The staff at the city’s Rent Guidelines Board have recommended a range of hikes, all at higher levels than New York’s rent-regulated tenants have seen in nearly a decade.
The board’s four-person staff led to a recommendation of suggested rent increases between 2.7% and 4.5% for one-year leases and 4.3% to 9% for two-year leases.
Their proposals, outlined in a presentation to the nine-member board Thursday morning, is the first in a series of steps toward the board’s final determination of rent made in early summer. The board must vote on how to set rent by July 1.
“Each of these formulas may be best thought of as a starting point for deliberation,” Andrew McLaughlin, executive director at the RGB, told the board on Thursday.
The board, all mayoral appointees, will make their decision amid a heated battle between landlords and tenants as New York struggles to recover from the COVID pandemic.
Property owners are feeling optimistic about their chances for a rent hike in the era of Mayor Eric Adams, THE CITY previously reported. But on Thursday, representatives of landlords insisted the board’s recommendation wasn’t enough.
“These numbers are inadequate and have to be much higher than this for building owners to recoup from the financial losses they have suffered from the 2019 rent law, the low rent increases of recent years and lost revenue from the pandemic,” said Vito Signorile, vice-president of the Rent Stabilization Association.
The staff’s suggested increase is designed to change rents enough to keep the landlords’ net operating income, or NOI, “constant,” McLoughlin said. NOI measures earnings left over after operating and maintenance bills are paid, but does not include taxes and mortgage payments.
The board previously reported that NOI for landlords of rent-regulated apartments dropped 7.8 percent between 2019 and 2020, the latest data available.
Adams Making His Mark on Board
In a break from his predecessor Bill de Blasio, Mayor Eric Adams has moved away from public support of tenants and rent freezes. “My administration is committed to making decisions based on data,” he said in a statement as he appointed two members to the rent board in late March.
On Thursday, Adams nominated a third member to the board, attorney Adán Soltren of the Legal Aid Society, who will serve as a tenant representative.
The board is a separate entity from City Hall, but “the mayor’s administration has a huge influence on what the vote will be,” said Leah Goodridge, a former member of the RGB and the managing attorney for housing at Mobilization for Justice.
“The chair, who is appointed at the pleasure of the mayor, wants to make a decision that’s way out of step with the mayor, there’s a good chance that they may lose their position,” she said. “There’s a lot of incentive for the chair to be on the same page as the administration.”
An Inflation Problem
Thursday’s proposal combines three formulas for possible rent increases, one of which takes into consideration the Consumer Price Index — one way to measure inflation — as a benchmark for determining rate increases.
The NYU Furman Center, a housing research organization, underscored the need for that measure this week, arguing that without increases based on inflation, landlords would no longer be able to maintain rent regulated apartments, leading to a loss of a crucial component of the city’s housing stock.
“Our research suggests that the Consumer Price Index is the right commensurate now that, post the 2019 rent reform, a significant portion of the rent-stabilized stock relies entirely on RGB increases to maintain sufficient revenue,” said Mark Willis, a senior fellow at Furman.
New York area inflation for the year ending in March surged by 6%, according to the Bureau of Labor Statistics.
At the same time, financial pressure on tenants is immense. At least $1.6 billion in rent is owed in the five boroughs, according to the National Equity Atlas. Eviction cases have overwhelmed the city’s court systems since the moratorium ended in January. Unemployment, particularly among Black New Yorkers, remains much higher than the national average.
Council Speaker Adrienne Adams (D-Queens) and the council’s Housing Committee chair Pierina Sánchez (D-Morris Heights) came out Thursday firmly on the side of tenants. In a joint statement, they said “it is unconscionable” to propose up to a 9% rent increase.
“While many costs have increased for New Yorkers, it is unfair and unreasonable to pass the burden to the tenants of rent-stabilized tenants, who are still struggling to recover,” they said.
The board staff’s recommendation “will have influence,” said Goodridge, because the board executive director “works hand in hand with the chair.”
But their rent hike figures won’t necessarily match the body’s final vote. What matters much more, Goodridge said, is the board’s preliminary vote on rent levels, which usually takes place in May.
“That’s the big one,” she said. Typically, the final vote in June matches or increases the rent level voted on in May. For example, if the preliminary vote mandates a 3% increase for one-year leases, “almost always, it’ll be 3% or higher” in the end, she said.
When they make their decision, their guidelines will apply to leases signed between October 1, 2022 and September 30, 2023.
Goodridge, an advocate for tenants, encouraged New Yorkers to testify at public hearings that will take place between the preliminary vote in May and the final vote in June.
Interested in testifying to the Rent Guidelines Board? Here’s how:
- Check the RGB page here to find out when meetings and hearings are taking place. As of mid-April, hearing and votes have not yet been scheduled past the end of the month.
- Submit written testimony by mail or through this online form.
- Show up to say your piece directly to the board, which you have a legal right to do. In the past, the board has typically given two minutes to each speaker, “alternating between owner and tenant representatives,” they say on their website.
- Pre-registering to speak will move you toward the front of the line of speakers, the RGB says. How can you pre-register? Those details will be listed in the “Public Notice” for a hearing, published in the weeks before it happens. Keep on the lookout for that on the board’s website.