Another rent commission vote, another disappointment for tenants and landlords.
Much to the chagrin of both parties, the Rent Guidelines Board voted 5-4 on Tuesday night to increase stabilized rents by 3.25% on one-year leases and 5% on two-year leases.
Separately, the board voted 7 to 2 to freeze stabilized hotel rents. Both adjustments come into effect on October 1, 2022.
The full-year hike for rent-stabilized flats was the first since Covid hit and marked the end of the de facto protection the council had given tenants during a year-and-a-half freeze.
For the owners, this was not enough.
Just as tenant advocates argued that many tenants would be unable to afford additional expenses, landlords were adamant that the moderate increase would not offset their rising costs.
Rarely, the parties have agreed on one point: the system for determining rent increases needs to be reformed. But no such effort is on the cards, and the two sides are unlikely to agree on one anyway.
Ahead of Tuesday night’s hearing, tenants and tenant advocacy groups, including the Rent Justice Coalition and the Met Council on Housing, rallied outside the site of the final vote in NoHo to demand lower rents.
But Julius Bennet, a member of the Rent Justice Coalition, was the first to admit that a reduction was a near impossibility. Last month, the board pre-approved a 2-4% increase; final decisions are always within approved ranges.
Rather, the groups’ real aim was to criticize a reconstituted rent commission which they say prioritized landlord profits over tenants’ financial security amid soaring inflation and a recession. looms.
“I don’t feel like we got along very well,” Bennett said, referring to the four public hearings held this spring that gave New Yorkers a platform to talk about rent adjustments.
The tenant activist said the forums were more like “an exercise” than a way to influence board members.
Speaking to the cheers of protesters, a newly appointed tenant representative on the board, Adán Soltren, said he felt the panel’s neutrality had been compromised.
Supported by fellow tenant Sheila Garcia, Soltren called the board members, who are appointed by the mayor, tools the city uses to ensure that the real estate industry, a major donor to Mayor Eric Adams and from previous administrations, is getting enough money.
“Shame on this administration and any administration that puts in place members on this board who clearly believe that investments deserve more respect than people,” Soltren said.
“This process has been performative at best and for the tenants of the city, I’m so sorry,” he added.
Mayor Eric Adams, in a statement after the vote, acknowledged the increase would be difficult for some tenants, but small landlords risk bankruptcy after years of freezes. He blamed “this system”.
“We can’t pit landlords against tenants as winners and losers every year,” the mayor said.
Landlord groups argued that council had done landlords a disservice by approving a rent increase that was less than their increase in spending.
“The data is clear. Today’s RGB-approved adjustment won’t put a penny of profit in the pockets of small homeowners,” said Jay Martin, executive director of the Community Housing Improvement Program. “The RGB has simply taken steps to limit its losses for next year.”
In the months leading up to the vote, dispatches from the rent commission reported an increase that would take into account rising landlord spending. A March report found homeowners’ profits in the first year of Covid fell 8%, excluding some major expenses; the following month, board staff recommended an increase of 2.7 to 4.5%.
And before the final vote, all but two of the proposals before board members included an increase in one-year leases.
But homeowners who called for a hike of up to 9% to offset rising costs, including property taxes, water and energy rates, saw the 3.25% hike as a sum. paltry and evidence that the city’s method of determining rent adjustments needed to be revised.
“The RGB vote proves this is a flawed system,” said Joseph Strasburg, president of the owners group, the Rent Stabilization Association. “It fails landlords and tenants.”
His implication was that rent increases too small to keep buildings well-maintained will leave more than 2 million tenants in increasingly substandard housing.
Landlords argue that the rent board adjustments are based on data that does not provide a complete or up-to-date picture of landlord spending.
“It’s time to take a different approach,” Strasburg said. The group’s chairman did not elaborate on the changes to the rent board itself. Instead, Strasbourg suggested that state lawmakers reform property taxes, tackle rising insurance rates and expand the housing voucher system to funnel more money to renters and therefore landlords. .
CHIP proposed introducing compensation for stabilized landlords or a different system to implement rent hikes last week.
Public member Christian Gonzalez-Rivera, who joined the two tenant members in voting for a rent freeze, echoed the call for a change in policy. He proposed lower property taxes and a more generous tax abatement to help homeowners pay for repairs.
Most of those changes would depend on the state legislature, which is in recess until January.
City Comptroller Brad Lander convened a group of lawmakers and housing advocates last week to call for property tax reform when the 421a tax break expires. And the city and state have both taken recent action on housing vouchers, pushing the FHEPS caps at both levels of government to Section 8 rates this year.
Still, the sentiment on both sides is clear: something has to give.
“If our elected officials really care about affordable, well-maintained housing as a human right, they will use their powers to make sure landlords have the money they need to make repairs,” said Gonzalez River.