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Implementing rent increases in NYC can initially seem daunting. Various statutes govern different classifications of residential rental properties, each with its own set of qualifications and regulations.
To go about the process, landlords must determine whether they are renting out regulated or unregulated housing units.
In this article, we will explain how rental units in the private market are classified and explore rent regulation guidelines regarding how much you can raise rent in NYC.
How much can you raise rent in NYC?
The amount by which you can raise rent in NYC boils down to the classification of the property you are renting out:
- Rent-stabilized units – Six or more units in a building constructed before 1974 with tenants renting after June 30, 1971. Permissible rent increases on lease renewals are determined annually by the NYC Rent Guidelines Board for the period beginning Oct 1 of the current year up to Sept 30 of the following year. Most recent increases averaged 2.75% – 3% for an annual lease.
- Rent-controlled units – Units in residential buildings built before 1947 with tenants having continuously occupied the same unit before July 1, 1971. Rent increases are subject to the Maximum Base Rent (MBR) protocol employed by the Division of Housing and Community Renewal (DHCR) and are modified every two years.
- Free-market or unregulated units – Apartments not subject to specific controls or limitations imposed by government. No increase can take effect unless a lease expires, after which the landlord may raise rent based on current market conditions and demand. If the rent increase is more than 5%, written notice must be sent to the tenant following the prescribed period.
What is the rent cap in NYC?
Rent caps only apply to rent-stabilized apartments in New York City. Here’s a quick summary of current and upcoming rent caps determined by the NYC Rent Guidelines Board:
- 3% for a one-year lease entered into from Oct 1, 2023 to Sept 30, 2024
- 2.75% and 3.2% respectively for a two-year lease entered into from Oct 1, 2023 to Sept 30, 2024
- 2.75% for a one-year lease entered into from Oct 1, 2024 to Sept 30, 2025
- 5.25% for a two-year lease entered into from Oct 1, 2024 to Sept 30, 2025
NYC rent increase laws for 2024
Good Cause Eviction Law
Although not necessarily a rent increase law per se, the recently enacted Good Cause Eviction Law contains some provisions on what is considered reasonable and unreasonable rent increase.
While the law focuses primarily on non-payment of rent as a good cause for evicting a tenant, it follows through with a specific condition: “unless the rent is unreasonable.”
Technically, the Good Cause Eviction Law quantifies reasonable rent increase by providing a rent cap for qualified market rate apartments not subject to rent regulations.
According to the law, any increase is deemed unreasonable if it is above above 5% plus the inflation index or 10%, whichever is lower. So if the current CPI is 2.2%, the most a free market landlord can raise rent is by 7.2%.
How often can a landlord raise rent in NYC?
Landlords in NYC can raise rent only when leases expire, with rules varying by unit type. Rent-stabilized units allow annual increases at lease renewal based on Guidelines Board rates. Rent-controlled properties get increases every two years.
For unregulated units, landlords must wait for lease expiration and provide 30-90 days’ notice for increases above 5%.
Rent increase notice in NYC by government
The Housing Stability and Tenant Protection Act of 2019 contains specific guidelines on issuing notices of rent increases or lease non-renewals. Landlords are required to send written notice to their tenants if they intend to increase rent by 5% or more in a non-regulated rental.
Moreover, landlords should send these notices following a prescribed period determined by a tenant’s length of occupancy. This even applies to month-to-month rentals without a lease:
- Less than one year: 30 days advanced written notice
- More than a year but less than two years: 60 days advanced written notice
- Two years or more: 90 days advanced written notice
Does NYC have rent control?
Yes. While rent control is gradually being phased out, there are still over 16,000 rent-controlled units in NYC. Landlords typically raise rent on these properties based on the lower of the average of the five most recent Rent Guidelines Board annual rent increases or 7.5%.
Can a landlord raise rent by more than 10% in NYC?
No, raising rent by more than 10% is considered unreasonable according to the Good Cause Eviction Law enacted in April 2024.
While landlords of rent-regulated units have rent increase guidelines to stick to, those renting out market rate units don’t have rent caps to follow. However, Good Cause recommends raising rent by 5% + CPI or 10%, whichever is lower.
What are the new rental laws in NYC 2023?
Housing Stability and Tenant Protection Act of 2019
The 2019 Housing Stability and Tenant Protection Act made big changes to New York’s old rent control laws. Its main goal was to better protect tenants and keep apartments under rent stabilization rules.
For decades, laws made it easy for landlords to deregulate apartments. This new act went the other way – stopping tactics landlords used to get out of rent stabilization requirements.
One major change – it became much harder for landlords to take an apartment out of rent stabilization once the legal maximum rent went above a certain high level. It put limits on raising preferential rents (where the actual rent is below the legal maximum) up to the higher legal regulated rent when renewing a lease.
HSTPA also removed rules that exempted apartments from rent stabilization when they became vacant or the tenant’s income got too high. The act also closed many loopholes landlords used to hugely raise rents after renovations.
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