Facing pressure from Gov. Andrew Cuomo and Assembly Democrats to strike a deal to extend the city's rent laws, a politically influential real-estate group is opening the door to modestly expanding some rent regulations.
The board of the Rent Stabilization Association, a group of large and midsize residential landlords, on Friday held a meeting in which the organization agreed to move off of its long-held position that the existing law must be renewed in its current form, people familiar with the matter said.
The move by the group is significant because it signals that negotiations on the city's rent laws, which govern rules for about one million rent-stabilized apartments in New York City, could get under way in earnest, likely starting Monday.
The legislative session is scheduled to end early this week. Rent laws are one of the final issues.
The current rent law is slated to expire Monday, after receiving a temporary extension last week.
The Rent Stabilization Association is one of the largest financial supporters of state Senate Republicans, and the two have been aligned in their position on rent.
Neither the Senate Majority Leader Dean Skelos nor the Rent Stabilization Association has been engaging in substantive negotiations on the rent laws up until now, resisting pressure from the Assembly and the governor, people familiar with discussions said. The reticence appears to be a bet that by waiting until the end of legislative session, their leverage would increase.
"Sen. Skelos still believes that the current rent laws should be extended, but this issue will ultimately be decided through continued negotiations with the governor and Assembly," said a spokesman for Mr. Skelos. 'We are confident that we can resolve all of the outstanding issues before us, including the property-tax cap and rent control, before the session concludes."
Seeking movement on the issue, Mr. Cuomo on Thursday afternoon met with leaders of the real-estate industry, including Rent Stabilization Association President Joseph Strasburg, and pressured them to start negotiating, people familiar with the meeting said.
A spokesman for Mr. Cuomo said negotiations were continuing. "The governor is working to strengthen rent laws," he said.
Currently, any time rent exceeds $2,000 a month on a vacant, rent-stabilized apartment, a landlord can convert it to market rates.
On Friday, the Rent Stabilization Association's board acknowledged that in order to strike a deal, the organization would support some increase in that $2,000 minimum, people familiar with discussions said.
Among other issues, moderate Democrats have been pushing to increase that number significantly, while some Democrats have pushed to forbid any deregulation.
It remains to be seen how negotiations will end up, given that influential interest groups on both sides—the landlords, aligned with Republicans, and the advocates of rent stabilization, aligned with Democrats—are still quite far apart in their positions.
Write to Eliot Brown at eliot.brown@wsj.com
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