Why “good cause” or “just cause” eviction risks undermine housing markets

In April 2024, New York State passed a sweeping “Good Cause Eviction” law, significantly restricting landlords’ ability to remove tenants and imposing new limits on rent increases. The law took effect immediately in New York City while allowing other municipalities across the state to opt in with adjustments tailored to local housing markets. While the stated goal of the law is to protect tenants from evictions and unexpected rent increases, it risks destabilizing local rental markets by discouraging new housing investment and entangling landlords and tenants alike in complex disputes. These legal changes can strain landlord-tenant relationships, shifting previously cooperative interactions into adversarial ones marked by defensiveness and mistrust.

In effect, “Good Cause” transforms lease renewals from a private contractual matter into a judicial process, one that assumes bad faith on the part of landlords and imposes procedural hurdles that are difficult to meet, especially for small property owners. As of June 2025, five states—California, New Hampshire, New Jersey, Oregon, and Washington—and a number of cities nationwide, along with at least 15 New York municipalities, have adopted versions of the law, most often using “just cause” rather than “good cause” as in New York—a number that may grow unless policymakers understand the unintended impact of this legislation.

New York’s law is the latest and most stringent example. In Oregon and Washington, landlords cannot increase rent by more than 7% plus the Consumer Price Index (CPI), with a maximum cap of 10%. In practical terms, this means that if inflation runs at 3%, landlords can raise rent by up to 10%—but if inflation is just 1%, the maximum allowable increase would still be 8%.

In New York, for tenants covered by the law, annual rent increases are capped at the lesser of 10% or 5% plus the regional CPI—a threshold that functions similarly to traditional rent control measures. Landlords may provide reasons for a higher rent increase for the court to consider, such as significant repairs or increased property taxes. To legally deny a lease renewal, landlords must now demonstrate a “good cause,” broadly defined to include nonpayment of rent, substantial lease violations—such as unauthorized alterations or illegal activity—substantial damage to the property, or refusal to allow access for repairs. Although these exceptions may seem reasonable, the reality is more complicated. The combination of vague and rigid definitions makes it significantly harder to remove problematic tenants, even in cases where their behavior undermines the quality of life for neighbors or presents persistent management difficulties. While these provisions make it harder for landlords to arbitrarily evict a tenant—and given that evictions are not easy in any case, it seems unlikely there are a lot of baseless evictions—they swing the pendulum very hard in the other direction.

One of the primary issues with Good Cause Eviction is that the burden of proof falls entirely on the landlord, especially after the initial lease term has expired. Once a tenant has completed the first 12 months, the lease effectively becomes permanent, unless the landlord can demonstrate one of the legally defined “good causes” for non-renewal. For example, if a tenant begins engaging in disruptive or illegal activity, such as the ongoing sale or distribution of controlled substances, the landlord must prove that the unit is “customarily or habitually” used for that purpose. This bar is exceedingly difficult to meet. Most small landlords lack the capacity to conduct surveillance or gather the necessary documentation, and local law enforcement may be unresponsive unless an active criminal case is already underway. As a result, problematic tenants can remain in place indefinitely, even if their behavior significantly affects the safety, comfort, or property values of surrounding tenants. While some degree of evidence is certainly necessary to break a contract, the law offers little flexibility when a tenant’s conduct becomes intolerable only after the original lease period has passed.

Although specifics vary by municipality, NYC, for example, offers more legal support to tenants than landlords throughout such litigations. In NYC, tenants facing eviction proceedings—whether in Housing Court or through New York City Housing Authority (NYCHA) administrative processes—are entitled to free legal representation under the city’s Right-to-Counsel program (also known as Universal Access). At the time of the program’s creation, the idea was to balance the access to such help from both parties since landlords were seen as more affluent than tenants. However, since no such program was ever put in place for landlords, they have no such guaranteed right to free legal representation. Most landlords must hire private counsel at their own expense or attempt to navigate Housing Court on their own. While some nonprofit or bar association resources exist for landlords, access is not universal, not guaranteed, and rarely sufficient to meet the demands of complex eviction proceedings. The result is a highly asymmetrical legal process: tenants benefit from publicly funded legal teams, while landlords are left to bear the financial and procedural burden of defending their property rights unaided.

Good Cause Eviction laws often have exemption thresholds that can unintentionally discourage small-scale rental growth. California’s law only applies to corporate-owned units, Oregon exempts owners of one or two units, and Washington exempts single-family homes. Under New York City’s version, landlords who own 10 or fewer units are exempt, while those with larger portfolios must comply with the new requirements. Some municipalities have gone even further. Albany, the state’s capital, narrowed the exemption to apply only to landlords with more than one unit. Rochester, the state’s fourth-largest city, with a population exceeding 200,000, adopted the same stricter standard.

While these exemptions are designed to protect small housing providers, they can create strong disincentives to increase the number of available units. Once landlords exceed the exemption threshold, they become subject to additional regulations, which may deter them from expanding. This is a problem because small and midsize landlords (defined as those with 3-20 units) often fill an important niche in the housing ecosystem. Unlike corporate landlords, they are more likely to live in the communities where they rent, maintain direct relationships with tenants, and offer a degree of flexibility that larger property management companies simply can’t match. When policy discourages this class of landlord from growing—or drives them out entirely—it shifts the rental landscape toward larger operators who might not have the personal touch and incentive to build and improve the community. In the long run, this creates a rental market that is less responsive, less personal, and ultimately less stable for the very tenants the law was designed to protect.

In its effort to strengthen tenant protections, New York’s Good Cause Eviction is undermining the very stability it is looking to promote. By shifting the legal balance disproportionately toward tenants and creating disincentives for small-scale housing providers, the law is likely to reduce the availability of quality rental housing over time. If small and midsize landlords—who often offer more community-rooted, flexible housing options—are pushed out or discouraged from expanding, the rental market will increasingly be shaped by large institutional actors with less personal investment in tenant well-being. As more municipalities consider adopting similar legislation, it is critical that policymakers take a closer look at how these rules operate in practice. Without a more balanced, evidence-based approach, the long-term effects may include reduced housing supply, higher costs, and a rental landscape less equitable for both tenants and landlords.

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