Podcast - Inside New York City's Rent Stabilization System

Alex Lycoyannis: Hello, everyone, and welcome to the latest episode of the Holland & Knight "Real Estate Law Unlocked" podcast. My name is Alex Lycoyannis, and I'm a partner in the New York City office. And I'm also the co-head of the firm's Real Estate Disputes and Advocacy Team. Today I'm going to be speaking with Christina Smyth, one of the founding partners of Smyth Levenson LLP, and we're going to be talking about New York City rent stabilization, a topic which has been in the news quite a bit this year, both in New York and nationally. Christina is, as I mentioned, the co-founder of Smyth Levenson LLP, and her practice specializes in due diligence on behalf of buyers and sellers of multifamily properties in all of the boroughs of New York City. Her roster of long-term clients include owners, developers, family offices, private equity investors, foreign investors and management companies. Christina's knowledge of the rent laws enables her to guide clients through the housing court proceeding process. Christina handles all administrative proceedings at Division of Housing and Community Renewal (DHCR) and Housing Preservation and Development (HPD), which are the two main administrative agencies in New York. And she's been successful in representing many owners with the Certificate of No Harassment and Substantial Rehabilitation processes. Christina has also served as one of two landlord representatives on the New York City Rent Guidelines Board between April 2022 and June of 2026. In that role, Christina advocated for fair and reasonable rent adjustments each year to help owners of rent-stabilized properties operate and maintain their buildings without financial distress. Christina, did I cover everything? Anything I missed?

Christina Smyth: I think you did a great job with that intro. Thanks, Alex.

Alex Lycoyannis: Well, thank you, Christina. And again, I appreciate you being on the podcast today and imparting your knowledge to everybody. So as I stated before, we're going to be talking about the New York City rent stabilization system today. Christina, for people who may have heard of rent stabilization or may have only a faint idea of what it is, which I imagine is most people who don't live in New York City, can you give a very short summary of what rent stabilization is?

Christina Smyth: Of course. So the rent stabilization system is a joint sort of set of legislation that comes primarily out of Albany, but also with a component that is administered by New York City. And it covers roughly 900 housing units across the five boroughs. So when we talk about the ecosystem of housing units in New York City, the number is generally around three million housing units. And so to think about the fact that one-third of those units are protected by rent stabilization, you can understand the magnitude just on the unit-count basis. And the highlights of rent stabilization are automatic renewal leases. So there's really no agency between the tenant and the landlord. I would say it's more heavily weighted towards the tenant's needs, that a rent-stabilized tenant gets an automatic renewal lease in perpetuity as long as, of course, they comply and pay the rent and otherwise abide by the terms of the lease. And the other highlight of stabilization is that rent adjustments are mandated by the city of New York. So this is a very regulated environment versus like a free market setting where the landlord sets the rent and the tenant decides if the tenant can afford the rent, then they'll rent that apartment. So those are the two, I'd say, hallmarks of the rent stabilization system.

Alex Lycoyannis: Thanks for that, Christina, and for the listeners, just a little bit of history, and it's going to be important to understand the history of rent stabilization as Christina and I discuss various aspects of that system today. The current iteration of rent stabilization in New York City really has its roots back during World War II when the federal government put price controls on basically everything – on everyday items, on groceries, on everyday staples and many things that were daily items of commerce – in furtherance of the war effort. And one of those items were rents, residential rents. And eventually after the war, those price controls eventually expired, but something was kindled regarding the urge to regulate rents because while price controls and other items never really came back after World War II, there was always a movement to re-regulate rents, so in 1962, the state legislature enacted a statute signed by the governor called LERCA, the Local Emergency Housing Rent Control Act. And what that statute did was it enabled cities and states around New York state to enact rent control systems, like rent stabilization, because absent that statutory authority, localities could not enact rent control or rent stabilization. And picking up the ball from the state legislature, New York City enacted the Rent Stabilization Law of 1969, which imposed rent stabilization in New York City for the first time. And that's kind of what you said earlier, Christina, about it's basically a combination of city and state laws. The state law was required to enact rent stabilization within New York City, which it did in 1969. And then there was some efforts immediately after 1969 to try to repeal rent stabilization. There was, you know, several laws passed in 1971 called the Urstadt Law, the Vacancy Decontrol Act. So it almost essentially killed rent stabilization in its crib. But then in 1974, there was a statute called the ETPA, the Emergency Tenant Protection Act, that put all of those de-control mechanisms to a stop and essentially established rent stabilization in New York City from that point forward. So that's kind of the basis of where we are today. And one of the mechanisms, which we'll talk about later on as well, and Christina, you referenced it, is the determination of rents, right? And the Rent Guidelines Board is the body that controls that process within New York City. So you were a former board member. As a general idea, can you tell people what the Rent Guidelines Board is and what it does and who the people are on the board and who comprises the board?

Christina Smyth: Of course. So what I believe the Rent Guidelines Board attempted to do in its inception, which was also 1969, right? So the Rent Guidelines Board gets its authority from New York state statute. And the construct is to provide owners with the ability to maintain the property, right? That was the original statute. And then it goes on to say, among other things, what the board is supposed to consider is what is it costing the landlords to run the buildings? Insurance and taxes and utilities across the board, the costs to run the building. And then this part of the statute, among other things, has been sort of bifurcated out to review wage data. So it is an affordability program after all, rent stabilization, and so owners of buildings want their units to be manageable from the perspective of tenant wages. But the board primarily was established to sort of meet the needs of the residential properties, where they are from a financial standpoint. The board essentially has two landlord reps and two tenant reps and then four public members. These individuals in the middle, as you can imagine, in the end are the deciders about what the adjustments will be, with the oversight from the chair. The two tenant reps that I most recently served with were housing attorneys. Myself and my prior co-landlord rep, both attorneys. And the public members, one is current sitting members and economists, which is great. As you can imagine, economists love to talk about rent controls and the inadequacies of rent control over time and over history. And the process is about four to five months every year and the board is supposed to come up with an adjustment that meets the needs of the buildings' finances and also keeps this affordability component in place. And each year since 1969, there have been Rent Guidelines Board orders. So the most recent was 57, number 57. You'll see that that math checks out. And, you know, as has been highly publicized, this is the first time ever in history that there has been a rent freeze enacted by the Rent Guidelines Board for both one- and two-year leases, which is shocking even to say now. The board, in its deliberations, believed that landlords are doing just fine, you know, despite cost increases sort of across the board, and enacted a double-year rent freeze for Order No. 57.

Alex Lycoyannis: Yeah, thank you for that, Christina. And we're going to get into it a little bit, the 2026 Rent Guidelines Board order. And I think it'll be instructive to kind of go through the years and see how the system overall has ebbed and flowed. And once we look at how it's evolved over time, not that the rent freeze makes sense in an objective way, but it makes sense given all of the other factors that are at play. I think that'll become apparent as our discussion progresses, but thank you for that. One other quick question. The Rent Guidelines Board has nine members. Are those members all appointed by the mayor, or is there some other process by which they're selected?

Christina Smyth: Solely mayoral appointment.

Alex Lycoyannis: Are they appointed for a certain year term? Does the mayor appoint all of them every year, or how does that process work?

Christina Smyth: So the initial appointment is however much more time is left on any given seat. They are two-year terms. But those change, right? If someone steps down, then there's someone who needs to be replaced for a one-year term. But essentially, all board members serve at the pleasure of the mayor. Or if they resign, obviously that's the only way to be removed from the board, is either a resignation or the mayor asking any given member to step down. And then as the mayor did in late 2025 and early 2026, the mayor has the ability to appoint as many open seats as he or she wishes. This hypothetical mayor, right? Hopefully someday it will be a she. But the mayor has discretion over appointments to the rent guidelines board.

Alex Lycoyannis: OK, so thanks for that, Christina. And so essentially the Rent Guidelines Board, I think we can summarize that by saying the Rent Guidelines Board is more or less a creature of whatever mayor is currently elected, whatever he or she believes, or I should say, is a reflection of the mayor's worldview and policy preferences.

Christina Smyth: This swath of expansion and contraction of this system that you and I know colloquially as rent stabilization, but it has been, it's fascinating, honestly, for all the history nerds who are listening to sort of see how the rules of rent stabilization have expanded and contracted in accordance with the political winds. And again, we can stay as nonpolitical as we wish, but there have been some really fascinating expansions and then, of course, culminating with 2019, an extreme constriction of what the code allows.

Alex Lycoyannis: That is exactly why I thought this would make a captivating podcast, and that's exactly why I thought to ask you to be on it. OK, so we've covered the history of the enactment and the inception of rent stabilization in the 1960s. The efforts to overturn it right away and then 1974 came and the ETPA was passed and that established rent stabilization in New York City as more or less permanent. Even though technically it's not supposed to be permanent, or it wasn't supposed to be permanent, it's been permanent ever since 1974. So as you just indicated, rent stabilization has ebbed and flowed over the years. And the first time it really was expanded, or I would say liberalized or loosened, was in the 1990s. But let's take a step prior to that. From the '70s, from 1974 up until 1993, let's say, how did the system operate? Was there predictability? Were owners able to profitably run their buildings? Was there an ability for apartments to leave rent stabilization? In that 20-or-so-year period, that initial period of rent stabilization, how did the system operate?

Christina Smyth: So I believe that the system was intended to handle a shortage of housing units and not really be a permanent price-setting kind of mechanism, right? So we have the initial emergency intervention where we need to make sure that there are affordable homes and that there are enough affordable homes. And then the continued emergency framework, right, has gone on right up until today, right? We're still under this belief that there is a housing emergency. And units certainly did leave the rent stabilization system because we had a deregulation threshold. So if the rents rose above a certain dollar amount, units would leave the system forever. Obviously, you're putting free market apartments into circulation with regulated apartments, which I happen to think if we have to live with one, then we certainly have to be able to utilize the free market economics as well. But I would say that it wasn't working to the satisfaction of the lawmakers because then we had these two significant pieces of legislation both in 1993 and 1997. And those were sort of the first pull away from the, let's say, a de-control experiment. And we can certainly talk about what the 1993 act did and what the 1997 act did. But I think sort of the 40,000-foot view is that the lawmakers were trying to strike this balance with those two acts.

Alex Lycoyannis: Right. And just speaking generally, and I think you mentioned it earlier, the '93 and '97 acts, well, the '93 act introduced the idea of luxury deregulation and high-rent deregulations, right? But 1993, or the '93 legislation, introduced the idea into law that rent stabilization and essentially the artificial suppression of rents is a subsidy and that if you are an individual making above a certain income, you don't need the state of New York and the city of New York to halt market forces for you. And if you are able to pay the rent, market rents, then the state in New York wasn't going to step in and assist you and tell your landlord that he or she could not charge above a certain amount. And once '93 came and went and then '97, which further loosened the requirements, what happened to the system then, and how did landlords react after those mechanisms went into place?

Christina Smyth: So looking back, I think that these were necessary adjustments. One was the vacancy bonus, so to speak, where an owner would get a decent bump to the base rent upon a turnover, maybe to help prepare and ready the unit for the next tenant, or because the units were occupied for so many years consecutively to sort of make up for lost time and other things, right? There was a longevity bonus implemented so that, again, I'm referring to the long-term occupancies, right? I talked about the fact that there's automatic renewal leases, so often these apartments can be occupied for 30 years, certainly by the '90s, right? It was 30 years later. And obviously an apartment that's been occupied by the same person for 30 years is in need of some repairs and rehabilitation. And so I think that essentially the household income reduction was also a good policy because it's not a New York City school teacher or a New York City firefighter who's making $175,000 in 1997, right? It's people of higher means who could certainly afford a higher rent. And so I think what the legislature intended was to sort of reflect what it was hearing back from constituents and from owners. And I would say that it's often referred to as a time when units left the program. The interesting thing, Alex, and I think you'll agree with me here, is that the vacancy rate, right, which is something that the whole system was sort of designed to address, never really approached this 5 percent statutory emergency threshold. And I would say fast-forward to present day, where we still have, you know, not enough units in circulation for folks to live in. And I hate to sort of boil the entire conversation down to one simple conclusion, but is it helping? If we're basically in the same affordability crisis that we were in that caused the enactment and the shift from Albany down to the city in 1969, what have we been doing for all that time is the simplest way to say it. And maybe you have a better purview on what actually took place after those expansion statutes in the '90s.

Alex Lycoyannis: Yeah, well, I think your last question, that could be a whole subject of a whole different podcast because rent stabilization and housing policy more generally, you can go in so many different directions. There's so many different aspects to it, right? And you mentioned the vacancy rate, which, for those unaware, up until 2019, there was a requirement, right, Christina, that there had to be a vacancy rate of less than 5 percent for the rent stabilization system to continue. And it always seemed to be that there's been different periods of building more and building less, but it always seemed that the vacancy rate stayed below the necessary threshold. So again, that's something, and housing policy and ways to improve housing and a lot of the economic forces at play, that could be an entirely separate podcast where we talk about that because I think we see from a lot of different places around the country, even today, the places where there's a lot of new construction and there's not rent control and not regulation, more supply equals, drum roll, lower rent. So, we can talk about that 'til we're blue in the face. And again, it would be a fascinating topic, but unfortunately, when you're dealing with New York City rent stabilization, you're operating within the strictures that are in place.

So in the 1990s, we had the loosening of the requirements, right? And for the first time, you had luxury deregulation. You have the principle that above a certain income and above a certain rent, you don't need the help of New York anymore to keep your rent down. OK. So you get the late '90s, you get to the 2000s, and you had a lot of situations where you had landlords who would try to bring proceedings, they would try to get vacant apartments to get a vacancy, and as you indicated earlier, Christina, you would get the vacancy bonus upon the tenant leaving. There were certain complaints from tenants and tenant advocates that landlords may have been aggressive in trying to cause vacant departments, and I'm not judging whether those are correct or incorrect assertions. Obviously landlord attorneys and tenant attorneys will have different views on that topic. But we get to the 2010s where there was a real effort, the first real effort since the '90s, to kind of dial back some of the liberalizations of rent regulations that occurred in the '90s. And there were some dialbacks that occurred in 2011 and also in 2015, and there might have been one or two other times as well where there were little tweaks and some not-too-little tweaks that kind of dialed back the reforms of the '90s. The regulatory thresholds were raised, the income amounts were raised, the rent amounts were raised. But then in 2019, it rose to a new level, and I think you referred to it earlier, Christina, in June of 2019, after the elections of November of 2018 ushered in a different New York state legislature. And it was a legislature that was much more keen to regulate and much more keen to regulate the activities of real estate owners. And that resulted in the passage and the enactment in June of 2019 of the HSTPA, the Housing Stability and Tenant Protection Act. I guess it contained a lot, and I don't know that I could ask you, Christina, to boil it down to a thumbnail sketch. I guess in as pithy of a summary as you can, what did the HSTPA of 2019 do?

Christina Smyth: So HSTPA has caused units to remain rent stabilized. As many units as possible are staying under the umbrella of rent stabilization because the mechanisms to deregulate and remove from the statute protections [were] \ outlawed. I mean, that's essentially, you know, the gist of it. So I believe the policy goal was to foster community stability and keep individuals in apartments for as long as they wanted to be in them. And so the ability to deregulate, to go to a market rate rent, to invest in the building, invest in the common areas, invest in individual apartments through individual apartment improvements, all of that with one fell swoop of then-Gov. Cuomo's pen in the afternoon of June 14, 2019, was abolished for all intents and purposes. And so my understanding is that the lawmakers believed that the number of units that left stabilization were not adequately replaced with new units, and so they decided that we have to sort of shore up as many regulated units as we possibly can, and that's where we've been for the last, going on seven years, which is astonishing to think that it has been that long since HSTPA, but here we are.

Alex Lycoyannis: Yeah, time flies when you're having fun or even when you are not having fun. Christina, you mentioned individual apartment improvements, or IAIs. Can you explain what those are and how they operated before June of 2019 and how they operated after June of 2019?

Christina Smyth: Sure. So individual apartment improvements were a way that if a landlord were to recover a vacant, grossly under-market, long-term-occupied rent-stabilized (RS) unit, a landlord could then invest often high five- or six-figure amounts of money into the unit and in doing so be able to adjust the RS rent to a point where it would cross a deregulation threshold amount. So the quickest math is that if the exiting tenant was stabilized and paying a $1,000 a month, the landlord had to spend about $80,000 to deregulate. And for every $40,000 spent, the landlord would get a $1,000 permanent increase on top of the base rent. So if your listeners have ever renovated a kitchen or a bathroom, $40,000 to $80,000 in a one-bedroom apartment in New York City turns that apartment into a code-compliant, really fine place to live. And my understanding of what owners were doing at the time is they would get these units back by attrition and they would spend these really handsome sums of money using really nice fixtures and tile and flooring to get the unit to a point where it could leave stabilization, but also once they were able to set a deregulated rent, the rent roll itself would improve and then they would have money to redo the common areas, which is something that I always like to talk about because inevitably in all of these buildings, you'll have a group of stabilized tenants and you'll have a group of free market tenants, and the laws enabled an owner to take the improved rent roll and pour it back into the building by redoing the staircases, redoing the walls of the common area, new mailboxes, new intercom systems, to sort of keep up with smartphones and so on and so forth. The program of this 1/40th cost improvement until it reached a deregulation threshold, in my opinion, caused a healthier housing stock of well-maintained, well-lit, well-beautified buildings for all to benefit from and be proud of, you know, when the tenants would bring their friends home or their family. And so that was sort of the way that owners would capitalize these buildings. And forget about just the common areas, right? If they needed a new roof, or they needed a new boiler, or they wanted to put new windows in, there was money flowing toward that purpose. And unfortunately, that system of 1/40th, or later iteration 1/60th, cost improvements was abolished and those renovations and the demolishing of those units and renovating those units came to a screeching halt. And in doing so, I believe that a landlord's ability to sort of subsidize its operating expenses with these one or two or four free market units in their buildings, you know, just got locked, never to be seen again, until the present day.

Alex Lycoyannis: Right. And Christina, not to put too fine a point on it, but after June of 2019, you very, in a very detailed manner, described how the system worked prior to June 2019. Once an apartment was vacated, the landlord was able to spend significant sums renovating the apartments, and when you're talking about an investment, you have to be able to recover that investment through higher rents. And what the IAI system did was it regulated how much of the rent could be charged each month in recognition of that investment. So as you indicated, Christina, first it was 1/40th and then it was 1/60th, but the landlords were able to make that math work, and they were able to maintain and improve these rent-stabilized buildings. But then after June of 2019, what happened to those formulas?

Christina Smyth: So the formulas were turned into 1/168th of a capped amount of $15,000. So the legislature now said, you can go ahead and spend your $80,000, but you're only able to pass along 1/168th of your costs for a cap of $15,000. So there's no landlord who would go ahead and find the money to cause an $80,000 or a $100,000 renovation when there was no mechanism whatsoever to ever recoup that money on the basis of the new percentages that the landlords were getting from the state legislature. So, 1/168th turned into $103, a permanent increase to a rent, or rents, I should say, that were locked in time because of the rent growth over the decades of the Rent Guidelines Board (RGB) orders, right? So if a rent was $500 in 1990, there's a very good chance that it was probably $1,300 by the time that the tenant either left voluntarily or passed away. And so if we're now at $1,300 on a vacant apartment and a landlord is given the ability to increase that by $103 with no vacancy allowance whatsoever. Vacancy allowances were abolished. And so that $1,300 rent becomes $1,403, and the landlord essentially re-rents it to another tenant who will likely stay in that unit another 40 years. And so what landlords opted to do, which is their right as the owners of the building, is to think to themselves, well, this unit will cost me and my partners at least $1,600 a month. This is math from the Rent Guidelines Board that the average cost to sort of run a unit is about $1,600, all told, with expenses. And so my new rent will not outpace my ability to pay for this unit. And so I am going to cover the unit myself, I'm going to cover those expenses myself and I'm going to lock the door. And the result, as you know, Alex, is by the Rent Guidelines Board's own disclosures this year from the DHCR that there are, by the DHCR's math, about 58,000 of these units that are vacant and not in circulation simply because the economics are a bet that no one in their right economic mind would take. And so we now have, we'll call it 60,000 units, that are out of circulation, with no foreseeable means to get them back on the market. No vacancy allowance, which is even more strict than the California system. California, if a regulated unit returns to the owner, the owner's entitled to a one-time vacancy reset to bring that unit to a market-rate rent. We don't have that, even though this is, in my mind, a foolish policy because the vacancy reset actually doesn't cause an affordability problem for any sitting tenant, right? The unit is vacant. There's no one in the unit. It's simply to get the unit closer to what the market will bear. And forget about, you know, the market will bear, but what is prudent to run the building safely and efficiently today?

Alex Lycoyannis: Christina, there was so much material in there. I think, again, this is yet another podcast we could do. Maybe we have to do parts two and three.

Christina Smyth: You might have to do parts two and three, yeah.

Alex Lycoyannis: Yeah, based on everything you're raising here, and I think you make a lot of fantastic points, and they're points that have been raised ad nauseam over the last number of years, especially as to those 58,000 apartments, which, again, just based on the operation of economics 101, what did we see recently? That New York City rents reached a record of over, I believe it was over $6,000 a month. Because when you look at the entire universe of apartments in New York City, both rent-stabilized and not rent-stabilized, when you take 60,000 units off the market, when you constrict the market by that much, prices have only one place to go, and that's up. So, again, maybe those economists on the Rent Guidelines Board might have something to say about that. And speaking of the Rent Guidelines Board, in this post-HSTPA world we're all operating in, Mayor Adams appointed you to the Rent Guidelines Board in 2022 as one of the owner representatives. And of course, in June of 2026, you resigned to great fanfare and to a lot of news stories. And a lot was said about your resignation. You've spoken about it at length and the fallout from your resignation from the board. You've talked a lot about that elsewhere in other podcasts, in other forums of various types. And I'm not going to ask you to repeat it ad nauseam here. If you are listening and you're curious about all of that, if you Google Christina Smyth and Rent Guidelines Board, a lot will come up. So I urge you to do that. But Christina, the one thing I will ask here today, though, is having observed the Rent Guidelines Board process from the inside, and without mentioning any specific person or a group of people, what did your experience on the inside teach you about the challenges of balancing affordability concerns, housing preservation and the economic realities facing building owners?

Christina Smyth: Yeah, I mean, I took the appointment to be a spokesperson for owners, and in the process, I realized that, and not for the first time, but sort of brought it into fine view, that there is an affordability problem here in New York City. And the one thing I'll say is that the resources for tenants are much more vast in terms of subsidies, the Senior Citizen Rent Increase Exemption, the Disability Rent Increase Exemption and also vouchers. There are mechanisms to assist tenants with affordability problems, and even all the new construction, 485X requires an affordability component. And so what I most objected to is that it's so clear to anyone living here in New York City and paying a Con Edison bill that our expenses have gone up. And if our expenses have gone up to light our individual units, that means that owners' expenses have gone up as well to light their buildings and their common areas and their outdoor areas. And that's only one concern. And so what I think where the board tries to strike a balance, I found this year's decisions to be not resonant with what the needs of these building owners are. And so, you know, the choice was mine alone to resign from the board in protest. And so, I don't think that the board got it right. I think that it's clear that my position on that. And I'm not really sure where that adjustment goes from here, right? Because it does seem like expenses are spiraling and there isn't relief in sight, even though I certainly have some suggestions, a vacancy reset being one of them, which I called on the governor to address straightaway, right? Because again, I'm mindful of tenant affordability, and I think that the city needs to do more for landlords. I think that there needs to be an overhaul of the tax system. I mean, there needs to be some help with insurance costs. And the governor needs to pay attention to these 70,000 units that are sidelined. And I often think to myself, if I were to ever run for public office, I think I would like to be a politician who put 70,000 units back into circulation to give relief to these renters who are trying to move to New York and paying $6,000 a month on their first apartment, which is way more than my first apartment, probably more than your first apartment, Alex. It's really untenable. And so that's my hope really for the future, is that there is some assistance on the balance sheet of landlords in the form of real estate tax reform, insurance reform and this very important vacancy reset that I think is in the power of our current government.

Alex Lycoyannis: So, Christina, are you making news on this podcast, saying that you might be running for office?

Christina Smyth: We'll see what the next moves are. Nothing major to announce, but certainly something that has been discussed and talked about.

Alex Lycoyannis: Wow. I wasn't expecting this today, but I appreciate that, Christina. And you know, I have a lot more on my list here. And when I joked before about having parts two and three of the podcast, maybe it's not a joke. Maybe we have to talk about the rest of what was on my list here. But the one final question I'll ask, and we'll wrap up on this one. You mentioned a moment ago some of your preferred items or improvements that could be made regarding tax reform, regarding various items that would make things easier and provide relief to owners. But looking at the rent stabilization system specifically, I think you mentioned vacancy resets. What are one or two other items, or one or two other tweaks, that could be enacted right now or with relatively minimal effort by the legislature that would provide immediate relief? So in addition to vacancy resets, you mentioned, you know, we talked about IAIs. Could IAIs be reformed? Is there something else that could be done immediately that could at least relieve some of the pressure on rent-stabilized owners?

Christina Smyth: Yeah, so this is a very good question and a timely question. With the backdrop of the pied-a-terre tax and requiring owners of condominiums and cooperative apartments to prove that they primarily reside in their units, there is a construct in the rent stabilization law and code that requires, and in every rent-stabilized lease that requires, that a stabilized tenant primarily reside in their apartment. And these cases are the most objectionable to me. I'm certainly currently pursuing some with my team here at Smyth Levenson in the court because if you are making a very handsome salary, and you're living in a grossly subsidized, rent-stabilized unit, or not living, as the case is, but using it on a pied-a-terre basis, I don't see how this is an even application of the law. And I think that we need to return to a means test. This has been a belief of mine all [the] time. Even when we had the ability to reset rents on a vacancy, I think that a means test would go a long way in freeing up some of these units that are being held by individuals who have left our great city and moved on because of jobs or marriages or divorces and have sort of conducted their lives, but have not relinquished possession of these units. I think if I had a wish list, we would have a vacancy reset and also a means test based either on income or similar to this rollout of the pied-a-terre tax, let's just list all the rent-stabilized tenants and cause them to prove their primary residence as well.

Alex Lycoyannis: Well, that's really thought-provoking. I never really thought about it that way, Christina, but I think you gave me and the listeners some food for thought. As we wrap up here, is there any final notes that you want to leave with the audience about rent stabilization and the path forward as we move forward in the current system today?

Christina Smyth: I believe that housing is an ecosystem. So wherever market-rate apartments can help subsidize the 1 million grossly under-market apartments, I think that that ecosystem has to be able to thrive. And it's presently limping along in sort of a sickly manner. I think that there are some very obvious solutions that are not getting sort of through to the lawmakers, and that is the biggest objective, is to just get a housing ecosystem that works for everyone in New York City. It works for the owners, and it works for the tenants. And I think right now, because we just saw the market average hit above $6,000, it's not working. HSTPA is clearly not working as an affordability adjustment because we're in one of the highest market-rate worlds that we've ever seen. And so I think the ecosystem needs some help. It needs some nutrition. It needs some basic adjustments so that we can get more people into more good, clean, safe units and buildings and give landlords the means to pay for those buildings. 

Alex Lycoyannis: Well, again, it's like the amount of podcasts we're going to have to have to discuss all of this is just exponentially increasing. Those were very wise words. And I really, really appreciate your time today and your insights and telling the listeners your experiences and your proposed solutions for rent-stabilized housing in New York City.

Christina Smyth: It's been fun talking to you and your career also, so admirable, and I'm always watching what you're up to, and I appreciate being a colleague of yours and a friend.

Alex Lycoyannis: I'm blushing right now. So I think Christina says things in exactly the right way. So, I thank her very much, and thank you all for listening to the latest episode of the "Real Estate Law Unlocked" podcast. If you have any questions, feel free to reach out to me or to Christina. We'd love to talk to you and follow up, and take care. Have a great day.