If you live in New York or Chicago, you must have heard about these terms. Not just that you heard about them, you probably wish you have rented one of those apartments. Both of them involve rent regulation, but they have different sets of regulation. According to the 2011 NYC Housing and Vacancy Survey, there are about 38,000 rent stabilized apartments compared to rent controlled apartments.
Those two terms differ one from another, although both of them are very attractive to renters. Let’s take a look at rent stabilized apartments first. In New York State, rent stabilized apartments are only available in New York City, Nassau, Rockland and Westchester Counties. They are generally applied to units of six or greater that were built before 1974 and are not subject to rent control. The price of the apartments also has to be less than $2,000 if the renter moved in in 1934 or later. Rent stabilized apartments will not always remain that way; rent can be increased by certain percentage every year and when it goes above $2,000 per month, the apartment will become deregulated. The other way to deregulate the apartment is if the gross income of tenants becomes more than $175,000 a year.
Main advantages of rent stabilized apartments
1.) the statutory right to renew the lease;
2.) the rent can only be increased by small increments every year; typically 1 percent for one year lease or 2.75 percent for two year lease;
There are very few rent controlled apartments left in New York City, only about 38,000 (1.9 percent of total rental units). The reason why the number of rent controlled apartments is decreasing is because it is very hard to meet the requirements for them. For an apartment to be classified as rent controlled, the unit has to meet two requirements:
1.) unit has to be in a building built before 1947;
2.) unit has to be occupied by the same person or family since 1971;
The unit can be transferred only within the family but the receiving heir must have lived in that unit for at least two years prior to the death of previous lease holder.The biggest benefit of rent controlled apartments is that the rent is almost in every case frozen (meaning it cannot be increased at all) or can be increased only slightly every year. Landlords cannot evict tenants for the sole purpose of deregulating the apartment to charge higher rent. Most cities with rent control have regulations that require a landlord to follow a complicated process in order to evict a tenant.
Rent regulation is important for tenants to protect them from illegal increases in rent but also to allow landlords to make a decent profit. Deregulated apartments (free market apartments) are solely on the side of landlords where they decide how much to charge and should they renew the lease to existing tenants. Every New Yorker wants a rent regulated apartment, but it is not so easy to find them. If you have been lucky and rented apartment which is rent stabilized, the chances are you will not want to let it go. You can find the list of rent stabilized apartments here.
So remember to do your due diligence prior to renting an apartment, once you found rent regulated unit make sure that your landlord states in the lease agreement that your unit is rent stabilized, and just enjoy the apartment :-).