Statewide Rent Control In New York

General Landlording & Rental Properties
7yFollow

Statewide Rent Control In New York

Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes

How do you think statewide rent control will effect cities in upstate New York like Buffalo, Syracuse, and Rochester? I know that they suffer from similar issues as Midwest rust belt cities. 

Going even further, small towns and rural areas will all be subject to rent control as well. It seems like huge over reach. Pushing through something like that as though the entire state is NYC and has sky high rents. Very short-sighted.

https://www.rochestercitynewspaper.com/rochester/state-may-get-strong-rent-laws/Content?oid=10375525

Podcast Guest on Show #21
1Reply
103 views

Most Popular Reply

Stephanie JacobsonBusiness Member
Real Estate Agent · Ithaca, NY · Member since 2016 · 427 posts · 323 votes
7y

There's definitely a lot of confusion about this. I'm in Binghamton and Ithaca, so I can only describe the reaction I've seen here (mainly in Bing), and it hasn't been good. The one bright side is that the rent control part did NOT pass, so we don't need to worry about that. It's the Good Cause clause that has everyone messed up.

They still don't know how it's going to shake out, but the courts here are frozen through the end of the month. They'll start hearing eviction cases then, maybe, or might push them back to August. I have one client who is selling his entire portfolio (25 buildings, 300 units) and gettin' the heck outta dodge. I have other investors who aren't worried at all and just keep buying.

Like @Michael Craig said, the big impact is going to be on actually getting the non-performing tenants out, not necessarily on what you can charge for rent. This was passed without any consent from upstate, really, so there's already a lot of backlash. 

4Reply
See this reply in the discussion

19 Replies

Jump to latestLatest
  • Alex Jones
    Rental Property Investor · Rochester, NY · Member since 2013 · 162 posts · 127 votes
    7y

    @Anthony Gayden great question and we all are closely following the news and reaching out to our representatives and building strong voices. For my side of business I always buys low and keep my rental properties affordable.

    Alex

    0Reply
  • Austin Welty
    Farmington, NY · Member since 2016 · 13 posts · 7 votes
    7y

    For someone new to the industry: Could you give a quick summary of the potential impacts this could have for landlords and REI?

    0Reply
  • Michael Craig
    Rental Property Investor · Saratoga Springs, NY · Member since 2017 · 238 posts · 200 votes
    7y

    @Austin Welty

    Potential impacts include:
    -Eviction process becomes extraordinarily difficult  (more so than it already is). 

    -Reason's for evictions become limited - even though it is your property, you won't be able to evict someone just because you want them out, regardless of how much notice you give them. 

    -NY can cap how much you charge/raise rent, regardless of how "undervalue" the rent is

    Essentially, it is no longer a free market if the law makers achieve what they are trying to achieve.

    2Reply
  • Austin Welty
    Farmington, NY · Member since 2016 · 13 posts · 7 votes
    7y

    Thanks @Michael Craig. A few follow on questions:

    - Would you still be able to evict for big ticket items, IE not paying rent? 
    - Would this prevent you from forcing a tenant out via not renewing their lease?

    "With all of the controls, municipalities would need to opt in to the bills' coverage. The new laws wouldn't be imposed on them." - I'm new to NY state, do the municipalities generally get on board? 

    1Reply
  • Michael Craig
    Rental Property Investor · Saratoga Springs, NY · Member since 2017 · 238 posts · 200 votes
    7y

    @Austin Welty

    From my understanding, tenants in rent controlled areas cannot be evicted just because, there needs to be  "good cause" ie. non payment of rent, etc. Not renewing the lease is not "good cause", therefore you cannot evict on those grounds. 

    I guess we really won't know the true outcome until the legislation is passed. Just know that rent control achieves the opposite of what it is intended to do.

    0Reply
  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    7y

    @Anthony Gayden

    If there weren't already enough reasons to keep you out of New York investments, here is another one.

    It's incredibly short-sighted, and makes the already difficult task of owning property that much harder. There will be institutional players that make a conscious choice to manage (and profit from) the inefficiencies of the legal process. For a regular operator, it's an uphill fight, and completely unnecessary. 

    I always say: "Make your money here and get it out of the state as fast as possible." I stand by what I have said in the past.

    1Reply
  • Allan Szlafrok
    Rental Property Investor · Long Island, NY · Member since 2015 · 490 posts · 301 votes
    7y

    @Anthony Gayden Yes it will remove any incentive for anyone to develop anything besides ultra high end new construction which there is no market for upstate. There will be less incentive for people to upgrade existing properties as well which is terrible for the economy. The only thing that will make sense to build will be high end condos with tax abatements and rent control exemptions, none of which will be built outside of NYC and the surrounding suburbs. It’s going to be really bad for upstate, bad for current property owners state wide, but great for developers who can get those abatements even if they have to set aside a certain percentage as “affordable” housing. Decades of rent control and still some of the highest housing costs on earth tell you all you need to know about how effective this new legislation would be in curbing the high cost of living in NY. It’s gonna backfire badly if passed as it always does. But let’s see what happens June 15.

    2Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    7y

    In California, we saw a beat-down on the most recent attack on  the statewide Costa-Hawkins Act - which, among other things, excludes SFHs (including condos) from municipal rent control laws.   If sanity can prevail in Cali, I have good feelings about NY.  

    1Reply
  • Mark Ostertag
    Real Estate Investor · Rochester, NY · Member since 2014 · 18 posts · 4 votes
    7y

    How bad is this actually? I'm sure it's not good, but does it make investing here a bad idea altogether?

    I am in Rochester and starting out investing myself. While I want to have my eyes wide open, I don't want to be discouraged from entering the business altogether because it is a little less advantageous.


    I did a bit of reading yesterday and found this article right here on biggerpockets. I'm sure the article is rather optimistic, but the system does sound manageable? I'm interested in Buy & Hold, which the article seems to be interested in anyway.
    https://www.biggerpockets.com/blog/rent-controlled-properties

    0Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    7y
    There has been rent control in NY and Buffalo specifically for many years. The rent control applies to specific areas, specific apartment complex’s and even sometimes specific tenants. Rent control apartment buildings are all dilapidated because the revenue is caped and there is no incentive to invest in the property. Rent control so far has basically had 0 affect on investing in Buffalo. Just don’t invest in a rent controlled building.
    Irish Jones Realty4.947 Reviews
    View Page
    2Reply
  • Jim Campbell
    Specialist · Buffalo NY (buffalo, ny) · Member since 2019 · 42 posts · 32 votes
    7y

    I personally have rent control in all my buildings... I own them, therefore i control the rent...

    1Reply
  • William Coet
    Lititz, PA · Member since 2013 · 595 posts · 272 votes
    7y

    The rent control properties will undoubtedly be worth less than if they were market rate buildings. The state should prepare for a dramatic decrease in property tax revenue.  This is the state taking over private property.  Similar to what happens in communist dictatorships.  It is designed to win votes for corrupt politicians, not to improve the economy.

    \

    3Reply
  • Kara LeboeufPro Member
    Rental Property Investor · Glens falls, NY · Member since 2013 · 124 posts · 50 votes
    7y

    @William Coet well it is New York State so...

    3Reply
  • Wesley W.
    Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    7y

    They are doing great things here for people in the Vampire State.

    Well, that's what they tell us, anyways.  Thing is, they aren't doing anything to help me or my family, and I personally don't know anyone who's employed that's been "helped" by their hypertaxation and regulation.

    I guess they ARE helping people find new homes.  

    Thing is, those homes are in other states...
    https://www.democratandchronicle.com/story/news/politics/albany/2018/12/19/leaving-new-york-population-loss-steepest-u-s/2362167002/

    4Reply
  • Ryan Mayes
    Rental Property Investor · Albion, NY · Member since 2015 · 5 posts · 15 votes
    7y

    If they would lower my property taxes(village,county,school and state) then maybe I could lower rents? When taxes are more than the mortgage on a property there is a problem.....and lets not even start on the infrastructure here in western ny

    3Reply
  • Stephanie JacobsonBusiness Member
    Real Estate Agent · Ithaca, NY · Member since 2016 · 427 posts · 323 votes
    7y

    There's definitely a lot of confusion about this. I'm in Binghamton and Ithaca, so I can only describe the reaction I've seen here (mainly in Bing), and it hasn't been good. The one bright side is that the rent control part did NOT pass, so we don't need to worry about that. It's the Good Cause clause that has everyone messed up.

    They still don't know how it's going to shake out, but the courts here are frozen through the end of the month. They'll start hearing eviction cases then, maybe, or might push them back to August. I have one client who is selling his entire portfolio (25 buildings, 300 units) and gettin' the heck outta dodge. I have other investors who aren't worried at all and just keep buying.

    Like @Michael Craig said, the big impact is going to be on actually getting the non-performing tenants out, not necessarily on what you can charge for rent. This was passed without any consent from upstate, really, so there's already a lot of backlash. 

    4Reply
  • Wesley W.
    Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Stephanie Jacobson:

    This was passed without any consent from upstate, really, so there's already a lot of backlash. 

     What else is new?  We're the serfs.

    1Reply
  • Thomas Dougherty
    Member since 2019 · 135 posts · 25 votes
    7y

    This is a very good question, and we are all following the news closely, contacting our representatives and building a strong voice. For my business, I always buy low and keep my rental property affordable.

    0Reply
  • William Coet
    Lititz, PA · Member since 2013 · 595 posts · 272 votes
    7y
    It seems inevitable that the property tax revenue will decrease because people will be forced to pay less for property and assessments will go down.  I'd like to hear a differing opinion if one exists.
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free