Hi George,
Rent Controlled apartments are under the Maximum Base Rent Program
(MBR). That means a maximum is set every two years and rents can only
be raised up to the MBR (see the example below in fact sheet #22). In
regards to the $2000 limit that you mentioned, Rent Stabilized
apartments in NYC are deregulated when the rent reaches $2000 or more
and the tenants have an income of at least $175,000 for two years (see
below for more details). I've cut and pasted relevant sections, but
please click on the links for lots of info.
DHCR FACT SHEETS
#1 Rent Control and Rent Stabilization
"In NYC, rent control operates under the Maximum Base Rent (MBR)
system. A maximum base rent is established for each apartment and is
adjusted every two years to reflect changes in operating costs. Owners
who certify that they are providing essential services and have
removed violations may raise rents by up to 7.5% each year until the
MBR limit is reached."
http://www.dhcr.state.ny.us/ora/pubs/html/orafac1.htm
#22 Maximum Base Rent Program (MBR) Questions and Answers for Owners:
How much will a tenant have to pay?
"The rent that rent controlled tenants actually pay is called the
Maximum Collectible Rent (MCR). The MCR generally is less than the
MBR. By law, the MCR cannot be increased by more than 7.5% per year
for each year of the two year MBR cycle unless there are Major Capital
Improvements or individual apartment rent increases. For example, if a
tenant's rent (MCR) on 12/31/01 was $600, and the MBR was $700, then
on 1/1/02 (effective date of MBR) the rent (MCR) would rise 7.5% to
$645 and the MBR ceiling would rise by 10.5% (the 2002-03 MBR factor)
to $773.50. On 1/1/03, the MBR would remain the same (since MBRs cover
a two-year period), but the MCR would rise by another 7.5% to
$693.38."
http://www.dhcr.state.ny.us/ora/pubs/html/orafac22.htm
Rent Stabilization
"Both the Rent Regulation Reform Act of 1993 (RRRA) and Local Law No.
4 in New York City further provided for deregulation of high rent
apartments occupied by high income tenants. In New York City, Local
Law No. 4 provides for deregulation of apartments whenever the legal
rent for those apartments reach $2,000 or more and are occupied by
tenants with an income in excess of $250,000 in each of the two
successive years prior to the owner's application for deregulation.
Outside NYC, the RRRA provides for the deregulation of apartments with
legal rents of $2,000 or more on October 1, 1993 which are occupied by
tenants who either at that time or at a later date have an income in
excess of $250,000 in each of the two years preceding the owner's
application. See Operational Bulletin 95-3, "Implementing Rent
Regulation Reform Act of 1993 and New York City Local Law 1994, No.
4", for more details.
The RRRA of 1997 reduced the income threshold to $175,000 for New York
City and New York State effective January 1, 1998."
http://www.dhcr.state.ny.us/ora/pubs/html/orafac1.htm
#26 - Guide to Rent Increases for Rent Stabilized Apartments in New York City
http://www.dhcr.state.ny.us/ora/pubs/html/orafac26.htm
In addition, for your apartment to be stabilized it must:
* Have had a rent of less than $2,000, if you initially moved into
the apartment in 1993 or later..
http://www.dhcr.state.ny.us/ora/pubs/html/orafac1.htm
How do I find out what the previous tenant paid to check if MY rent is correct?
"First, you should make sure that the APARTMENT is indeed rent
stabilized. In some cases (e.g. rent over $2000, or if the building is
a co-op), the building may contain rent stabilized units, but not ALL
of the apartments in the building may be stabilized. Verify with the
landlord that the unit is rent stabilized. We have a list of rent
stabilized properties registered in the year 2000, but it is not
comprehensive."
http://www.housingnyc.com/html/resources/faq/rents.html#previous
You can check online to find out if your apartment is Rent Stabilized here:
Rent Stabilized Building Listings
http://www.housingnyc.com/html/resources/zip.html
List of all DHCR Fact Sheets (40):
http://www.dhcr.state.ny.us/ora/pubs/orafac.htm
RENT INFOLINE:
718-739-6400
http://www.dhcr.state.ny.us/general/contact.htm#phone
Rent Administration Borough and District Offices:
http://www.dhcr.state.ny.us/general/contact.htm#ora
I hope this helps. If you have any questions, please post a
clarification request *before* closing/rating my answer and I'll be
happy to reply.
Thank you,
hummer
Google Search Terms Used:
nyc "rent control"
nyc "rent control" $2000 |
Clarification of Answer by
hummer-ga
on
14 Apr 2005 09:03 PDT
Hi George,
Yes, I know, I only included the Rent Stabilization rules because they
seemed to be what you were describing. You stated in regards to Rent
Control, "The current law decontrols rental prices when the rent
reaches $2,000". That statement is incorrect and I needed to show you
that you were describing Rent Stabilization, not Rent Control. Rent
Control is entirely different and has no limits such as you described,
please see the first two links in my answer to see how it works.
1) How Rent Control works:
#1 Rent Control and Rent Stabilization
http://www.dhcr.state.ny.us/ora/pubs/html/orafac1.htm
#22 Maximum Base Rent Program (MBR) Questions and Answers for Owners:
http://www.dhcr.state.ny.us/ora/pubs/html/orafac22.htm
2) Find out which rule your apartment falls under.
"To determine if your apartment is under rent stabilization or rent
control, contact the New York State Division of Housing and Community
Renewal at (718) 739-6400 or (212) 961-8930."
Rent Control:
"If your building was constructed prior to February 1, 1947 and has at
least three units, you may indeed be in a rent controlled apartment.
Call the Division of Housing and Community Renewal (DHCR), the state
agency that administers the rent laws, at (718) 739-6400, to check."
http://www.housingnyc.com/html/resources/faq/rentcontrol.html
Rent Stabilization:
Rent Stabilized Building Listings
http://www.housingnyc.com/html/resources/zip.html
3) A Rent Controlled apartment will switch to Rent Stabilization when
it becomes vacant and if it's in a building with six or more units
(unless the rent is over $2000 in which case it would be deregulated).
If there are five or fewer units, it will no longer be regulated at
all.
What is the status of rent control?
"Rent control covers about 50,000 apartments occupied largely by an
elderly, low income population who have been in occupancy since July
1, 1971 or by their lawful successors. Apartments under rent control
become decontrolled upon vacancy. If the apartment is in a building
with six or more units it will generally fall under rent stabilization
upon vacancy. If in a building with five or fewer apartments it will
"go to market," that is, leave rent regulation and become a
market-rate rental. Even if the apartment is in a building with six or
more units, and it rents for more than $2,000 it will be fully
deregulated. Whether or not the legal rent has surpassed this $2,000
threshold may be determined in what is known as a Fair Market Rent
Appeal."
When will we see the last rent controlled apartment?
"The long-term trend is towards zero rent-controlled apartments, but
no one knows when that will exactly occur.
Here are some facts: At one point in the early 1950?s there were over
two million rent controlled apartments. The 1993 Housing and Vacancy
Survey (HVS) reported 101,798 rent controlled apartments. The 1996 HVS
reported 70,572, a decline of more than 30,000 units over three years.
In 1999 and 2002, only about 50,000 rent control units remained - so
the rate of decline slowed a bit."
http://www.housingnyc.com/html/resources/faq/rentcontrol.html
Fact Sheet #6 - Fair Market Rent Appeals
"In NYC, when a tenant moves out of a rent controlled apartment, the
apartment becomes decontrolled."
http://www.housingnyc.com/html/resources/dhcr/dhcr6.html
So to answer your question, "Does that income exemption also apply to
rent controlled apartments?", the answer is "no".
Yes, it is a confusing topic! Please let me know if you have any other questions,
hummer
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