registrations submitted to the state by their owners. That’s up from between 750,000 and 800,000 on-time registrations in recent years. 

Now DHCR is sending about 11,300 notices to building owners who missed the deadline, reminding them of the steep cost of failing to record their rent-regulated apartments.

“Although these registration numbers are preliminary, they far exceed recent historical trends and are a testament to both the work of the Office of Rent Administration and the Governor and Legislature for strengthening penalties on building owners who fail to comply,” said Charni Sochet, a spokesperson for DHCR. 

“We expect registrations will continue to increase in time as building owners respond to the Notices of Delinquency.”

Michael Johnson, a spokesperson for the landlord association Community Housing Improvement Program, said the new figures show that “99% of rent-stabilized property owners have complied promptly with the new registration regulations.”

“We are certain the remaining 1% of cases will be resolved quickly. We know from member feedback that some delinquent notices were sent in error, citing delinquencies for units that don’t exist. We suspect those discrepancies will be resolved with DHCR,” he added.

The state keeps key rent regulation records and statistics closely guarded, only making individual apartment rent histories available to their tenants and landlords. (Here is THE CITY’s guide on how to request your own rent history.) As a workaround, the tenant technology project JustFix extracts and compiles information from property tax bills posted online by the New York City Department of Finance listing the number of regulated units in each building as provided by the state. 

Using the JustFix data, THE CITY probed the shrinkage of the state’s rent-regulated apartment roster following the state legislature’s 2019 passage of the Housing Stability and Tenant Protection Act, which closed nearly all pathways property owners had previously been entitled to use to formally remove apartments from rent regulation.

THE CITY published a map and database of apartments that had vanished from the registrations, and tenant organizers told THE CITY that they used these records to track down potential trouble spots.

Manhattan Assemblymember Linda Rosenthal (D-Upper West Side) said THE CITY’s data reporting allowed her for the first time to get a handle on the problem’s potential scope. 

She decided that her bill fixing issues in the 2019 rent law — including the so-called “Frankenstein loophole” that let combined apartments evade regulation — was an opportunity to address the missing-registration issue. “I have been harping with DHCR on this for years,” said Rosenthal. (Manhattan Sen. Brian Kavanagh sponsored the Senate version of the bill.)

She recalled a building on West 74th Street in her district where the owner years ago had converted stabilized apartments into short-term rentals after failing to register them — and her frustration that the state housing department did not act to ensure the apartments went back on the rent regulation rolls.

Correcting the problem has been notoriously difficult. Cumbersome procedures require a tenant to file a complaint alleging a rent overcharge, and then potentially years of agency review to determine whether or not a unit is in fact rent regulated.

Enforcing an expectation on all landlords that they register their apartments in the first place puts owners on notice that they’re being watched.

“If this works,” Rosenthal said, referring to the new penalties she helped put into law, “maybe it solves the problem.”

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