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Rent-stabilized landlords see operating costs increase, again

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A yearly report presented by the Rent Guidelines Board shows that landlords’ costs increased 5.5 percent, while mortgage service fees are at an all-time low

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Operating costs for rent stabilized apartment buildings increased 5.5 percent from March 2018 to March 2019, according to a newly released Rent Guidelines Board report. Meanwhile, another RGB report on mortgages found that 885 buildings (12 percent more than last year) with rent-stabilized units were sold citywide in 2018.

In a public meeting on Thursday, the Rent Guidelines Board reviewed and discussed the reports, which will inform their decision regarding rent freezes or increases. Last year, costs went up by 4.5 percent, and the Board voted to allow rent increases of 1.5 percent on one-year leases and 2.5 percent on two-year leases.

This year’s Price Index of Operating Costs (PIOC) report found that costs for landlords have increased in terms of fuel (13.8 percent), taxes (7.1 percent), labor (6 percent), insurance (6 percent), maintenance (3.8 percent), and administration (3.5 percent).

In terms of new family mortgages, the Mortgage Survey Report found that average interest rates decreased to 4.65 percent, and that the average service fees for new loans declined from 0.44 last year to 0.38 points this year—making it the lowest level ever recorded by the survey.

“I think that if you look at the affordability study that we had presented to us last week, it actually says the exact same thing for tenants, so for me that just means that we are in a neutral space,” Sheila Garcia, an RGB board member representing tenants, told Curbed. “I think it’s a good year for tenants, landlords are doing just fine—the housing crisis is still going on and we should be doing something to make sure that we continue to have a leveled playing field.”

During the meeting, New York State Homes and Community Renewal (HCR) staffers provided testimony and answered questions from the RGB. Some of the questions answered in a document provided included that in 2018 there were 885,205 units registered as rent stabilized; and that tenant-initiated complaints mounted to 3,820 for individual apartments—1,727 of which were granted and 1,736 of which are still pending.