Rent Guidelines Board Recommends New Hikes

Last night, the Rent Guidelines Board voted 5-4 to propose rent hikes for rent-stabilized apartments on the order of 2-4.5% for one-year leases and 4-7.5% for two-years leases. Loft rent increases would be 2-4% for one-year leases, 4-7% for two-year leases.

The NY Times says these proposed increases "could mean smaller increases than last year’s," and the Post says the increases could fall in the "middle range" of about 3.25% and 5.75%. Last year, the increases were 4.25% for one-year leases and 7.25% for two-year leases and they were the biggest increases since 2003. From the Post:

While three new members were appointed to the board this year, the script was as predictable as ever.

The two landlord representatives suggested increases of 5.5 and 9.5 percent and were promptly voted down 7-2. The landlord representatives called for a rent freeze and were shot down by the same 7-2 margin.

Public member Jonathan Kimmel then recommended the range that was adopted in a quick 5-4 vote.

The arguments put forward by both sides were also familiar.

Landlords warned that owners on the margins would get out of the business or go under.

Tenants decried the continuing loss of apartments the middle class could afford.

Last night's meeting at Cooper Union's Great Hall had extra security, but only 60 attendees. One told WNBC that the process was terrible and implied the RGB made it so to bore people into not wanting to participate. Interestingly, both tenants and landlords think the selection of ranges is bad and would prefer specific numbers. There are about 1 million rent-stabilized apartments in the city. A retired schoolteacher who lives in Stuyvesant Town told the Times, "It all just keeps adding up. They are not going to have any teachers or police officers left in the city. On retired income, there is no affordable housing left in the city.”

The RGB will hold three meetings for public comment. For some reason, the RGB website is down (it's been down for a while - a nefarious plan to keep people away from meetings?), but we've put the meeting times and locations after the jump. The final vote will be on June 26, at Cooper Union's Great Hall, 5:30PM-9:30PM.

Public meetings:
Tuesday, June 5, 2007
Department of City Planning
Spector Hall
22 Reade Street
New York, NY 10007
9:30 A.M. – 12:00 P.M.

Tuesday, June 12, 2007
The Great Hall
at Cooper Union
7 East 7th Street
at corner of 3rd Ave. (Basement)
New York, NY 10003
10:00 A.M. – 6:00 P.M.

Tuesday,June 19, 2007
LaGuardia Performing Arts Center
31-10 Thomson Avenue
(Use entrance on Van Dam St., just north of 47 Ave.)
Long Island City, NY 11101
4:00 P.M. – 10:00 P.M.

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on May 8, 2007 8:18 AM

Comments [rss]

Johnie

I am going to agree with the first comment.

1 million rent controlled apartment makes the rest of the market more expensive.

It's basic supply and demand.

#2 -- Landlords aren't running a charity. The great thing about a capitalist society is that you can charge whatever the market will be willing to pay. The market is willing to pay far more for something smaller than they could get living in the suburbs.

And you're right. If you don't like the price, there are plenty of housing at affordable price elsewhere. There is no reason why you should have to live here.

It's basic supply and demand.

JohnS

The guy who moved here 4 months ago from Boston feels qualified to comment on something as complicated as NYC's housing crisis/rent regulation. You may be from Boston toddE, but the rest of your rant makes you sound like your neck is red.

Are you in the real estate business, or just an idiot?

todd E

JohnS, you're full of sh$#. I just moved here from Boston less than 4 months ago, it went up nowhere near the extent it did here... market rate to market rate - maybe your friend had a mansion they were paying 90 bucks a month for prior to deregulation. The time has come to get rid of this outdated policy.

and ps... to your other post, we are no longer living in post ww2 USA, there are plenty of places you can move to if you cannot afford NY. there are affordable places allover the country. we do not need to support you simply because you feel you have some right and are too lazy to earn a wage that can pay then rent.

Still Not Amused

I have a little secret to share with you all . If you don't want to pay rent anymore then buy a boathouse . It's expensive but after you buy the damn thing all you have to pay is Gas, Food, and a mariners license . That simple folks, I did and I haven't paid rent in ooh six years now !

JohnS

market rents went up in Boston as they have everywhere in the country due to inflation that the fed created by running the presses, but if you want to taking your selection as an argument, the rents in Boston went up far less than they have in NYC which has regulations, so your statement does not make any sense.

Baloney. My cousin lives in Boston and moved out of her downtown apartment after deregulation and bought a house in Charlestown. She says the rental situation there is VERY ugly now, and that her old apartment now rents for triple what she couldn't afford back then (She's a VP for a publishing firm). Tripled Boston rents in less than 10 years has as little to do with inflation as 30% yearly rent increases for market raters in Stuy Town.

timbnyc

yeah, and zoning is an unfair restriction on an owner's use of land, too. Why shouldn't someone be allowed to tear down their apartment building and put up a gas station, say, or a lead smelter or a pig farm.

JohnS

Zeng,

What facts are troubling you?

NY has had rent regulation in various forms, since the 1920s. At the beginning of the 20th century, rising rents and evictions led to rent strikes and mass protests so NYC first established rent controls in 1920. Our current system, born in 1974 is directly descended from the broad rent and price controls that were put in place at the end of World War II because of a severe housing shortage.

(Note: Regulations were suspended by Nelson Rockefeller and a GOP dominated legislature from 1971-1974. Evictions and harassment became so widespread that the GOP themselves passed the 1974 Emergency Tenant Protection Act.)

Increased rents may be a boon to landlords and to NYC property tax collectors. But every extra buck that goes to a landlord is a buck that a renter won't spend in the local economy or put in a savings account. How many new businesses stay outta NYC because our high rents mean paying higher wages?

NYC apartments are largely owned by big real estate, (not mom and pop landlords like the RSA would like us to believe) according to study submitted by the NY State Tenant and Neighborhood Coalition to the RGB in 1987, "The small 12

percent of landlords who own 71 percent of the stabilized

apartments own on the average 238 apartments each."

JoeBoy

[5] zoom:

You are vastly oversimplifying things, and comparing apples to oranges, for the purpose of supporting your dubious claims. To believe your argument, one would have to assume that the single most important factor in determining a housing market is regulation; in otherwords: you would have to be a dolt. Usually, housing regulations are the consequence of other driving factors in the housing market ... such as say ... population density:

New york population density: 26,720/sq mi

Chicago population density: 12,604/sq mi

Chicago does not even have HALF the population density of NYC, of course the housing market there is completely different. While regulation certainly has an effect on the market, it is not by a long shot the only significant force at work in NYC's housing market.

todd E

21, market rents went up in Boston as they have everywhere in the country due to inflation that the fed created by running the presses, but if you want to taking your selection as an argument, the rents in Boston went up far less than they have in NYC which has regulations, so your statement does not make any sense.

zeng

JohnS, where exactly did you get these facts from? Clearly not from reality.

JohnS

Market rate renters in NYC have entered a very strange new world. Our city has had some form of rent regulation since the 1920s, and in the 1940s, our city government and business leaders realized that some form of public/private partnership was necessary to keep our city's housing stock affordable, and to keep this city running. That partnership has only very recrently broken down.

A some point, CEOs will realize that while they may be able to afford to rent an apartment in NYC, that may not be the case for the people who work for them. A some point, small businesses will realize that for every 1% rise in rents across this city, about a $billion flows out of the local economy. Which is, I guess ok if we want to cede the entire city to Wall streeters and the real estate industry, but that may perhaps not be in the best long term interests of NYC.

A note on supply/demand: it does not really apply in a city like ours, where so few corporate interests own so much of the housing stock. And for those who think that should NY rent regulations end tomorrow, the result would be city rental costs levelling out: just take a look at what has happen to Boston post-deregulation. Prices didn't level out, they have skyrocketed.

.

I'm a great tenant, and have a great landlord, so no issues here. I do happen to be stab, but my rent ($1200) isn't ridiculously below market for this area.

I'd be curious as to what would happen if stabilization/control were removed, but do I want to be the guinea pig in the event my rent went up $300 immediately? Hell no.

Good landlords are by no means "greedy," since it's just a business. That said, landlords who buy buildings with existing controlled/stab units should know what they're getting into, and not have the audacity to bitch about the tenants who were there before they took control (especially the handicapped and elderly).

Hugo Chavez

you've chosen to be in a business that's a basic human necessity – namely, shelter

So landlords should be martyrs for social justice? I guess this is going to be true of medicine eventually. No more huge salaries for doctors. Nationalize the insurance companies. Cap drug prices (and watch all research go to India and China).

glorious

said it before and i'll say it again:

If you can't afford the rent, MOVE!

econ 101

Rent stabilization prevents gouging. "just move" is not reasonable. I don't know about you, but I don't relish the thought of packing and moving all I posses on a yearly basis; landlords know this and use this as leverage.

If everyone is subject to the same market forces it is pretty hard to "gouge". Gouging is charging far more than the market price because you have a captive market, like raising gasoline or food prices after a hurricane. You could argue that if you are already in the apartment it is gouging if the landlord thinks you will pay anything to keep from moving. But you have options. One is to move, the other is to make a counter offer.

Have any of you ever tried negotiating with a landlord? It's not that hard. Most landlords will take a good tenant over a few extra bucks and a lousy tenant and/or the hassle of finding a new tenant. Advertising, credit checks, etc. cost the landlord money even if it is a tax deductible cost. And no landlord wants a lunatic that might stop paying altogether. Eviction is a nightmare process. So if a landlord tries to raise your rent 6% and you come back with a 3% or 4% offer s/he will probably take it. Look at other apartments in your neighborhood for an idea of what the market rate is. I did this twice with my last landlord and he caved each time.

Anyway, a 6% increase on an apartment that is stabilized and far below market is hardly gouging.

zeng

ace, that should not be anyone else's problem but your own. In every other place in the country, if you cant afford to live somewhere, you move... period. you have no right to live on someone else's dime. all rent stabilization does is gouge the market rate tenants in your building, because the owner still wants to make something on his building which is why he invested in it in the first place. i'm quite certain they all have better ways to spend their money than on you.

reana

LOL, don't forget unionized building staff, which when I get the statement for my building is the majority of the maintanence cost.

LOL

Reality Czech, Chavez has a nice spot waiting for you in Venezuela, LOL... time to move. If you dont like the specter of rent increases, I suggest you save your money and move somewhere where you can afford to buy. It will be really educational for you... you may understand things like increases in fuel costs, real estate taxes, maintenance, water bills, legal fees, mortgages, insurance, etc.

Ace

Rent stabilization prevents gouging. "just move" is not reasonable. I don't know about you, but I don't relish the thought of packing and moving all I posses on a yearly basis; landlords know this and use this as leverage.