Rents will rise by at least 3.25 percent for 2 million New Yorkers

A New York City body that regulates rents for about a million rent-stabilized apartments on Tuesday approved the biggest increases in nearly a decade after property owners said they were being squeezed by taxes and rising spending.

At a noisy meeting at Cooper Union in Manhattan, the Rent Guidelines Board voted 5-4 to increase rents by 3.25 percent on one-year leases in rent-stabilized homes and 5 percent on two-year leases.

Many tenants were arguing for a rent freeze or payback, while landlords were seeking even higher increases, but the panel had signaled its intention to support a middle ground at a meeting last month. The increases will affect around two million New Yorkers.

New York City, already one of the most expensive places to live in the country, has seen the cost of living soar amid a recovery from the worst of the pandemic. Rising inflation has hit tenants and property owners, and the impact on landlords’ ability to maintain buildings was one of the key factors the board considered. But the vote also increased concerns about the lack of affordable housing and the sustainability of the city’s recovery.

The auditorium was filled Tuesday with dozens of people wearing bright orange and yellow T-shirts declaring their membership in various tenant organizations. Their piercing whistles, banging on chairs, screams and chants of “housing is a human right” echoed throughout the room, sometimes completely drowning out the voices of the board members.

As CEO David Reiss explained the reasons for the increases, dozens of people stood up, turned their backs on him, and chanted and drowned him out.

The annual vote is always fraught with tension, drawing fierce protests and lobbying from advocates from both tenants and landlords. But this year’s gathering came after tens of thousands of renters lost their jobs and struggled to make payments during the pandemic.

It was also the first vote held during Mayor Eric Adams’ tenure, and the board took a different approach than under his predecessor, Bill de Blasio. The body is effectively controlled by the mayor, who appoints all nine members – five representatives from the public and two each for tenants and landlords. Tenant and landlord representatives both voted no Tuesday night.

While Mr Adams said he pushed the board to pass lower increases, he has also expressed sympathy for small property owners who need rental income to offset rising expenses.

“Unfortunately, the decision taken today by the Tenancy Policy Council will weigh heavily on renters at this difficult time – and that is disappointing,” Mr Adams said in a statement after the vote.

“At the same time,” he added, “small landlords are at risk of bankruptcy because years have not been raised, jeopardizing builders of modest means while threatening the quality of life of tenants who deserve to live in good housing.” neat, modern buildings.”

Mr. de Blasio had focused more on tenant costs. During his tenure, the highest annual increases approved by the board were 1.5 percent on one-year leases and 2.75 percent on two-year leases. Inflation was also relatively low during his tenure.

Most recently, there was a significant increase in 2013, when Michael R. Bloomberg was mayor — 4 percent for one-year leases and 7.75 percent for two-year leases.

The increases approved Tuesday apply to leases beginning on or after October 1.

New York City’s rent stabilization system, first introduced in the late 1960s, remains a crucial source of affordable housing.

The median income for people living in rent-regulated homes is about $47,000, compared to $62,960 in unregulated homes, according to a recent city survey. The median monthly rent for rent-regulated housing is $1,400, compared to $1,845 for unregulated housing, according to the survey.

And stabilizing rents stand in stark contrast to skyrocketing prices in some neighborhoods in recent months: The average rent for a newly rented apartment in Manhattan was $4,975 a month in May, up 22 percent from a year earlier Report of the real estate company Douglas Elliman.

Tuesday’s result was a blow to renters, many of whom were struggling to pay their rent even before the pandemic. Housing advocates had campaigned aggressively in recent weeks for the board to reverse course and back a rent freeze or rent rollback.

Mei Xia Yu, who has lived in her two-bedroom rent-stabilized apartment in Chinatown for 15 years, said after the vote that her “heart is very restless.”

“It added way too much,” she said. “No one can afford it.”

Adán Soltren, who was appointed to the board by Mr Adams this spring and is one of two tenant representatives who voted against the increases, called the decision to support them “unfair”.

“Your decision will cause millions of people to suffer while businesses and investors continue to benefit,” he said.

At the panel’s public hearing in the Bronx last week, more than 60 of the roughly 70 speakers were tenants, tenant representatives and elected officials who advocated rent cuts or rent freezes. Many of the speakers became emotional during their testimony, expressing hopelessness in the face of any increases and frustration at the poor conditions in their homes.

The increases approved on Tuesday also disappointed landlords, who said the buildings would decay without additional rental income to offset increased spending.

“We risk the forfeiture of rent-stabilized housing,” said Christina Smyth, one of two members representing landlords who voted against the proposed increases, saying they were insufficient.

Landlords have said they are under pressure from tough new laws passed in 2019 that limit their ability to raise rents when an apartment becomes vacant or undergoes modernization.

Bryan Liff, a landlord who testified at the meeting last week, pushed for rent increases of at least 8 percent and said rental income is already too low to bring many units up to livable standards. But he said he was “demoralized” by what appeared to be a foregone conclusion on behalf of tenants and that “decisions appear to be based on who shouts the loudest”.

Both Mr. Adams and landlord groups have pointed out the difficulties faced by “granny and pop” landlords when arguing for rent increases.

However, because existing laws make it difficult to determine who actually owns a particular building, it’s not clear how many of the rent-stabilized home owners are actually smaller property owners compared to landlords with much larger and more diversified portfolios.

A crude analysis conducted by board staff in June 2020 found that more than 61 percent of rent-stabilized units were owned by landlords who owned 10 units or fewer.

But a separate analysis of real estate records released last week by group, a tech company that tracks real estate ownership, found exactly the opposite: that more than 60 percent of rent-stabilized homes are owned by landlords with portfolios of more than 1,000 are total units. In contrast, about 1 percent of rent-stabilized units are owned by landlords who own fewer than 10 total units.

“The data clearly shows that large landlords own the vast majority of rent-stabilized housing in New York City,” the group said last week.

Tea Kvetenadze contributed reporting.

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