Deregulation Of Rent Stabilized Apartments NY

Deregulation Of Rent Stabilized Apartments

(Last Updated On: August 22, 2018)

In New York a rent stabilized apartment can be deregulated if the owner performs improvements on the apartment that increase the value of the apartment over a certain limit during vacancy.

 

Deregulating Rent Stabilized Apartments

Per New York State Housing & Community Renewal an apartment can be destabilized when the rent in New York City exceeds – $2,733.75 as of 2018. this amount is set to increase incrementally and should be verified.

Upon a vacancy, a landlord can do Individual Apartment Improvements, a percentage of the cost can be used to raise the rent of the apartment.

 

Percentages of Improvements for Rent Destabilization

If there are 35 units or less in a building, 1/40th of the construction budget is how much the rent can be raised. This is 2.5% or multiply your construction budget by .025

If there are more than 35 units in a building, 1/60th of the construction budget is how much the rent can be raised. This is 1.6% or multiply your construction budget by .016

Once the rent exceeds a certain limit the apartment is destabilized or deregulated.

The number of units applies to how many apartments in total are in the building regardless of how many units you are working on or how many are rent stabilized.

 

Rent Stabilization Deregulation Example 1 (35 units or less)

If a rent-stabilized apartment is being rented for $1,750 a month in a building with 10 units and a renovation with a construction cost of $40,000 is done. The landlord can raise the rent $1,000. This would make the rent $2,750 and therefore destabilizing the apartment.

Initial Apartment Rent – $1,750

Construction Cost – $40,000

Units in Building – 10

Percentage of Construction Cost Rent Increase – 1/40

1/40th  x $40,000 = $1,000

$1,750 + $1,000 = $2,750

$2,750 > $2,733.75.

The apartment can be destabilized.

 

Rent Stabilization Deregulation Example 2 (more then 35 units)

If a rent-stabilized apartment is being rented for $1,450 a month in a building with 40 units and a renovation with a construction cost of $80,000 is done. The landlord can raise the rent $1,333.33. This would make the rent $2,783 and therefore destabilizing the apartment.

Initial Apartment Rent – $1,450

Construction Cost – $80,000

Units in Building – 40

Percentage of Construction Cost Rent Increase – 1/60

1/60th  x $80,000 = $1,333.33

$1,450 + $1,333.33 = $2,783.33

$2,783 > $2,733.75.

The apartment can be destabilized.

 

Thank You for reading our blog post on Deregulating Rent Stabilized Apartments

We hope this was helpful. Please feel free to leave questions or comments below. If you would like to speak with an architect about a specific project you can Contact Us directly.

 

New York Architects, Jorge Fontan

Author Jorge Fontan AIA

This post was written by Jorge Fontan, a Registered Architect and owner of Fontan Architecture.

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