A New York City panel charged with regulating the rents for roughly one million rent-stabilized apartments is expected to approve on Tuesday the highest increases in almost a decade, after property owners said they were being pinched by taxes and rising expenses for fuel and labor.
The panel, known as the Rent Guidelines Board, is expected to approve increases on one-year leases by between 2 to 4 percent, and on two-year leases by 4 to 6 percent.
Many tenants argued for a rent freeze or rollback, while landlords were seeking even higher increases, but the panel had signaled its intent to support a middle-ground approach at a meeting last month. The expected vote will take place at a meeting in Manhattan on Tuesday evening.
New York City, already one of the most expensive places to live in the nation, has seen the cost of living rise amid a rebound from the worst of the pandemic. Soaring inflation has hit tenants and property owners, and the effect on the latter group’s ability to maintain their buildings was one of the major factors considered by the board. But the vote also intensified concerns about the dearth of affordable housing and the sustainability of the city’s recovery.
The annual vote is always fraught and draws intense protests and lobbying from advocates for both tenants and landlords. But this year’s vote comes after tens of thousands of renters lost their jobs and struggled to make payments during the pandemic.
It is also the first vote to take place during the administration of Mayor Eric Adams, with the board poised to approach it differently than it had under Mr. Adams’s predecessor, Bill de Blasio.
While Mr. Adams has said that he lobbied the board to adopt lower increases, he has also expressed sympathy for small property owners who need rental income to compensate for rising expenses needed to maintain buildings.
“We are hoping that the Rent Guidelines Board, an independent board, will make the right decision for those New Yorkers who are struggling, and then also look after the small property landlords, the small property landlords who are also really devastated from inflation,” Mr. Adams said during an interview on the radio station 1010 WINS on Monday. “And that is very important as we make this important decision for New Yorkers.”
Mr. de Blasio focused more on reducing costs for renters. During his tenure, the highest annual increases approved by the board were 1.5 percent on one-year leases and 2.75 percent on two-year leases. Inflation was also relatively low during his administration.
The last time there was a significant increase — 4 percent on one-year leases and 7.75 percent on two-year leases — was in 2013.
After the increases are approved on Tuesday, they will apply to leases that begin on or after Oct. 1.
New York City’s rent-stabilization system, a form of rent regulation first put in place in the late 1960s, remains a crucial source of affordable housing.
The median income for people living in rent-stabilized homes is about $47,000, compared with $62,960 in unregulated homes, according to a recent city survey. The median monthly rent for rent-stabilized apartments is $1,400, according to the survey, compared with $1,845 for unregulated homes.
And rent-stabilized rents stand in stark contrast to the exorbitant prices seen in recent months in some part of the city: The average rent on an apartment newly leased in May was $4,975 a month, a 22 percent increase from the year before, according to a new report by the real estate firm Douglas Elliman.
The expected outcome on Tuesday will be a blow for tenants, many of whom are among the lowest income New Yorkers and who were struggling to pay their rent even before the pandemic. Housing advocates had lobbied aggressively in the last several weeks for the board to reverse course and support a rent freeze or rollback.
At the panel’s public hearing last week in the Bronx, more than 60 out of roughly 70 speakers were tenants and tenant advocates who argued for a rent decrease or a rent freeze. Many of the speakers grew emotional during their testimony, expressing hopelessness in the face of any increases and frustration over the poor conditions in their homes.
Kim Statuto, 62, of the Bronx, said she has lived in her rent-stabilized home for almost 30 years, but struggles every month to allocate the money she receives from monthly disability payments to cover her $1,783 monthly rent, along with electricity, food and medical bills.
“A rent increase would further hurt my income,” she said.
The increases expected to be approved on Tuesday will also disappoint landlords, who said that buildings would deteriorate without additional rental income to make up for the increased expenses. Landlords have said they are being squeezed by tough new laws passed in 2019, which restricted their ability to raise rents when an apartment became vacant or was upgraded.
Bryan Liff, a landlord who testified at the meeting last week, pushed for rent increases of at least 8 percent, and said rental income was already too low to bring many units up to livable standards. But he said he was “demoralized” by what appeared to be a foregone conclusion on behalf of tenants, and that “decisions seem to be based on who screams the loudest.”
Both Mr. Adams and landlord groups have keyed in on the difficulties experienced by “mom and pop” landlords when arguing in favor of rent increases.
But because existing laws make it difficult to determine who actually owns any given building, it is not clear how many of the owners of rent-stabilized homes are actually smaller property owners versus landlords with much larger and more diversified portfolios.
One rough analysis conducted by the staff of the board in June 2020 suggested that more than 61 percent of rent-stabilized units were owned by landlords that owned 10 units or less.
But a separate analysis of property records released last week by the group JustFix.nyc, a technology company that tracks property ownership, suggested just the opposite: that more than 60 percent of rent-stabilized homes are owned by landlords with portfolios of more than 1,000 units overall. In contrast, about 1 percent of rent-stabilized units are owned by landlords that own less than 10 units overall.
“The data unequivocally shows that large landlords own the vast majority of rent-stabilized housing in New York City,” the group said last week.
Téa Kvetenadze contributed reporting.
Source: NY Times