As we turn the calendar to 2022, two issues currently dominating the attention of the New York real estate industry are the fate of the eviction moratorium (currently set to expire on January 15, 2022) and the possible statewide enactment of Good Cause Eviction (GCE). As the New York State Legislature reconvenes next month, it appears that, at least on the residential side, some in the Legislature have linked the two issues and view GCE as a replacement for the moratorium.
Earlier this week, State Senator Brad Hoylman announced a committee hearing on the GCE bill (S3082) on Friday, January 7, 2022 at 11:00 a.m.
The bill can be found by clicking here to read.
The bill applies to all residential apartments in New York State, except for owner-occupied buildings with fewer than four units, as well as apartments which are already subject to rent regulation. GCE provides, in sum, that unless an owner establishes one of several specified grounds for removal, “No landlord shall remove a tenant from any housing accommodation, or attempt such removal or exclusion from possession, notwithstanding that the tenant has no written lease or that the lease or other rental agreement has expired or otherwise terminated. . .” The grounds for removing a tenant under GCE include, among other things, (1) nonpayment of rent (provided that the rent is not the result of an “unreasonable rent increase,” defined as “a percentage exceeding either three percent or one and one-half times the annual percentage change in the Consumer Price Index for the region in which the housing accommodation is located”); (2) violation of a substantial obligation of the tenancy; (3) nuisance; (4) illegal use; (5) refusal to provide access; and (6) owner’s use as a primary residence (but with significant limitations detailed in the bill).
The bill would create, in effect, nearly universal rent control and, except for very small owner-occupied buildings, the notion of a free-market residential apartment will be a thing of the past in New York State. While various industry representatives are working to oppose the bill because of its potential deleterious impact across the real estate industry, including stalling new development, delaying upgrades and improvements and reducing municipal tax revenue, we recommend that owners also contact their elected representatives to register opposition to GCE and detail the negative effects it will have on their properties and on New York State more generally.
As detailed in this article, tenant activists have sought, with some success, to pass GCE at the municipal level in several cities across the state in order to attempt to generate momentum for GCE at the state level. Further action on GCE may be coming soon after the January 7 hearing: “Senator Salazar‘s office said they hope to pass the good-cause bill early in the session, worrying that the end of the eviction moratorium on January 15 and people’s reduced incomes from the persisting pandemic might open the floodgates for evictions.”
We will be monitoring GCE’s prospects in the Legislature very closely. In the interim, please reach out to your attorney at Rosenberg & Estis, P.C. with any questions about how GCE could affect your properties.