The sharp rise in housing prices that began during the pandemic has started leveling off in other parts of the country, but not in Upstate New York. Rochester, Syracuse, Buffalo, and Albany recently topped Zillow’s list of the strongest seller’s markets in the country.
The rising cost of home ownership is a relatively recent trend and one of many factors that drive the local market for rental housing. A 2021 study of Monroe County’s rental housing market commissioned by the Community Foundation, the Wilson Foundation, and ESL Federal Credit Union identified two trends that have been at work here much longer: 50 years of movement from city homes to the suburbs, followed by conversion of owner-occupied homes to rental use.
As a result of these trends, rental units in the city of Rochester are likely to be in smaller properties. Nearly two-thirds of Rochester’s rentals are found in properties with one to four units, which can be inefficient to operate. Furthermore, city rental units tend to be old. Almost half of all rental properties were built before 1940, meaning that repair and replacement costs can be high.
And even though rents have been increasing for many years, the same study found that many rental households are struggling not because rents are uncharacteristically high, but because household incomes are too low. In 2019, the median renter household in the city could afford only $650 in monthly rent. That amount is too low to afford most privately owned rental housing, and far too low to support construction of a new market rental unit.
Taken together, these three factors create serious challenges for the rental housing market. Older housing stock spread across smaller properties means that much of the city’s rental housing is stressed—badly in need of repairs and often in violation of city codes. Low incomes mean that many renters in the city are not able to afford better housing choices.
The spike in housing prices has kept many renters from buying a home and made a bad situation for renters even worse. High demand allows owners to charge higher-than-usual rents to new tenants. It also allows them to impose higher-than-usual rent increases on existing tenants who want to renew their lease. Instead of renewal rents reflecting the increased cost of doing business, some owners have increased renewal rents by 10, 20, or 30 percent. Some of the most aggressive increases are imposed by owners of smaller properties already behind in making repairs.
Every housing market is different, but the sharp rise in housing prices has impacted rents in other communities too. In response to increased pressures on renters, New York recently passed a new law known as Good Cause Eviction. GCE applies to New York City and allows other municipalities in the state to opt in by adopting a local version of the law. So far, the municipalities of Albany, Ithaca, Kingston, and Poughkeepsie have elected to opt in. GCE legislation is currently under consideration by Rochester’s City Council.
Naming the new law Good Cause Eviction implies that under current law, property owners can evict tenants without cause. For owners who comply with the law, that simply is not true. Evicting a tenant anywhere in New York is a formal process controlled by state Landlord and Tenant law, which also sets out the allowable grounds for eviction. In addition to non-payment of rent, which accounts for most evictions, grounds for eviction include unlawful use of the unit, property damage, and nuisance activities.
Apart from formal evictions, owners under current law have one other option for terminating a tenant’s lease: declining to renew the lease at the end of its term. Declining to renew a lease requires advance notice to the tenant, but unlike the eviction process does not require any kind of court proceeding.
The right not to renew a lease is extremely valuable to property owners for removing tenants who compromise the quality of life for other residents. Evictions are costly, the burden of proof is on the owner, and court proceedings can take many months even for simple cases involving non-payment of rent.
In some cases, especially those involving dangerous or threatening behavior by tenants, eviction proceedings can also become hostile. When tenants engage in illegal activities, insult or threaten other tenants or the owner’s employees, or make other tenants feel uncomfortable or unsafe in their homes, most owners would rather decline to renew the offending tenant’s lease than start a formal eviction process.
GCE makes two basic changes affecting an owner’s right to terminate a lease. First, an owner who raises the rent on a lease renewal over a certain percentage (currently 8.6 percent) cannot evict a tenant who refuses to pay the higher rent. Second, with some limited exceptions, owners can no longer decline to renew a tenant’s lease. If GCE is adopted, the only way for an owner to remove a tenant is through formal eviction proceedings.
GCE advocates favor this “auto-renewal” feature for two reasons. First, they fear owners will not renew tenant leases in order to avoid the cap on rent increases for lease renewals (e.g., an owner declines to renew a lease and then raises the rent for a new tenant by 20 percent). Second, advocates believe auto-renewal will stop owners from declining to renew a tenant’s lease in retaliation for complaints about property conditions or code violations.
Over a dozen owners of apartment communities in Rochester have sent letters to the mayor and members of City Council urging them not to adopt GCE. The reasoning is simple. The owners understand the need to control price gouging, and don’t object to a reasonable cap on renewal rents. They do object, strongly, to any interference in their decision to renew or not renew a tenant’s lease. It hurts their ability to protect their tenants, employees, and properties from harm by problem tenants.
For many property owners, the single biggest challenge they face is being able to remove problem tenants from their properties. The harm caused by one tenant’s failure to pay rent is relatively minor; it is a problem that money can solve. The harm caused by tenants who endanger or harass their neighbors and make them feel unsafe in their own homes can make an entire building unlivable. It can cause good tenants to leave as eviction proceedings drag on, and it can create a bad reputation for the property making it harder to lease in the future.
Property owners also feel a basic element of unfairness. Owners of other businesses, along with service providers like doctors, lawyers, and government offices, can turn away customers who are threatening and disruptive. The GCE auto-renewal feature takes that basic right away from rental property owners.
If City Council could adopt GCE without the auto-renewal clause, tenants who want to renew would be protected against predatory rent increases. Tenants whose leases are not renewed, and who believe their renewals were unfairly denied, could still bring complaints against owners through the State Division of Human Rights. More than one complaint against the same owner could trigger more vigorous inspections and code enforcement.
Unfortunately, when the state passed GCE it allowed municipalities opting into the law to change only two of its terms, and the auto-renewal feature is not one of them. If City Council chooses to adopt GCE, it will end up protecting some tenants against price gouging by predatory owners, but it will hurt the ability of responsible owners to maintain the best possible living conditions for their tenants.
GCE may bring other negative consequences as well. Some owners may choose to jack up rents on available units knowing that future rent increases will be capped. Owners facing increased costs for security, repairs, and maintenance may pass these costs on to new tenants in the form of higher rents on units not subject to the cap.
Most importantly, GCE will do nothing to help increase the supply of better rental housing by making it easier and less expensive to build, and it will not help renters getting by on limited incomes find better housing options for themselves and their families.
Howard Konar is board chair of Konar Properties and founder of Civic Genius, working to highlight areas of agreement among voters and help them connect with their elected leaders.
The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. Submissions to the Letters page should be sent to [email protected].
Howard Konars’s thoughtful and accurate article has two components: For context, he first has reviewed the appealing absence of governmental programs to increase the availability of quality rental and sale housing. Secondly, he has identified important flaws in the proposed Good Cause Eviction legislation. City Council has the difficult task of deciding to go with a popular, if flawed, proposal, and tweak it down the road, or to balance the views of landlords and tenant advocacy groups and pass something now.
My goal in this reply is to ask local advocates for better home ownership opportunities and fair rental policies for those of low, moderate and middle incomes to learn about the housing legislation introduced in mid September by Rep. Occasio-Cortes of NY, and Sen. Tina Smith in Minnesota. “The Homes Act of 2024” is breathtaking in its scope, and incorporates the features of Social Housing in cities such as Vienna, Austria, where the majority of the city population have lifetime tenancy in quality housing that is affordable and is governed by unions or other socially responsible non-profits. I have written to encourage others to study this proposal, and then contact Rep. Joe Morelle, our Congressman, to become a cosigner
An excellent summary, and full text, is available from Rep. Occasio-Cortes’ office by entering these exact words in your browser: “The Homes Act of 2024.”
“The bill would:
“Establish a national Housing Develoment Authorty to acquire and develop… sustainable, affordable…single and multi family housing with robust tenant protections.
“Empower local communities…to finance…mission driven nonprofits, tenant-or resident-owned cooperatives… and community land trusts.
“Requiem (that new housing)…set aside 40% of units for extremely-low-income households and 30% for low-income households.
“Cap rents a 25% of income, and cannot increase more than 3% per year.
“Support homeownership by allowing residents to purchase homes under shared equity models and providing relief to mortgage borrowers at risk of foreclosure…
“Provide workers with strong labor protections…
“Provide tenants with opportunities to come together to purchase their buildings prior to large, for profit developers buying them.
“Provide funding to rehabilitate… ;and address the backlog of necessary improvements for public housing, and repeal the Faircloth Amendment to allow (federal) funding for new public housing.
“Authorize $30 billion in annual appropriations.”
Sorry if I was unclear. It responded to a specific comment about housing being a human right. A number of the signators live outside the city; they listed their zip codes.
Mr. Konar
I was surprised to you see your Editorial given your work on building common ground and engaging elected officials on issues where there is large voter agreement. Like minimum wage, good cause eviction protections and rent controls have broad voter agreement according to polling and our four public forums in the City this summer which I didn’t see you at.
Have you been creating this dialogue with tenants and those directly impacted by no-cause evictions? If not, would you like to start?
Replying to Ryan Acuff:
I would like the chance to speak with you. You can reach me at 334-4110.
Mr. Konar nicely summarizes the futility of owning rental properties within the City of Rochester and the economics of property rehabilitation. The hovering black cloud over all is the poverty evident in large swathes of the city — and until we truly and meaningfully address the poverty issue housing will be but one of many side issues that, as a community, we are forced to deal with.
Housing is a human right. This statement sums up the position of members of Elders & Allies, a group whose mission is to dismantle structural racism in all its forms in the Greater Rochester community. We write in support of the City-Wide Tenant Union of Rochester recommendation to strengthen and pass Good Cause Eviction legislation being considered by the Rochester City Council.
A community that ensures a fair housing environment for all its residents is a community that has taken a step toward stabilizing the wellbeing of its citizens. The operative word here is “fair.” Landlords who maintain their properties and respect renters should not be concerned about Good Cause. It is behavior of those landlords that raise rents exorbitantly and refuse lease renewals – for no good reason – that the proposed legislation should address. The landlords who retaliate against tenants requesting basic repairs are the ones who would be affected. Currently, they need not give a reason for their actions, and the result is that tenants, most of them women, children, and People Of Color, are left without housing.
The correlation between housing insecurity and homelessness, crime, poor educational outcomes, mental health, and mortality is clear. Below are links to a sampling of studies that have shown the devastating educational, economic, social, and psychological effect of housing instability and evictions, yet, as CWTU notes, City Council’s version “is the weakest in all of Upstate, denying tens of thousands of renters protections from predatory landlords.” It includes the LLC Loophole, excluding landlords who own 10 or fewer units. A majority of eligible buildings would be excluded, affecting approximately 35,000 renters. Landlords who own fewer units must follow basic health and safety standards; Good Cause should apply as well.
Elders & Allies urges the five City Council members who have been resistant to reconsider their position and please pass strong Good Cause Eviction legislation.
Sincerely,
Jane Ballard, 14608
Beverly Brown, 14618
Liz Brown, 14608
Janet Chaize, 14534
Paula Hansen, 14620, City
Joyce Herman, 14618
Steven Jarose, 14534
Padme Livingstone, 14625
Ruth Marchetti, 14526
Madeline Schmitt, 14623
James Thompson, 14616, City
Shirley Thompson, 14616, City
https://economics.yale.edu/news/230926/new-research-sheds-light-economic-consequences-evictions
https://www.vice.com/en/article/want-to-curb-city-crime-evict-fewer-tenants-study-says/
https://thechildrensagenda.org/wp-content/uploads/2023/08/Housing-Stability-FINAL.pdf
Replying to Elders and Allies:
I think we agree on the goal of increasing the supply of better housing and making choices more affordable. The question before City Council is whether GCE helps advance that goal.
In my opinion it does not. GCE would protect some tenants against sharp increases in rent when they renew their leases. Many of these tenants, however, are trapped in substandard housing. GCE won’t give them more income to afford better housing options. It won’t lower the cost of good housing by increasing supply. It will cause the harms to neighboring tenants outlined above. GCE is a signal that we care about housing, not a policy to provide better and more affordable housing options.
While I respect everyone’s right to comment, I believe that unless you own property within the city limits, rent, or create new housing, your efforts to influence the Rochester City Council legislation hold far less validity than those who must live with the outcome of the legislation. Unless those living in the towns and villages adjacent to the city are willing to advocate and implement low-income/affordable housing in their locations, the burden ultimately resides with city residents. Housing is a countywide challenge, and more than ample land is available in city-adjacent communities to accommodate needed housing. How about advocating for more affordable housing in those locations? As we’ve seen elsewhere in the state, especially in the suburban locations near New York City, there’s been significant resistance to Governor Hochul’s rail-adjacent affordable housing initiative.
Much of the affordable housing in the city is subsidized with State, County, and Federal taxes. Efforts to reduce city poverty include housing allowances, income subsidies, Social Security payments, and other assistance programs. Ultimately, we all pay the fiscal price. Still, city residents bear the burden of lowered real estate values, costly but ineffective education, fewer jobs, significantly higher crime rates, and declining housing stock. Let’s encourage far more diversity in all areas of the country before imposing added burdens on those living in the city. It’s not my intention to put down the well-meaning, social conscientiousness of suburban residents. However, I think that the suburbs could do much more to help the city other than giving advice.
Replying to Frank Orienter:
I’m not sure if your comment is in response to the article or to another comment. If it is in response to the article, Konar Properties does own and manage multifamily housing in the City of Rochester.