May an owner of a New York City rent-stabilized building recover an unlimited number for of units for "owner's use?" (Yes.)
Should they be allowed to do so? (We'll get to that in a minute.)
In Pultz v. Economakis, the tenants of five different regulated units, in a Manhattan building on East 3rd Street, objected to their landlords' attempt to recover possession of all the remaining regulated apartments in the 15-unit structure. While two Justices of the New York County Supreme Court believed that such such a recovery "would be incompatible with the statute's intent to provide affordable and stable housing to New York City residents," in a decision released yesterday, the Appellate Division, First Department, disagreed.
Finding that the two Supreme Court Justices had disregarded a clearly delineated legislative policy which allows owners to recover an unlimited number of regulated apartments, the appellate court concluded, in part, as follows:
[T]he clear and unambiguous provisions of both the Rent Stabilization Law and Code permit an owner to recover an unlimited number of stabilized units for personal use and occupancy without DHCR approval, as long as good faith intent to use the premises as a primary residence is established. Rent Stabilization Law (Administrative Code of City of NY) § 26-511(c)(9)(b) provides that any rent stabilization code adopted by DHCR must "provide[] that an owner shall not refuse to renew a lease except: (b) where he or she seeks to recover possession of one or more dwelling units for his or her own personal use and occupancy as his or her primary residence in the city of New York ..." (emphasis added). Notably, nothing in this subdivision may be read to require DHCR approval before defendants are entitled to recover "one or more" of a building's apartments for personal use.
With the number of affordable housing units in the New York City area on the decline, should we be allowing entire residential structures to be permanently removed from rent regulation in the guise of "owner's use?"
According to a June 1, 2006 report issued by the New York City Rent Guidelines Board (RGB), in a single year (2005), approximately 6,667 apartments entered stabilization, while 14,045 units were removed from the system.
While we certainly recognize the right of owners to control their property interests, we can't help but wonder how a mounting net loss of affordable housing units impacts the citizens of our great City and State. With Manhattan condos and co-ops averaging $1.3 million, and rents averaging $3,142 a month, housing options for those earning under six figures per year are becoming increasingly limited.
If affordable housing continues its precipitous decline, legislative intervention appears to be an inevitable reality.
For a copy of the Appellate Division's decision in Pultz v. Economakis, please use the following link: http://www.courts.state.ny.us/reporter/3dseries/2007/2007_01381.htm
For a copy of the NYC Rent Guidelines Board's report, Changes to the Rent Stabilized Housing Stock in New York City in 2005, please click on the following link:
http://www.housingnyc.com/downloads/research/pdf_reports/changes2006.pdf
---------------------------
For our other blog posts on "owner's use," please use the following link: http://www.nyrealestatelawblog.com/search/mt-search.cgi?IncludeBlogs=4&search=%22owner%27s use%22