Members of the commercial real estate industry have slammed the legislation, saying it will mean less investment in buildings and therefore an overall decline in the housing stock.
Under the Housing Stability and Tenant Protection Act of 2019 passed in June, the Major Capital Improvement (MCI) and Individual Apartment Improvements (IAI) programs, which have allowed landlords to pass on the costs of building improvements in rent, were significantly slashed.
MCI increases are now capped at 2%, reduced from 6%, and will be eliminated after 30 years. IAIs are capped at $15K in a 15-year period, and landlords will only be allowed to make three improvements at a maximum during that time.
Landlords in the City have significantly reduced spending on renovating apartments since the state government introduced rent reform legislation. From July through November, the number of renovation projects in the city dropped by 44% year over year, The Wall Street Journal reports, citing analysis of Department of Buildings records. The total expenditure on renovations decreased by $71M.
More to follow. The Chapter plans to host an event to track this important topic this year.
