Andrew Cuomo Proposes 'Zohran's Law' To Fix the Unfairness of Rent Law Cuomo Signed

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Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include:
Andrew Cuomo's remarkably hypocritical attacks on Zohran Mamdani for living in a rent-stabilized apartment.
A nonprofit tiny home builder's court victory over a Georgia town's large home mandates.
Why Blackstone buying homes is good, actually.
Andrew Cuomo Made New York Rent Control More Favorable to the Wealthy. Now He's Going After Zohran Mamdani for Living in a Rent-Stabilized Apartment.
The personal attacks in New York City's general mayoral election are hitting close to home.
Over the past few days, Cuomo has repeatedly attacked Mamdani, who bested him already in the Democratic primary, for living in a rent-stabilized apartment despite earning a comfortable $140,000 as a New York assemblyman.
"It's an abuse of the system," said Cuomo in a video clip posted to X on Sunday. He's proposed a new "Zohran's law" that would exclude higher-income earners from rent-stabilized apartments. His proposal would require it so that vacant, rent-stabilized units could only be taken over by tenants for whom the rent is at least 30 percent of their income.
Mamdani's campaign has shot back that Cuomo is merely mudslinging. Mamdani himself told The New York Editorial Board back in February that he and his wife plan to move out of their $2,300-a-month rent-stabilized apartment.
Cuomo is right to note that there are no income restrictions on the vast majority of the roughly 1 million rent-stabilized units in New York City, where maximum rents and rent increases are capped by the city's Rent Guidelines Board.
As Rent Free covered last year, the law has allowed millionaires with second homes in the Hamptons to legally rent rent-stabilized apartments for hundreds of dollars a month in Manhattan. A comprehensive Wall Street Journal analysis from several years ago found that rent-stabilized tenants in wealthier areas of the city received the steepest discounts on rent.
Critics have long argued that this lack of means-testing is just more evidence of how poorly designed New York's rent-stabilization law is.
It nevertheless takes a lot of gall for Cuomo to attack Mamdani for benefiting from rent stabilization when he, as governor in 2019, signed reforms that made New York's rent-stabilization law much more favorable to wealthy renters.
Prior to 2019, landlords had a couple of avenues through which they could "deregulate" pricey rent-stabilized units.
Occupied rent-stabilized units could be deregulated if legal rents rose above a certain threshold and a tenant's income was $200,000 or more. Vacant units could also be removed from rent stabilization if legal rents rose above a certain threshold. That rent threshold was $2,774.76 in 2019.
(The combined income of Mamdani and his wife likely puts them over that income threshold, although it would take a few years of legal rent increases before their rent cleared the threshold to allow for deregulation.)
While not full, direct means-testing, these two provisions were intended to allow landlords to charge market rents to tenants who were making high incomes and/or could afford to rent a higher-priced unit.
The Housing Stability and Tenant Protection Act of 2019, which Cuomo signed into law, eliminated both those avenues for removing rent-stabilized units from price controls.
So now, no matter how high one's income goes or how high legal rent-stabilized rents rise, a rent-stabilized apartment can never be brought to market rates.
The 2019 law also made a long list of other reforms limiting landlords' ability to raise rents after a vacancy, pass on the costs of building repairs and individual apartment improvements, or even take their properties off the rental market.
The result has been a dramatic drop in the value of rent-stabilized buildings, a steady increase in buildings that can't legally charge enough to cover operating expenses, and an increase in vacant rent-stabilized apartments where legal rents can't cover needed maintenance.
Mamdani is both benefiting from the rent stabilization and proposing to make it worse by freezing allowable rent increases. (Back in June, the Rent Guidelines Board allowed rent increases of 3 percent on one-year leases and 4.5 percent on two-year leases.)
But Cuomo's proposed "Zohran's law" would also make life a lot harder for landlords by making rent stabilization even more restrictive still in the name of fairness.
Requiring that vacant rent-stabilized units go to low-income New Yorkers would limit the pool of tenants that rent-stabilized landlords could rent to. They could also have to spend time vetting applicants' incomes.
The added friction would surely mean more units go vacant for longer.
It's notable that Cuomo is not proposing a liberalizing reform that would let Mamdani's landlord charge him a fairer, market rate for the apartment he occupies.
Ideally, New York's mayoral candidates would be discussing ways of easing (or even ideally eliminating) rent control laws that are creating a slowly mounting housing crisis. Instead, the lead candidates are swapping ideas on how to make the system worse.
Georgia Judge Rules Size Doesn't Matter
This past Thursday, a judge in Georgia ruled in favor of the nonprofit Tiny House Hand Up, which had challenged the city of Calhoun's refusal to let them build a village of small cottage homes that would be sold to low-income people.
Tiny House Hand Up had planned to build up to 40 small cottages of between 540 and 600 square feet on land that had been donated to it. But the city rejected the nonprofit's plans, citing local zoning restrictions that required single-family homes to be at least 1,150 square feet.
In 2021, Tiny House Hand Up sued Calhoun with the help of the Institute for Justice. They argued the town's minimum home size served no public interest and thus violated the Georgia Constitution's due process protections.
"These homes are just like any other single-family home. They're just smaller. What the city was doing was fundamentally unreasonable," says Joseph Gay, an attorney with the Institute for Justice who litigated the case.
Attorneys for Calhoun had argued that Tiny House Hand Up didn't have grounds to sue because it could still apply for a special type of zoning change that would allow for its smaller homes.
In court, Gay contested the idea that a zoning change would have allowed his clients to proceed with their project. He also notes that the city expressly said prior to the lawsuit that it would not approve the zoning changes needed to allow for the smaller homes.
Those conflicting arguments made by the city led the Gordon County Superior Court judge hearing the case to rule in Tiny House Hand Up's favor.
In a hearing this past Thursday, a Gordon County Superior Court judge sided with Tiny House Hand Up. In a ruling from the bench, the judge blocked the city from enforcing its minimum home size restrictions on the nonprofit.
Gay says that this ruling will allow his clients to proceed with their project once a written order is issued.
Blackstone Is Good, Actually
Institutional investors like Blackstone have become the latest boogeymen to be blamed for high housing costs. Critics on the right and left argue that they raise prices and convert would-be owner-occupied housing into rental units. Proposals to tax their homebuying business out of existence have been introduced in Congress.
In a new piece for City Journal, Judge Glock argues that Blackstone, and its subsidiary Invitation Homes, have had a positive impact on the housing market by stabilizing prices after the Great Recession and enhancing housing options for renters and would-be homebuyers. Writes Glock:
When Blackstone and Invitation Homes entered the single-family housing market, the housing-price crash ranked among the nation's top concerns. These firms, along with other buyers, helped stabilize a collapsing market at a time when many others couldn't—or wouldn't—step in. Though critics faulted Invitation for acquiring homes through foreclosure sales, these were exactly the kinds of properties that, if left vacant, would have decayed and dragged down entire neighborhoods. A recent analysis found that Invitation spent an average of $39,000 on renovations per home—investments that helped preserve property values for surrounding homes as well.
Many have criticized Blackstone and Invitation for pushing people into renting homes instead of buying them. But beginning in 2016, Blackstone offered renters the chance to buy the homes they were renting at preferred mortgage rates. About a fourth of the tenants who stopped renting from Blackstone became homeowners, similar to the rate of other private-equity firms that invested in housing.
At the same time, it's not clear why buying homes just to rent them out is so evil. As one recent study showed, giving renters access to single-family neighborhoods reduced racial and income segregation. In other words, Blackstone helps make the much-maligned suburbs more diverse, both racially and socioeconomically.
Read the whole thing here.
Quick Links
More evidence that construction costs don't determine housing prices in the most supply-constrained markets.
Real estate website The Real Deal covers the nightmare situation of property owner Michael Geylik. He's being ordered by one city department to make repairs to his rental building while also being prevented from making those repairs by another city department, which speciously alleges the repairs are an attempt to harass his tenants.
One in three older households is cost-burdened, meaning they spend more than 30 percent of their income on housing, according to a new analysis from Harvard's Joint Center for Housing Studies.
The Wall Street Journal reports on the slow progress of Big Tech's billion-dollar investments in Bay Area affordable housing. Permitting and complex local land-use rules have conspired to slow the tech giant's efforts, says the Journal.
Massachusetts rent control advocates are organizing to place a ballot initiative that would allow localities to adopt rent control policies on the 2026 state ballot.
The post Andrew Cuomo Proposes 'Zohran's Law' To Fix the Unfairness of Rent Law Cuomo Signed appeared first on Reason.com.
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