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Rent Guidelines Board Votes Through Rent Increases for 1 Million NYC Apartments


Housing in the Bronx (photo: Michael Appleton/Mayoral Photography Office)


Update: On Tuesday evening, the Rent Guidelines Board voted 5-4 to approve rent increases of 3.25% on one-year leases and 5% on two-year leases for the roughly 1 million rent-stabilized apartments in New York City.

Many elected officials quickly condemned the decision, calling the increases too high, though they are lower than what the board's independent analysis showed building owners need to cover rising costs. Still, many rent-stabilized tenants live on fixed or low incomes and are struggling with their own rising costs given inflation, and it is the highest increase in nearly a decade.

“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 Adams said in a statement Tuesday evening. "At the same time, 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."

“This system is broken, and we cannot pit landlords against tenants as winners and losers every year," the mayor continued, adding that he "will be fighting in Albany for additional support for tenants who are at risk of missing rent payments and landlords who are struggling to maintain and upgrade their buildings.”

Read much more in Gotham Gazette's story about the Rent Guidelines Board published Tuesday morning:

***

On Tuesday, June 21, the New York City Rent Guidelines Board is set to vote on rent increases for the tenants in roughly 1 million rent-stabilized apartments across the five boroughs, home to about 2 million people.

Rent-stabilized housing units are generally considered among those built before 1974, with six or more units, inducted through the Emergency Tenant Protection Act (EPTA), though other units that are derived from affordable housing and tax incentive programs may also be considered rent-stabilized, according to New York City Department of Housing Preservation and Development (HPD).

The board decision comes after it undertook its usual annual process — but is the first since the end of the pandemic era eviction moratorium and under new Mayor Eric Adams, who has expressed more solidarity with landlords than his predecessor, Mayor Bill de Blasio, who exercised his power to help institute several years of rent freezes or very small increases through the mayor-appointed board.

According to the HPD’s 2021 New York City Housing and Vacancy Survey (NYCHVS) released in May of this year, there were 1,006,000 rent-stabilized housing units citywide, accounting for 44% of the city’s rental units, and 28% of the city’s overall housing stock. The survey also showed that the city’s overall rental apartment vacancy rate was 4.54% as of 2021.

It showed nearly 43,000 vacant units classified as rent-stabilized, raising questions about the status of that much-desired housing stock and how to get those apartments filled by tenants in need of affordable places to live.

In 2021, the median monthly rent for rent-stabilized units was $1,400. (For other renter-occupied units, the median was $1,500.)

After issuing its annual report and holding several public hearings, the board is making its final decision based on its own proposed rent increases in the range of 2-4% for one-year leases and 4-6% for two-year leases for rent-stabilized apartments. The decision is likely to mark the highest rent increases in nearly a decade, and will apply to leases signed between October 1, 2022 and September 30, 2023.

This year’s proposed rent increases by the Rent Guidelines Board have sparked controversy amid continued pandemic upheaval, significant inflation, and the rising costs of both providing and renting housing, as well as broader costs of living. The board is meant to take into account affordability for tenants as well as the costs for operating housing taken on by building owners and managers, including making repairs and upgrades. These and other factors, like the production of new housing falling far short of demand for many years, have been exacerbating New York’s ongoing housing crisis.

Many of the rules around rent-stabilized housing changed significantly in 2019 when the State Legislature passed and then-Governor Andrew Cuomo signed the Housing Stability and Tenant Protection Act, which removed mechanisms by which rent-stabilized units were regularly taken out of the stabilization system and put into the open market, as well as strict new limits on rent increases that landlords could assess outside of the annual Rent Guidelines Board process. Those changes, then followed by the pandemic, have made this year’s RGB decision additionally fraught.

This month, the Rent Guidelines Board has held four hearings to take testimony from the public about the possible rent increases before the final decision is made.

The board of nine, which contains two members appointed by Mayor Eric Adams and the rest holdovers of the de Blasio years, must make the decision by July 1, taking into account concerns from public officials, tenants, landlords, building owners, and developers, all while weighing data to decide what makes the most sense for the city.

The board has scheduled its decisive hearing for the evening of Tuesday, June 21, as a flood of testimony comes in from interested parties and stakeholders.

Rent Guidelines Board Make-Up and Recent History
The RGB is made up of nine mayor-appointed members, with two meant to represent tenants, two to represent building owners, and five to represent the general public. Those five are where the mayor’s perspective and appointments are often especially decisive.

For the pairs of members representing tenants and owners, one of the two serves a two-year term, and the other a three-year term. For those representing the general public, one member serves a two-year term, another for three years, and the remaining three serve four-year terms.

Two current members, Arpit Gupta, representing the general public, and Chrystina Smith, representing owners, are Adams’ own appointees made this year by the Democratic mayor who took office January 1.

Each year, the Rent Guidelines Board uses its Income and Affordability Study—released annually in April—and relevant data, such as real estate taxes, insurance and vacancy rates, and overall housing supply to assess the appropriate rent increases for rent-stabilized units.

Recent history has also included full (2020) and partial (2021) rent freezes on rent-stabilized units, as the Rent Guidelines Board took extraordinary measures influenced by the COVID-19 pandemic and other factors. Prior, the increases for both one- and two-year leases did not go higher than 2.5% from 2015 through 2019, a period that began in Mayor de Blasio’s second year in office, after he changed the constitution of the board.

The partial freeze in 2021 meant rent increases took place after six months.

This Year’s Process and Mayor Adams’ Role
In April of this year, the RGB voted through an initial set of proposed, unofficial ranges of increases of 2.7%-4.5% for one-year leases and 4.3%-9% for two-year leases. The high end of the two-year range, especially, set off a firestorm of criticism about the potential shock to renters, though the numbers were based on the board’s annual study.

After the board and Mayor Adams took considerable heat from tenants, activists, and elected officials, the board then decreased the ranges during a 5-4 vote by the RGB in May. Adams himself questioned the initial numbers, and took partial credit for influencing the board to decrease them to the percentages offered in the final unofficial proposed ranges.

“We must be fair here,” he said when asked by reporters at an April news conference. “Allow tenants to be able to stay in their living arrangements, but we need to look after those small mom-and-pop owners.”

But following the adjusted percentages proposed by the RGB, there has been continued discussion about the numbers being too high, with some claiming that increased rents could mean disaster for tenants who are already faced with other housing-related issues.

And though Adams was critical of the initial proposed potential increases by the Rent Guidelines Board, he has said he won’t interfere with the process. 

Independence is independence. That's an independent board. I made it clear that we have to find the right position to look after those small property owners, which is—they've been decimated by the increase in fuel, property taxes, so many other things,” he said during a later press conference in May, where he also stressed that there needs to be systems in place to keep the city’s property owners who were impacted by COVID afloat. “Because if we lose those small property owners, you're going to have major developers come in and then we're going to have a real problem.”

But Adams also expressed concerns for tenants, speaking as a small property owner and landlord himself. I never raised the rent of my tenants since they lived in my building. When they signed a lease, they signed a lease with me signing I would never raise your rent as long as you're there,” he said. “So we can show the compassion. At the same time, I understand what the families are going through on both ends of the spectrum.”

On June 20, New York City Council Speaker Adrienne Adams, a Queens Democrat (and no relation to the mayor), released testimony ahead of the RGB vote, calling for the lowest rent increase possible by the board.

“We cannot afford to plunge hundreds of thousands of rent-regulated New Yorkers into the chaos of a housing market that already does not have sufficient supply to meet demand, especially when our city is in the midst of demonstrating remarkable resilience in its recovery efforts,” her testimony reads. “We cannot move forward if it means leaving our most vulnerable behind.”

More Debate Over This Year’s Decision
Between March and May, the RGB held six public hearings and meetings to discuss various housing-related reports, as well as take a good deal of testimony from invited tenant and owner groups about lease adjustments on rent-stabilized housing.

In June, the board hosted a series of public hearings to take testimonies from concerned parties about the adjusted rent increases proposed in May. The first of these hearings were on June 6 and 8, dates that were added after complaints that the board would only be offering in-person hearings the week after.

A majority of testimony at the first two hearings in June was from tenants who live in rent-stabilized units, speaking in favor of lowering the percentages of the rent increases, or calling for a rent freeze in light of the pandemic and other economic issues.

At that second hearing, Manhattan Borough President Mark Levine testified on behalf of himself and eight New York City Council members representing parts of the borough, calling for a rent freeze, citing homelessness and the pandemic as prominent reasons as to why the proposed increase could be catastrophic for tenants.

Several people testified in favor of the proposed rent increases, some stating that the RGB should vote at the higher end of the percentages, and others claiming the numbers were still too low, including building owners and landlords. They cited inflation rates, costs of maintenance, increases in property taxes, and the costs of oil and water rates as their reasons for supporting the increases.

Some tenants who testified said that their landlords have been holding out on maintenance, and that they do not believe the income from the proposed increases would be allocated toward repairs, claiming that there has not been any urgency to use revenue from tenants’ rent payments for maintenance.

Among those testifying against the proposed rent increases were members of the tenant advocacy group Neighbors Helping Neighbors, and tenants from Stuyvesant Town-Peter Cooper Village, a very large set of Manhattan developments with thousands of rent-stabilized apartments. Both highlighted the challenge the proposed rent increases would pose to low-income households, older tenants, and others impacted by the pandemic and ongoing housing crisis.

Among some of the other public officials who testified at the final in-person hearing and spoke in support of tenants, as well as called for an enactment of a rent freeze, were State Senator Robert Jackson of Manhattan, Assembly Member Jeffrey Dinowitz of the Bronx, and City Council Members Tiffany Cabán of Queens and Althea Stevens of the Bronx.

“The Rent Guidelines Board should pass a rent hike of no more than zero percent. That is a modest compromise,” said Cabán at the close of her testimony, on the heels of stating that anything other than a rent freeze would be unfair to New Yorkers who are struggling to make ends meet otherwise.

Bronx City Council Member Pierina Sanchez, chair of the Council’s Committee on Housing and Buildings, also spoke at the hearing. “I am more certain than ever before that the urgency of a rent freeze is most critical today. This is corroborated by the daily experience of speaking to neighbors visiting our office who are drowning in the housing crisis facing New York City, with a vacancy rate lower than 1% in the Bronx,” she said in her statement on the impending RGB vote.

Jay Martin, executive director of The Community Housing Improvement Program (CHIP), an association made up of about 4,000 owners and managers of over 400,000 rent-stabilized housing units, has argued in favor of the proposed rent increases, and expressed his concerns that the numbers are still too low given the costs owners are facing and the artificially low decisions of the RGB during the de Blasio years.

In preparation for the upcoming vote, Martin—who also submitted testimony to the RGB—said on a recent episode of Gotham Gazette’s Max Politics podcast that he expects the board “to understand that they have a duty to look at the expenses and try and balance what is a reasonable, proportional rent adjustment based on those rapidly-increasing expenses on rent-stabilized properties.”

Like others in favor of the rent increases on the higher side of the percentage range, Martin expressed concerns about inflation, property taxes, and costs of maintenance. He also connected the RGB vote, the 42,000 vacant rent-stabilized units, and the city’s larger housing crisis.

“We need more housing. We absolutely need more housing. We need to be incentivizing development of new housing and getting new housing back on the market,” he said. “We need to be getting these units that need proper renovation back on the market.”

Martin said that tens of thousands of those 42,000 vacant rent-stabilized units are offline because they need major repairs and due to the 2019 state law there is not enough incentive for building owners to fix those apartments up and get them rented.

The final meeting where the board is set to vote will be live streamed via YouTube on June 21 at 7:30 p.m.

***
Natalie Rash, Gotham Gazette

Read more by this writer.



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