One of the many clouds that has been hanging over New York real estate is the prospect of “Good Cause Eviction” (“GCE”) becoming law statewide. While GCE stalled in the New York State Legislature’s most recent session, its fervent supporters are continuing to advance GCE.
GCE, if enacted, would subject almost all of New York’s free-market apartment stock to, in essence, universal rent control. The GCE scheme would, of course, overlay New York’s existing system of rent stabilization which, broadly speaking, applies to apartments in buildings containing six or more units and constructed prior to 1974 as well as newer buildings participating in certain tax benefit programs (such as the 421-a and 421-g programs). As proposed, the only exception to GCE would be owner-occupied buildings with fewer than four units.
As proposed at the state level, GCE would, among other things, prohibit landlords from evicting a tenant, subtenant or occupant, including a hotel room occupant, without showing good cause — even if the occupant does not have a valid lease. “Good cause” includes, among other things, failure to pay rent — unless the tenant received a rent increase that was “unreasonable,” which is defined as an annual increase of more than three percent or 1.5 times the increase in the consumer price index, whichever is higher. In fact, every tenant must be offered a renewal lease at a rent that is not “unreasonable.” Other bases for “good cause” eviction include, among other things, violation of a substantial obligation of the tenancy, causing a nuisance, or using or permitting the apartment to be used for an illegal purpose. Nevertheless, GCE, as envisioned by its sponsors, operates as a parallel rent control scheme, entitling tenants in covered apartments to renewal leases at specified rents and prohibiting evictions except in enumerated circumstances.
Notwithstanding the continual talk of GCE in New York real estate circles, GCE did not have widespread support in the Legislature’s Democratic majority caucuses, and therefore stalled in committee before the Legislature adjourned.
Nevertheless, GCE’s proponents recently scored a victory when the City of Albany’s Common Council voted to approve GCE on July 20. While Albany’s maximum rent hike is slightly higher (5%) than the state version of GCE, tenant advocates saw the vote as a major victory and have vowed to push for GCE in other cities around the state.
We will continue to follow the GCE bill status in the New York State legislature. If you would like to discuss GCE, any other bills in the Legislature, or any other aspect of New York law, please do not hesitate to call us.