Rent Stabilization To See Higher Increase This Year

As New Yorkers weather rising costs of living that are affecting all Americans, residents of rent stabilized homes now face a new hurdle, as higher-than-usual rent hikes loom on the horizon for almost one million homes across New York City.

Rent stabilized buildings mostly include buildings of six or more units built prior to 1973. Under law, landlords are prohibited from raising rent in such homes above a fixed percentage determined annually by the NYC Rent Guidelines Board.

According to a report released by Mayor-appointed officials on the board, the group is looking to permit a city-wide raise of anywhere between just under 3 percent, up to 4.5 percent for one-year leases, while two-year contracts can increase by as much as twice that figure, in what would be the largest increase since 2013. Most years, rent in these apartments is only permitted to be raised within 0.5 percent to 2 percent, according to the NYC.gov website.

But according to the Rent Stabilization Association, a group representing building owners and agents, that isn’t sufficient to cover rising building costs and compensate for long periods of time during the pandemic in which many tenants didn’t pay rent. They aim to raise rents between from 4.5 percent to 6.5 percent for one year leases, and up to 9 percent for two-year contracts, according to the group’s Vice President of Communication, Vito Signorile. “They’re still dealing with the fact that rents weren’t paid during the pandemic and all their operating expenses went up. There was no moratorium on property taxes, water bills, heating bills,” Signorile told NBC News. “Over an eight year period, the average one-year guideline was less than one percent, and that’s just insufficient to maintain the buildings.”

They also wish to recoup loses that they claim were sustained before and during the pandemic.

“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,” Signorile told The City news.

The 2022 Rent Guidelines Board PIOC (Price Index of Operating Costs) reports that the cost of operating rent controlled housing increased by 4.2 percent, compared with 3 percent in 2021, and 3.7% in 2020.

Many believe that the proposed changes can lead to evictions of people who are already struggling.

“They haven’t reached a decision yet, but the numbers seem a lot higher than they have been in previous years,” Larry Jason, Executive Director of Housing and Family Services of Greater New York told Hamodia.  “They are of concern for any tenant that has issues pertaining to Covid and its aftermath. I think it may lead to additional evictions for tenants who can’t afford to pay the increases. There are still a lot of people out of work.”

Some believe that money earned from the rent hike will not be used to cover operational costs.

“Landlords are distorting data on property management costs to justify rent increases,” Abby Ng, Policy and Communications Coordinator for NYC-based tenant advocacy group Tenants and Neighbors told Hamodia.

“On the ground, tenants are still dealing with lots of repair issues, and they’re living in sometimes dangerous living conditions, with mold, heat, security issues. They’ve been requesting repairs and landlords remain neglectful and unresponsive”, she said.

When asked about the claim that landlord’ associations make that they are trying to recoup lost income during the pandemic, Ng said.

“I have two responses for that. Firstly, were still in a pandemic, we’re all losing in one way or another, everyone’s suffering. Additionally, the landlords chose to be property owners; when you buy property, it’s an investment, and you’re taking a certain amount of risk. Tenants shouldn’t have to take on the same amount of risk, because for landlords it’s a profit margin, and for tenants, it’s their homes that are at risk.”

Some tenants feel increases should be subject to individual circumstances.

“I think approval of any increase should be based on the particular building,” said Dovid Glembocki, who lives in a rent-stabilized apartment building in Midwood. “If the building has been neglected with many violations, the landlord should not be entitled to raise the rent at all. If he has kept up the property, then yes, he could get an increase, but maybe not as high as 6 percent.”

The Rent Guidelines Board will take a preliminary vote on May 5th. Public hearings will follow, and a final vote is expected at the end of June.

The Rent Stabilization Association has not immediately responded to Hamodia’s request for comment.

Stay on top of the latest news by signing up for Hamodia WhatsApp status by clicking here