What Happens to My Rent When the Building's Tax Benefit Expires?

New York Times

08-02-2025

Q: We rent a market-rate unit in a building in Manhattan with 421-a benefits, which expire in July 2026. This has allowed us to enjoy the benefits of rent stabilization for a limited time. Our lease expires in March 2026, and our unit will no longer be under rent stabilization as of July 2026. Will we receive another rent-stabilized lease that March? Will it be for one year or two years? Once the 421-a benefits expire, will they simply not renew our leases, or change the rent to whatever they want?
A: New York's 421-a program is designed to incentivize developers to build dwellings in exchange for partial tax benefits over a period of time. When a rental building receives this benefit, its units can be subject to rent stabilization and the rights that come with it.
If your unit is rent stabilized when you sign your new lease next March, then you, not your landlord, will be able to choose whether to renew for one or two years.
The building owner must include information about the 421-a tax benefits in a lease rider. Once the benefits expire, your rent-stabilization protections will end when your lease ends, as long as the riders were included in every lease packet. At that point, your rent would increase.
The first thing you should do is look back on every lease you have received for this apartment. If there is not a rider with each one informing you of the tax benefits, and the anticipated date of the upcoming deregulation, printed in 12-point font, then your unit could be rent stabilized until you or a lawful successor permanently vacates, said Samuel R. Marchese, a partner at BurgherGray in New York.
Once your unit is no longer under rent stabilization, New York state's Good Cause Eviction Law could protect you from eviction or from a landlord who declines to renew your lease without good cause. The law protects market-rate tenants, though it has exceptions.
'And of course, the tenant must not engage in conduct which would be 'good cause' for an eviction, such as nonpayment of rent or violating other terms of the lease,' said David A. Kaminsky, a real estate lawyer in New York.
The law also protects against eviction for nonpayment of rent in the case of unreasonable rent increases. Rent increases are deemed unreasonable when they exceed the rate of inflation plus 5 percent. But again, there are exceptions, such as if the landlord has done work on the building. The state housing agency publishes the reasonable rent increase by Aug. 1 every year.