The Rent Guidelines Board voted 5-4 on Tuesday night to consider a 0-2% rent increase on one year leases for NYC's one million rent stabilized tenants, increasing the likelihood of a second consecutive rent freeze. Made up of tenant and landlord interests, the Board votes on allowable rent increases based on factors like landlord income and operating costs, and tenant eviction rates. Last year's rent freeze was the City's first since rent stabilization went into effect in 1969.
The RGB will also consider 0.5-3.5% increases on two-year leases, as they did last year. There will be a series of public hearings before the final vote on June 27th.
In addition to tightly regulated rent increases, stabilized tenants in New York City have a legal right to renew their leases—hypothetically a boon in gentrifying neighborhoods where landlords are motivated to displace low-income tenants and jack up rents. But while tenants were pleased with last year's freeze, the news came less than a week after Governor Cuomo refused to repeal vacancy decontrol—a section of the rent laws that allows landlords to deregulate apartments once the rent reaches a certain threshold.
Cea Weaver, an organizer with the tenant advocacy nonprofit Urban Homesteading Assistance Board (UHAB), said on Wednesday that while the possibility of a rent freeze is encouraging, stabilized tenants, under threat of landlord harassment and eviction, deserve a rent rollback. "Landlord costs went down this year and their incomes have gone up for 10 straight years in a row," she said. "We're seeing gentrification and displacement only accelerate all over the City."
Let the games begin! Tenants rallying at Preliminary Vote, calling for a rent rollback after a rent freeze last year pic.twitter.com/owdgOaADzR
— RSA (@TheRSAnyc) May 3, 2016
A 2016 RGB report [PDF] shows that the price index of operating costs for rent-stabilized buildings decreased 1.2% last year. According to the NY Times, landlords' net operating income increased 3.5% in 2014 (the most current data available). For ten years running, landlord income has exceeded expenses. At the same time, most rent stabilized tenants pay more than a third of their annual income on rent—the City's benchmark for affordability.
Tenants and their advocates homed in on these facts when they demanded a rollback in 2015. "The landlords have gotten more increases than their costs have justified," Alan Podhaizer, 69, of Coney Island, told us before last year's vote.
But landlord interests have countered that rollbacks can be detrimental to small-time building owners without many properties. Jack Freund of the Rent Stabilization Association, a landlord group, told the NY Times this week that last year's freeze had hurt its members. "It's time for a reasonable rent increase," he said.
The RSA is calling for a 4% increase on one-year leases, and a 7% increase on two-year leases.
Explaining the historic decision to freeze rents last year, RGB chair Rachel L. Godsil said that fuel costs had dipped a significant 21% over the past year. This year, that dip is even more significant—a full 45.5%.
"This is the beginning of a process and we trust that any eventual rent adjustments will be fair, data-driven and reflective of the real-life conditions in our neighborhoods," said Mayoral spokesman Austin Finan in a statement. "We look forward to the public's input in the weeks ahead."
The new guidelines will impact lease renewals between October 1, 2016 and September 30, 2017.