In a transient, vibrant market like ours, approximately 76% of NYC housing inventory is made up rentals: 65% coming from rental buildings outright, with the remainder from condo and co-op rentals. Interestingly, a whopping 51% of those units in Manhattan are rent-stabilized. (This percentage is 42% in Brooklyn, 42% in Queens, and 59% in the Bronx.)
So what does rent-stabilization get you and what should you watch out for?
- Limited rent increase potential: there is a cap on the amount of rent increase that a landlord can impose upon the renewal of the lease. For example, as of June 23, 2009, any lease for a rent-stabilized apartment commencing between October 1, 2009 and September 30, 2010 will have a maximum increase of 3% for a one year lease and 6% for a two year lease. These limits are set every year and are intended to protect tenants from exorbitant rent hikes or greedy landlords.
- Semi-guaranteed renewal rights: you are basically guaranteed a right of renewal of your lease, short of any egregious acts that would warrant an actual eviction. (Note that this is unlike co-op rentals, condo rentals, and non-stabilized units where landlords can choose to not renew your lease.) This feature is a significant plus for those looking for a long-term home without the risk of having to move when your lease expires. Due to this feature, you will often find it easy to sign a 2-year lease for rent-stabilized apartments, as landlords can’t kick you out yet you are committing to stay put for 2 years. Remember this in your negotiations process.