New York City is about to get even more expensive – especially for those in rent stabilized apartments. Earlier this week, the Rent Guidelines Board voted to end rent stabilization rent freeze for the city’s 1 million rent-stabilized apartments.
One-year leases will be subject to 1.25 percent raises while two-year leases are subject to 2 percent increases. Increases will take effect beginning October 1st and apply all the way until the end of next September.
The preliminary vote in April showed the Rent Guidelines Board voting in favor of the proposal to increase one and two-year leases between one to three percent and two to four percent, respectively.
Though the final vote veered to the more conservative side, not everyone was happy with the outcome. Tenants wanted a third consecutive rent freeze whereas landlords and owners wanted an even larger increases to help offset the cost of the previous two-year freeze.
Pro-tenant protesters not only demanded a freeze but a rollback in existing rents to help erase the rent increases executed during the Bloomberg administration.
On the other hand, landlord supporters wanted the increase to be higher.
President of the Community Housing Improvement Program, Matthew Engel, said the vote was “a very, very small step in the right direction…but it is not enough to reverse the damage” of the past two-year rent freeze.
City Hall spokesperson Melissa Grace and the Mayor’s office had a slightly more positive outlook.
“We will never go back to the days when the landlord lobby got big rent hikes regardless of what the data said. Taken together, the past four years have seen the lowest guidelines in history – including the first two freezes ever – and a historic court ruling affirming the importance of tenant affordability in this equation,” she said.
Board members did say their decision is based on a formula that takes into account landlords’ operating costs. They found a 6.2 percent increase in price index for operating costs in 2016 and project a 4.4 percent increase next year.
J. Scott Walsh, RGB Member as a Landlord representative was not pleased with the outcome and cautions how these historically low increases could result in landlords deferring building maintenance, “It’s a great time for tenants to have extremely low annual increases. I would be cautious about moving into anything other than brand new buildings as these increases don’t cover maintenance costs. In an older property, a tenant could face maintenance issues because the landlord simply doesn’t have enough funds.”
The board members also considered numerous tenants have stagnant incomes while the cost of living continues to increase.
Low rents help keep existing below-market-rate housing. This is a key issue for Mayor Bill de Blasio, who is running for re-election.
He’s made affordable housing a fundamental issue of his campaign and with much of the housing law and policy controlled by the state government, the Rent Guidelines Board is a way for the Mayor to exercise control over housing costs.
And while he openly supported rent freeze in the past, he decided not to publicly support it this time.
Let us know what you think of the boards decision. Are you pro-rent stabilization or think there are better ways the city could subsidize housing costs?