'Loophole' Said to Give Landlords Unfair Advantage

The New York State Division of Housing and Community Renewal is considering closing a legal loophole that allows some landlords to sidestep rent regulations in the case of “unique or peculiar circumstances.”

“Some landlords have attempted to get around the rent stabilization laws by manipulating the so-called ‘unique and peculiar’ loophole, attempting to force low- and moderate-income tenants into totally unreasonable and unfair rent increases,” Director of Organizing and Policy for the Urban Homeownership Assistance Board Dina Levy said in a statement.

Many landlords have argued that opting out of the Mitchell-Lama program, which entitled them to unlimited rent increases, constitutes such a circumstance. The Mitchell-Lama program allows tenants in designated buildings to have subsidized housing. Landlords can usually opt to withdraw from the program after participating in it for 20 years, as many do in order to raise rents.

“By closing this loophole, landlords will not be able to pull their buildings out of rent stabilization when leaving the Mitchell-Lama program in violation of New York’s rent laws,” said Bertha Lewis, executive director of the affordable housing advocacy group ACORN.

According to The Independent, there were 24 “unique or peculiar” applications pending before the DHCR, including some buildings with nearly 5,000 units.

A final decision on the issue, which would involve an estimated 17,800 apartment residents, is expected in early- to mid-November, a DHCR spokesman said.