In New Paltz, landlords attend rent increase hearing in force; tenants stay home

A new review of a proposal that would create a mechanism for disputing a potential rent increase got the attention of some New Paltz landlords; although they maintained that many others were ignorant of what was on last week’s village board agenda. It appeared that tenants may have been ignorant, as well, as none were in attendance; it’s also possible that every single tenant in the village is fully behind this law and aware of its implications, but none were there to say either way. 

This is an idea that was previously considered in 2021 along with other rental reform measures, first among which was what was called “good cause” eviction. Perhaps sensing how tenuous the tenets of that legal strategy were, trustees at the time decided to see what happened when good-cause laws were given the rigor of judicial review. That didn’t end well; laws in several cities including Newburgh and Poughkeepsie were shot down by judges who said that tenant protections have to be passed at the state level. 

Village trustees have not been inactive since. This year they initiated the first village rental survey pursuant to the state’s emergency tenant protection act, which was amended in 2019 to expand its use beyond New York City. The idea is that if the survey shows that the vacancy rate is extremely low, lawmakers can declare a rental emergency, which would initiate rent control. However, the scope of the law doesn’t fit well with the rental market in New Paltz, as it only includes structures built before 1974, and that include at least six units. In the village, most rental properties are nominally single-family homes. 

If this law were to pass as written, it would allow for some mitigation of rent increases for all tenants. When a notice of an increase is received, the tenant may respond with “a written statement to the landlord detailing the reasons why they believe that the proposed increase is unreasonable” before the new rent goes into effect, and then “may withhold payment of the difference between the prior rent rate and the increased rent rate.” There’s no language in the law specifying what ought to be done with that withheld money, but it’s possible that a judge will later decide that it’s owed to the landlord. There’s also nothing indicating that such back rent wouldn’t be immediately due and payable, which theoretically could expose a tenant to eviction for nonpayment if, in such a case, the landlord wasn’t made whole as soon as a judge ruled in their favor. 

Whether a judge rules at all would be up to the landlord, who could simply accept the refusal to pay more rent, or could file a court case and ask for a judge to decide what’s reasonable. No matter what that landlord decides, language in the law includes, “Contesting a rent increase is not grounds for eviction. The court shall take into account any eviction proceeding following the litigation of an unreasonable rent increase proceeding, regardless of the outcome.” This may also mean that judges should take contested rent into account, even if the landlord accepts it. The law does specify that landlords who fail in their bid to get an increase approved in court should think twice about refusing to renew that tenant’s lease, as that could be seen as retaliation. 

Landlords are allowed to bring any evidence they wish to justify a rent increase, but the law calls out some particular examples, including the consumer price index, money spent on capital improvements or expenses, and evidence that the prior rent was significantly below the market average rate. Judges are also invited to consider the percentage of the increase, the pattern of increases for that unit, and “whether the rent increase would shock the conscience of a reasonable person.” 

The testifying landlords had questions, concerns, and also warnings. Among the warnings was one that local landlords who might avoid increasing the rent at all for a period of years, will instead get into the habit of raising it as high as they can each year without it appearing to meet the definition of “unreasonable.” As an increase of more than five percent is specifically called out as potentially being unreasonable, that number was suggested as possibly being a standard increase should this law pass. Daniel Scherrer articulated another warning, which was to expect a lawsuit. It was in part out of a desire to shield taxpayers from legal fees that trustees held off with their own “good cause” law two years ago, despite housing advocates from For the Many who threatened to run candidates against the incumbents if they didn’t adopt the measure. Scherrer’s opposition was especially disappointing to Alex Wojcik, who recalled that Scherrer had been supportive of it when it was last reviewed, and asserted that none of the wording has been changed since. 

Some of the questions and concerns were addressed by Mayor Tim Rogers, who does not favor sitting stone-faced and unresponsive when receiving testimony. That’s what Rogers had to do as a member of the school board, before being elected mayor. It’s the legal minimum for public officials when holding a public hearing, but Rogers prefers to enter into dialogue to try to hash out weaknesses and identify ways to improve a proposal. Landlords worried that inflation wouldn’t be considered (it can be), and wondered if this law has been reviewed recently by an attorney (yes). They questioned whether this is within the authority of this board, a question which wasn’t answered. The assertion that the way to bring down rents is to create more housing was countered by there being no evidence that this has worked elsewhere in the state. 

Richard Lanzarone said that there doesn’t appear to be anything in the process to consider when the rent was last increased, and believes that this should be a factor. The proposed law does allow the judge to consider the current increase in the context of a pattern of increases, and whether the prior rent was a below-market rate. Lanzarone then asserted that by some measures, wages in Ulster County have risen 24.2% from 2019-22; the mayor questioned whether Lanzarone’s metric — average wage — was the appropriate one for this purpose, rather than median household income. “No one’s making 24% more,” Rogers said. 

Matt Eyler pointed out that commercial loans have variable rates, and when those rates go up, landlords could get stuck in the middle. Eyler’s comment is reflective of the national real estate market, in which owners of commercial property often build their business model around utilizing “other people’s money” – loans — to make a profit more quickly in that competitive environment. Many major economic crises here and abroad are tied to the high amount of debt linked to real estate of all types. Scherrer noted that for commercial loans, “Lenders can foreclose if I don’t meet income goals.” 

Even as the discussion over this proposal took place, there was a different thread of conversation about the process. “Why won’t you collaborate with the people you’re trying to impact?” asked Teresa Thompson. 

Similarly, Adele Ruger wondered why trustees were trying to “sneak in an illegal law for rent control.” 

Robert Gabrielli asserted that many landlords were unaware of this scheduled hearing. 

At the core of all these concerns is a tension in the process of changing laws. It requires a public hearing, in order to ensure that members of the public can have their say. Ensuring that persons who might be affected by a given law know about that hearing is extremely challenging, and hard to measure. 

Here, Rogers prefers to rely on the process that’s outlined in law, and nothing more. Collaboration “is the function of this public hearing,” the mayor said. “We have circulated a draft, as opposed to having a back-door conversation with a group of landlords. We are having a public hearing.” 

“Sometimes this isn’t the forum,” said Thompson. 

“This is the forum,” Rogers replied to that, adding later, “I will have a public meeting that’s recorded, that’s what I will do.” This was followed by the mayor reiterating something that has been said frequently in recent years: that the purpose of a public hearing is to gather input from anyone interested and impacted; that scheduling a hearing is not signaling the intention to pass a given law; and that hearings on potentially controversial proposals get held over for many meetings. Rogers also cited examples of laws that were not passed after hearing from members of the public, such as one that would have allowed for taller grass in an effort to rein in human-caused climate change. “We might modify, jettison, or pass the law. You have to have a process.” 

“If you sat down with landlords first, we wouldn’t have to come,” said Thompson. 

Rogers also gave a glimpse into what’s happening behind the scenes. Renters faced with high increases are reaching out to members of the landlord-tenant relations council, or directly to the mayor. Rogers said that it’s not uncommon for the mayor to call a landlord to ask about a particular increase, only to have that landlord back off just for the asking. “It feels a little grindy to me.” Rogers steadfastly maintained that “there has to be a process” beyond calling the mayor for help. As for the process of reviewing this law, “Rip it apart, edit it enormously; it may never see the light of day, but it’s ready for a public hearing.” 

That hearing was held open for another day.