Vacancy increase, defined
A vacancy increase was an extra rent hike — beyond the normal renewal increase — that owners of rent-stabilized apartments in New York were once permitted to charge whenever a unit turned over between tenants. It typically ran alongside a companion rule called vacancy deregulation, which could remove a unit from rent stabilization altogether once its legal rent crossed a set dollar threshold at vacancy.
Both rules are gone. The 2019 Housing Stability and Tenant Protection Act (HSTPA) eliminated the vacancy increase and vacancy deregulation statewide. If you own a rent-stabilized building in Brooklyn, Manhattan, or anywhere else in New York, there is no longer a way to charge more rent simply because the previous tenant moved out.
How it used to work — and why it changed
Before 2019, when a stabilized tenant vacated, an owner could add a percentage increase to the unit's legal rent before re-renting it, and in some cases combine that with vacancy deregulation to take a high-rent unit out of the stabilization system entirely. Lawmakers concluded this created a strong financial incentive to push tenants out — through harassment, non-renewal, or neglect — since turnover itself became profitable.
HSTPA closed that loophole. Since June 2019:
- The vacancy increase is eliminated — no extra percentage applies at turnover.
- Vacancy deregulation is eliminated — a stabilized unit can no longer exit stabilization based on reaching a high-rent threshold.
- IAI and MCI increases — the two remaining ways to adjust rent above the annual Rent Guidelines Board figure — were capped and made subject to amortization schedules and per-building limits, closing off the workaround of relabeling a vacancy increase as an "improvement."
- Preferential rent generally carries over at renewal rather than snapping up to the higher legal rent, which further removed the financial upside some owners once saw in turnover.
Why it matters for owners of rent-stabilized and subsidized buildings
This is one of the most common misconceptions we hear from owners who are new to managing stabilized property, or who are transitioning a building from a prior manager who wasn't current on the rules. Two mistakes show up repeatedly:
- Assuming turnover means a rent reset. It doesn't. The new tenant's legal regulated rent picks up from the prior tenant's registered rent, adjusted only by lawful RGB, IAI, or MCI amounts — never by an automatic vacancy bump.
- Treating voucher tenancies differently at turnover. Some owners assume that once a unit is vacant, they have more flexibility on price or more room to decline a prospective tenant who holds a Section 8, CityFHEPS, or HASA voucher. Neither is true. The same post-HSTPA rent rules apply regardless of how the incoming tenant pays, and refusing a qualified applicant because of their voucher is illegal source-of-income discrimination under the NYC Human Rights Law. Our government housing programs and Section 8 voucher management services exist specifically to help owners navigate turnover the right way — compliant and without leaving income on the table.
Charging an unlawful vacancy-style increase, or misreading how much a unit can legally rent for after turnover, is a fast route to a DHCR overcharge complaint — one of the more expensive mistakes an owner of a stabilized building can make.
Common misconceptions, clarified
| Misconception | Reality |
|---|---|
| "I can raise the rent extra since the old tenant moved out." | Not since 2019. Only RGB, IAI, and MCI increases apply — no separate vacancy bump. |
| "A vacant unit can be deregulated if the rent is high enough." | Vacancy deregulation was eliminated by HSTPA; a stabilized unit stays stabilized regardless of rent level. |
| "Voucher tenants at turnover are a special case." | They are not — the same rent-stabilization rules apply, and declining them for using a voucher is illegal. |
| "Preferential rent resets to the legal rent at turnover." | Preferential rent generally carries forward under HSTPA's renewal rules, not automatically at vacancy. |
The bottom line for Brooklyn owners
The vacancy increase is a relic of pre-2019 law. Today, turnover in a stabilized unit is an opportunity to confirm the DHCR rent history, screen and place a qualified tenant quickly, and keep the building compliant — not a moment to look for an extra rent bump that no longer exists. This is exactly the kind of detail that trips up owners without hands-on rent-stabilization experience, and it's why turnover on stabilized and subsidized units is something our team manages directly rather than handing off to a leasing generalist.
Not sure whether a unit in your building is being priced correctly after a recent vacancy? Schedule a Property Consultation or call 718-568-9278 — we'll review the registered rent history with you and make sure your next lease is fully compliant.
This page is educational and not legal advice. For guidance on a specific building or tenancy, consult a qualified New York attorney.