In New York, Panel Backs Rent Increases for More Than 2 Million

The New York body tasked with regulating rents in nearly a million rent-stabilized apartments voted Thursday to support the biggest increases in nearly a decade.

The move, which requires official approval next month, would increase rents by 2 to 4 percent on one-year leases and 4 to 6 percent on two-year leases. The increases are another reminder of the affordability crisis the city is facing in the wake of the pandemic.

The body, known as the Rent Guidelines Board, kept increases low during the tenure of previous Mayor Bill de Blasio, a progressive who delivered on promises to reduce inequality. In four of the last eight years, the board, which is effectively controlled by the mayor, has voted to freeze rents.

But even during his campaign, Mayor Eric Adams, who is more moderate in many of his positions, had expressed skepticism about rent freezes and sympathy for mom-and-pop landlords. Members of the real estate industry are among the mayor’s biggest donors, and Thursday’s vote reflected his friendlier attitude toward the city’s business leaders and smaller property owners.

Mr Adams said some of the increases originally announced – up to 4.5 per cent for one-year leases and up to 9 per cent for two-year leases – were too steep, and he called for a “better balance”.

“It’s good that the board has gone down,” he said in a statement after the vote. “But if rents and other living expenses are rising with inflation and other economic woes, then so must government support, which is why I’ve fought for a more generous housing credit program, more robust income tax credit, and significant investment in childcare.”

For at least the last 20 years, the outcome of the pre-vote matched closely with the final figures, which often followed inflationary patterns. Inflation was mostly lower during Mr de Blasio’s tenure compared to today. Most recently, there was a significant increase in 2013 – 4 percent for one-year leases and 7.75 percent for two-year leases.

Passing by a five-to-four vote in Thursday’s virtual meeting, the current proposals represented a middle ground: less than the increases landlord representatives on the board proposed at the meeting and more than those endorsed by tenant representatives.

But the proposed numbers are likely to spark protests and fuel lobbying from landlord groups pushing for higher rent increases and rent advocates who feared any increase could hurt the ability of low-income New Yorkers to regain their economic footing from the pandemic.

Most of the more than two million New Yorkers who live in rent-stabilized homes, more than the population of Dallas or Philadelphia, earn much less than the city’s median household income of about $67,000. Tens of thousands of New Yorkers have fallen behind on rent during the pandemic, and many still owe thousands of dollars.

Meanwhile, evictions have increased in recent weeks, although they remain well below pre-pandemic levels. After a pandemic slump, rent levels in apartments not regulated by the city have risen sharply.

But landlords and their advocates say they need increases to cope with rising inflation and rising spending on fuel, labor and building maintenance. Landlords said New York’s tenant protection laws passed in 2019, which restricted their ability to raise rents when an apartment became vacant or was being upgraded, have also made it difficult to cover their costs.

Joseph Strasburg, president of the Rent Stabilization Association, an industry group, said the ranges proposed by the board would not offset an increase in spending.

He said the board “must now consider the high end of the preliminary ranges to allow owners to cover general increases in inflation, property taxes, water bills, and heating oil and other utility costs.”

Robert Ehrlich, landlord representative on the board, voted against the proposal accepted by the board.

“Housing has a cost,” he said at the gathering. “We need to make sure the buildings have the money to cover those costs. If we don’t get this right, a large number could be left to decay.”

But tenant representatives were outraged. Sheila Garcia, a tenant representative on the board, attended from the Bronx with a group of tenants holding signs demanding rent refunds. She said many of the tenants with her had “suggested that if they’re evicted, maybe they can live with some of the board members who support these increases.”

“The 2 percent minimum would be devastating for the people in this room,” she said.

Denisa Rodrigo, who lives in a rent-stabilized studio apartment in Sunnyside, Queens, said any increase was “unsustainable”. Ms Rodrigo, 56, lost her job as a doctor’s assistant when the private doctor she worked for closed his practice in 2020 during the worst of the pandemic. She said she is still looking for a new job.

Ms. Rodrigo’s monthly rent is $1,050, most of which she has been unable to pay since April 2020. A pandemic rent relief program covered about $9,000 she owed, but she still has about $10,000 to pay back, she said, and any incremental increase allowed by the board could put her in further debt.

“I’ve paid off what I could from my savings and used up almost everything I have,” she said.

The Rent Stabilization Scheme, introduced in 1969, has grown into a huge and important source of affordable housing in one of the country’s most expensive places to live. The average monthly rent is about $1,269 compared to $1,700 in unregulated homes.

The more than one million rent-stabilized apartments make up around half of the city’s rental housing stock.

The city estimates that just over 40 percent of these renters are Hispanic or Latino and more than 20 percent are black, while the median household income of stabilized-rent renters is about $44,000, more than 33 percent less than in unregulated housing.

The nine members of the board, all appointed by the mayor, include five representatives from the public and two representatives each from owners and tenants. The annual board votes represent one of the few ways the mayor can directly address the city’s housing costs, and Mr. Adams has made three appointments since taking office. The other members were appointed by Mr. de Blasio.

The annual polls, usually held during noisy meetings, have long sparked heated debates between landlords seeking bigger rent increases and tenants wanting to lower their monthly bills.

The group of tenants around Ms. Garcia occasionally chanted: “We are already burdened with rent” and cheered proposals for rent reductions. But because it was held virtually, the hour-long meeting was relatively muted.

Matt Murphy, the executive director of New York University’s Furman Center for Real Estate and Urban Policy, said the board must balance affordability concerns with the need to keep real estate from decay.

“That’s a lot of pressure on them to find the right number in a way that probably hasn’t been there in the last 10 years,” he said.

Property owners were hoping for a new approach from the board.

Landlords “really suffered” during the rental freeze period, said Christopher Athineos, who owns seven buildings with a total of 125 apartments with his family. About half of the apartments, located primarily in Brooklyn’s Bay Ridge and Park Slope, are rent stabilized.

Mr Athineos, who has been attending these board meetings for decades, said some of its buildings are almost 100 years old and in need of constant maintenance.

A Bay Ridge building requires routine facade repairs, he said, with a recent repair costing about $19,000 — up from $15,000 four years ago when labor and materials were cheaper.

In another building nearby, Mr Athineos said his annual fuel costs have increased from about $26,000 in 2020 to almost $40,000 in 2021. He said without an increase in the rent he’s allowed to collect, he’ll likely continue making patchwork repairs like caulking a roof rather than replacing it.

“Ultimately, if they want to be more mindful of tenant affordability, the government should step in and reimburse us for our costs,” he said.

Emma Fitzsimmons contributed reporting.

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