Newsman: Tenants in New York City’s roughly 1 million regulated apartments are facing the biggest rent hike. The Rent Guidelines Board has signed off on hikes of as much as 3.25% for new one-year leases for the New York City’s roughly 1 million rent-stabilized apartments. The rents set by the board impact one in every three New York City households. Tenant campaigners say the current ranges are still too much and will likely force people from their homes as their budgets are already burdened by inflation — while landlords say they need even larger increases to deal with soaring prices.
The board’s two tenant representatives, Sheila Garcia and Adán Soltren, joined public member Christian González-Rivera and landlord representative Robert Ehlrich in opposing the increase—Ehlrich wanted a larger hike. Reiss, three other public members, including Mayor Eric Adams’ appointee Arpit Gupta and landlord representative Christina Smyth, approved the new rates.
Roughly 2.4 million people live in New York City’s rent-stabilized units. New two-year leases for rent-stabilized units can jump by 5% as a result of Tuesday night’s 5-4 board vote.
The increase applies to leases signed between Oct. 1, 2022 and Sept. 30, 2023. Last year, the board voted to enact a mid-year increase of 1.5 percent on one-year leases and 2.5 percent on two-year leases.
The nine-member Rent Guidelines Board (RGB) voted Tuesday to raise rents by 3.25 percent on one-year leases and by 5 percent on two-year leases, marking the highest increase for rent-stabilized apartments since 2013. Each board member is a mayoral appointee and typically approves a proposal favored by the current mayor.
Mayor Eric Adams had called for a rent increase to protect small landlords who represent a dwindling share of the city’s housing market.
“While we raised our voices and were successful in pushing the increases lower, the determination made by the Rent Guidelines Board today will unfortunately be a burden to tenants at this difficult time — and that is disappointing,” Mayor Eric Adams said in a statement following the vote.
“At the same time,” he added, “small landlords are at risk of bankruptcy because of years of no increases at all, putting building owners of modest means at risk while threatening the quality of life for tenants who deserve to live in well-maintained, modern buildings.”
The last of Mayor Michael Bloomberg’s tenure, the board raised rents by 4 percent. Under Mayor Bill de Blasio, the board never raised rents by more than 1.5 percent and on three occasions froze rents for the only time in the five-decade history of rent stabilization.
The vote comes a month after the rent board set the ranges for hikes at 2 to 4 percent for one-year leases and 4 to 6 percent for two-year leases. Initially, officials had floated potentially hiking rents as much as 9 percent on two-year leases, resulting in fierce pushback from the City Council. Both landlords and tenants confront spiraling inflation and a potential recession.
RGB Chair David Reiss, a de Blasio appointee, introduced the proposal as tenants who had called for a rent freeze or rollback jeered in the auditorium at the Cooper Union, where the vote was held.
“I believe this proposal best balances the needs of owners, who must pay for costs that are increasing significantly, as well as tenants who are still dealing with lingering effects of the pandemic,” Reiss said.
He cited the rising costs of fuel, insurance and maintenance for landlords, while also acknowledging that “rent stabilized housing is unaffordable for many tenants.”
The 1,006,000 rent stabilized units across the five boroughs account for 28 percent of the city’s total housing stock and 44 percent of all rental units, according to the most recent Housing and Vacancy Survey published last month by the Department of Housing Preservation and Development. Tenants in stabilized units receive relatively modest increases compared to non-regulated apartments, where median rents are reaching record highs since a COVID-related drop in prices. They also receive protections against no-cause eviction, even after their lease expires.
More than half of rent-stabilized tenants pay over 30 percent of their income on rent, according to the board’s data. Median rent was $1,400 in rent stabilized units last year and about 20 percent of units had three or more maintenance deficiencies, the city’s recent Housing and Vacancy Survey found.
Rent-stabilized tenants, their advocates and several other elected officials slammed the decision and said it is not fair to compare the experience of landlords, who own property that they can sell in New York City’s overheated housing market if they cannot afford their mortgage or other costs, with that of tenants who face eviction and uncertainty if they cannot make payments.
“By hiking rents far higher than a realistic assessment of costs, the board is capitulating to property owners—with dire consequences for the approximately 2.4 million rent regulated tenants who will be hard pressed to afford their home,” said Comptroller Brad Lander.
Lander had previously questioned the board staff’s assessment of tenant and landlord costs. He said the analysis did not take into account the true extent of the economic crisis on low- and middle-income people of color who account for the large majority of stabilized tenants.
City Council Housing Chair Pierina Sanchez called the vote “a shameful outcome.”
“Tonight’s vote will add to the crushing weight destabilizing our communities,” Sanchez said
RGB members weigh landlord costs, including property tax rates, water utility prices, maintenance and insurance, as well as larger economic trends as they make their decision. A report prepared by RGB staff based on 2020 data and released in April shows that landlords managed to earn income from “nearly all buildings” with stabilized units, but their net operating income fell by 7.8 percent, the biggest drop since 2003.
At a public hearing June 8, property owner Helen Greenberg testified that her building dates back to 1869 and requires “constant care, repairs and upgrades” along with administrative fees for inspections. She said she needs the rent increase to keep up.
At the same hearing, Sunset Park tenant Nora Huertero, a mother of three, said her building’s boiler broke for four days in the winter and that her landlord has failed to cash rent checks. If rents rise, she said, “I will have to work more hours and that means I will spend less time with my kids.”
“Rent is already high and they are trying to chase us to raise rents,” she added. “We are just recovering from the pandemic and inflation.”
Advocates and members on all sides of the issue called for adjustments to the annual battle between landlords and tenants. González-Rivera, one of the five public members, said state and city government should provide “more generous” tax abatements for property owners who make repairs instead of raising rents.
“One part of government is sending owners a tax bill, while the other, the RGB is sending that tax bill over to tenants,” González-Rivers said. “We need to blow up this system.”
Goddard Riverside Organizing Director Larry Wood said tenants end up penalized through a “one-size-fits-all rent increase,” even if their landlord is turning a profit.
“There’s got to be a way to distinguish between owners who have real hardships and the majority that are doing quite well,” he said. “It’s unconscionable that there would be a rent increase.”
Jay Martin, head of the rent-stabilized landlord group Community Housing Improvement Program, countered that the increase did not go far enough and said more money is needed to keep up with building repairs.
“If the RGB continues to defund rent-stabilized buildings year-over-year, then the consequences will be dire for renters and their housing providers,” Martin said. “It is expensive to operate rent-stabilized buildings that are more than 80-years old. If the rents aren’t going to pay for it, the government needs to find other ways to lower the costs.”