New York's Squatters Approach Permanent Housing Rights

loft law passed squattersNew York's Legislature recently voted to make the often-extended Loft Law permanent. With the governor expected to sign that bill, loft tenants will have the state's support in battling unfair rent hikes and possible eviction. From Lower Manhattan to the Bronx, artists living in commercial and manufacturing spaces would be ensured that housing standards will apply to their once-illegal dwellings, but would this encourage the practice of squatting?

A recent Rented Spaces story told you about the increase in a new breed of squatters around the U.S. Squatters that were once down-on-their-luck artists are now coming from every sector -- it seems the down-on-your-luck theme has expanded.

Will this new law encourage more squatting to get good real estate, or is it just righting things in New York by helping create and maintain more affordable housing where it's rapidly disappeared?

The term "squatter" was used a lot in New York in the 1970s and '80s to describe those living in spaces without paying rent or, in many cases, obtaining permission to occupy. That is not the case with these units. Most occupants of these loft and commercial spaces are paying rent and have entered into an agreement with building owners. But they want the same standards and codes applied to these converted living spaces that exist in other apartments. Without this law, the city could evict them, as they occupy spaces not designated as living spaces and not up to code.

The Loft Law initially was enacted in 1982 when Soho and Lower East Side loft spaces had been occupied for years with tenants living in substandard conditions. The idea was to protect tenants and building owners by insuring that the space is safe for people to live in. The law protected residential tenants from substandard conditions, arbitrary evictions and unfair rent increases. It was updated in 1987 to include more loft spaces.

The newly passed Loft Law, permanently extends housing law protections to more residents in commercial and manufacturing buildings that have been converted into residential use, according to the New York Senate.

State Sen. Martin Dilan sponsored the bill and says: "Thousands of people living in the city call these lofts home. Many of these units have escaped most of the tenant protections offered to traditional rentals. This legislation will bring these properties up to code, protecting tenants and landlords investments."

Gary Malin, president of Citi Habitats Sales and Rental Real Estate in New York has only good things to say about the bill. "It's the right thing to do to protect all involved. I think it's just recognizing the reality -- people are using them as residential places and they should legitimize that aspect of them. It's always good to have good zoning and now owners have an opportunity to do what's needed."

Sen. Dilan sees this change in status as not only helping these tenants but these neighborhoods. "Lofts offer a unique opportunity to convert defunct manufacturing space into livable, revenue-generating space," he says. "Tenants who have moved into these older, vacant buildings have sparked new life into what were at one time bustling commercial hubs. In doing so, they have rebuilt communities and in some instances built new ones."

While many loft dwellers are obviously happy with the bill, how would it affect the New York real estate market? Lots of lofts would become rent-stabilized and brought to code, and with so many of them in desirable spots this surely would affect the market.

Again, Malin sees that as a good thing, but not anything that will cause major waves.

"Until people can leave [the units] it won't have an impact," he says "In the short run most of the units are occupied and so won't hit the market now. Over the course of time you will have more inventory coming on because of them. Long-term it's always good to have more units. It won't be anything big though, because they will get absorbed into the market as normal. Long-term however, it's untapped value for those owners."

So it will be good news for those living in these lofts, as they get to stay in them at an affordable rent, and will see them brought to code.
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