Rents will rise at least 3.25% for 2 million New Yorkers

A New York City panel that regulates rents for about a million rent-stabilized apartments on Tuesday approved the highest increases in nearly a decade, after landlords said they were pinched by taxes and rising spending.

In a raucous meeting at Cooper Union in Manhattan, the Rent Guidelines Board voted 5-4 to raise rents for one-year leases by 3.25% in rent-stabilized homes and 5 % on two-year leases.

Many tenants argued for a rent freeze or reduction, while landlords demanded even higher increases, but the panel signaled its intention to back a middle-of-the-road approach at a meeting last month. The increases affect about two million New Yorkers.

New York City, already one of the most expensive places to live in the country, has seen the cost of living rise amid a rebound from the worst of the pandemic. Soaring inflation has hit tenants and landlords alike, and the effect on landlords’ ability to maintain buildings was one of the main factors considered by the council. But the vote also heightened concerns about the shortage of affordable housing and the sustainability of the city’s recovery.

On Tuesday, the auditorium was filled with dozens of people wearing brightly colored orange and yellow T-shirts declaring their membership in different tenant organizations. Their high-pitched whistles, banging on chairs, shouting and chanting “housing is a human right” reverberated throughout the hall, sometimes completely drowning out the voices of council members.

As council chairman David Reiss explained the reasons for the increases, dozens of people stood up, turned their backs on him and chanted, drowning him out.

The annual vote is always tense and draws intense protests and pressure from tenant and landlord advocates. But this year’s meeting came after tens of thousands of tenants lost their jobs and struggled to make payments during the pandemic.

It was also the first vote to take place under Mayor Eric Adams’ administration, and the council took a different approach than it had under his predecessor, Bill de Blasio. The committee is effectively controlled by the mayor, who appoints the nine members – five representing the public and two for tenants and landlords. Representatives for tenants and landlords both voted no on Tuesday night.

Although Mr Adams said he had lobbied the council to adopt lower increases, he also expressed sympathy for small landlords who need rental income to offset rising expenses.

“The decision taken by the Rent Guidelines Board today will unfortunately be a burden on tenants at this difficult time – and that is disappointing,” Mr Adams said in a statement after the vote.

“At the same time,” he added, “small landlords risk bankruptcy due to years of no increases at all, endangering building owners of modest means while threatening the quality of life of tenants who deserve to live in well-being”. maintained and modern buildings.

Mr de Blasio had focused more on tenant costs. During his tenure, the highest annual increases approved by the board were 1.5% for one-year leases and 2.75% for two-year leases. Inflation was also relatively low during his administration.

The last time there was a significant increase — 4% on one-year leases and 7.75% on two-year leases — was in 2013, when Michael R. Bloomberg was mayor.

The increases approved on Tuesday will apply to leases beginning on or after October 1.

New York City’s rent stabilization system, first introduced in the late 1960s, remains a crucial source of affordable housing.

The median income of people living in rent-stabilized housing is about $47,000, compared to $62,960 in unregulated housing, according to a recent city survey. The median monthly rent for rent-stabilized apartments is $1,400, according to the survey, compared to $1,845 for unregulated homes.

And the stabilized rents stand in stark contrast to the exorbitant prices seen in recent months in some parts of the city: the average rent for a newly rented apartment in Manhattan in May was $4,975 per month, a 22% increase from year earlier, according to a report by real estate firm Douglas Elliman.

Tuesday’s result was a blow to tenants, many of whom were struggling to pay their rent even before the pandemic hit. Housing advocates had lobbied aggressively in recent weeks for the council to back down and support a rent freeze or reduction.

Mei Xia Yu, who has lived in her rent-stabilized two-bedroom apartment in Chinatown for 15 years, said after the vote that her “heart is very disturbed”.

“It added way too much,” she said. “No one can afford it.”

Adán Soltren, who was appointed to the board this spring by Mr Adams and is one of two tenant representatives who voted against the increases, called the decision to support them “unfair”.

“Your decision will hurt millions of people while businesses and investors continue to profit,” he said.

At the panel’s public hearing last week in the Bronx, more than 60 of the roughly 70 speakers were tenants, tenant advocates and elected officials who advocated for a rent cut or freeze. Many speakers became emotional during their testimony, expressing their despair at any increases and their frustration at the poor conditions in their homes.

The increases approved on Tuesday also disappointed landlords, who said buildings would deteriorate without additional rental income to offset increased spending.

“We risk rent-stabilized housing going downhill,” said Christina Smyth, one of two members representing landlords who voted against the proposed increases, saying they were insufficient.

Landlords said they were pressured by tough new laws passed in 2019 that restricted their ability to raise rents when an apartment became vacant or upgraded.

Bryan Liff, a landlord who testified at the meeting last week, called for rent increases of at least 8% and said rental income was already too low to bring many units up to living standards. But he said he was “dispirited” by what appeared to be inevitability on behalf of tenants, and that “decisions seem to be based on who is shouting the loudest”.

Both Mr Adams and the landlords’ groups have highlighted the difficulties faced by ‘mom and pop’ landlords when advocating for rent increases.

But because existing laws make it difficult to determine who actually owns a given building, it’s unclear how many rent-stabilized home owners are actually small landlords versus landlords with much larger and more diversified.

A rough analysis carried out by council staff in June 2020 suggested that more than 61% of rent-stabilized housing was owned by landlords who owned 10 or fewer units.

But a separate analysis of real estate records released last week by Group, a tech company that tracks real estate ownership, suggested just the opposite: that more than 60% of rent-stabilized homes are owned by landlords with of more than 1,000 units overall. On the other hand, about 1% of rent-stabilized housing belongs to owners who own less than 10 housing units in total.

“The data unequivocally shows that large landlords own the vast majority of rent-stabilized housing in New York City,” the group said last week.

Thea Kvetenadze contributed report.

Previous An unbreakable bond of brotherhood
Next Need for competent debt restructuring negotiation