The second of five Rent Guidelines Board meetings took place at Cooper Union last night. We walked over to check out the action. The RGB sets the allowable rent increases for the city's one million plus rent-stabilized apartments (that's about half of the rentable apartment inventory in NYC, according to the 2005 Housing and Vacancy Survey.) The increases each year are supposed to be based on the supply of available apartments, the cost of building ownership, and cost of living throughout the city. In reality, the percentage increase each year depends on a fierce political battle between landlord and tenant advocates, who are each represented by members on the board.
If you've never been to an RGB meeting, it's a unique political spectacle. The board members take turns reading speeches-- when we arrived, one of the tenants' advocates was making an impassioned plea to freeze the rent increases. She was interrupted several times with shouts of support from the audience. After she finished, one of the landlords' advocates began to read his statement. He was drowned out every couple of minutes by shouts and organized chanting from the audience. Many members of the audience brought their own banners and signs, and waved them gleefully for the media assembled around the edges of the room. Most of the reporters had that glazed look they tend to get when there isn't much happening and they are watching something they've seen a thousand times before.
If you're interested in the economics of housing, the discussion was interesting. The tenant advocates repeatedly claimed the landlords were extracting an unfair profit and not putting in necessary repairs on the apartments. The landlord advocates claimed that their costs were skyrocketing (particularly the amount they pay for fuel), and that without a large increase, they'd be forced to sell their buildings to speculators who were even less likely to take care of them. While the RGB is nominally responsible for gathering the research data that both sides can agree on, during the hour of speeches that we sat through, the landlords and tenants seemed to be operating from entirely different sets of facts.
After a few hours of back and forth, the board took a preliminary vote and agreed on 3 to 6.5 percent increases for 1-year renewals; and 5 to 8.5% increases for 2-year leases. If the board settles on the middle of the ranges (4.75/6.75%), that would be a lot higher than last year's 2.75 and 5.5% increases. The next meeting is on June 1st, with a final vote on June 27th.
Disclosure: my dad, Steve Dobkin, was one of the Tenants' advocates on the RGB during the Koch administration. He quit in disgust in 1989 when the board passed a particularly large increase.