"Just before being tapped in December 2018 to chair the housing committee, Kavanagh warned, Everyone can expect that we will have a very strong effort to strengthen the rent laws to protect tenants. A Senate page on rent arrears hasn't been updated since 2021. Unfortunately, rather than air out the issues and craft a balanced, effective policy, he and other legislative leaders waited until mid June 2019, when rent stabilization was due to expire."
"By overcorrecting for past abuses, the law has triggered a wave of bankruptcies and an inexorable deterioration of the city's rent-stabilized housing stock. It has also devastated regional banks, unleashing a scourge of toxic mortgages that ripped through their loan books like cancer. Signature Bank collapsed in 2023 and New York Community Bank was nearly wiped out in 2024."
"Tenants, the supposed winners, haven't exactly thrived under the new law. Violations and vacant units have piled up in their buildings and they are skipping rent payments more often than before the HSTPA. Collection rates have fallen by about 5 percentage points and show no signs of improving."
Brian Kavanagh, departing as state Senate housing committee chair, leaves behind a controversial legacy centered on the 2019 Housing Stability and Tenant Protection Act. Enacted hastily behind closed doors in June 2019, the law incorporated seven of nine tenant activist priorities but overcorrected for past abuses. Consequences include numerous building bankruptcies, deterioration of rent-stabilized housing stock, and severe damage to regional banks, including Signature Bank's 2023 collapse and New York Community Bank's near-failure in 2024. Paradoxically, tenants have not benefited; violations and vacancies increased, rent collection rates dropped approximately five percentage points, and payment defaults rose. Major lenders now avoid the sector entirely, exacerbating the housing affordability crisis.
Read at therealdeal.com
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