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Newly empowered Democratic leaders in Albany announced a landmark agreement to strengthen New York's rent laws and tenant protections, seeking to address concern about housing costs that is helping drive the debate over inequality across the nation, The New York Times reported. The changes would abolish rules that let building owners deregulate apartments, close a series of loopholes that permit them to raise rents and allow some tenant protections to expand statewide.
The city's multifamily market has had a very slow year so far, and brokers say they expect that to continue for at least another few months while buyers and sellers try to figure out how much of an impact the state's new rent regulation proposals will have on the properties, The Real Deal reported. "There's going to be a period where buyers and sellers pause and reevaluate where these things are and see how it impacts their long-term cash flow, and that will take some time to digest," said Ariel Property Advisors executive vice president Michael Tortorici, "so I think we may be in for a period of slower transaction volume while the market digests it and sees how to interpret it."
Uncertainty around rent-regulation reform that began last November when the Democrats took over the statehouse will be resolved, and seasoned multifamily investors will begin the process of taking stock and adjusting to the new normal, the Commercial Observer reported. In the meantime, uncertainty about the fate of these proposals has been primarily responsible for the slowdown in multifamily so far this year. However, the presence of building cranes across the city suggests that investors remain as committed to New York multifamily as ever.
Sweeping reforms set to become law will give thousands of stretched New York families who struggle to pay the rent the chance to breathe a bit easier, New York Daily News reported. Over time, the overhaul may so severely distort incentives for landlords and builders that it'll come back to hurt the very people it's designed to help. This is because, in the name of safeguarding the city's current stock of affordable housing, new laws will extend rigid protections to countless people who don't need them.
Shares in the leading banks for city apartment landlords fell after the state Legislature agreed on sweeping reforms to the rules covering 1 million apartments, Crain's New York reported. New York Community Bancorp, the city's leading multifamily-property lender, fell by 6% today, and its stock has lost 11% since mid-May as proposed revisions to rent regulation gained steam. Signature Bank shares lost 4% today. Dime Community Bancshares, Flushing Financial and Investors Bancorp also lost ground.
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