It’s a decades-old tradition: The Rent Guidelines Board meets annually and packs auditoriums with raucous crowds of landlords and tenants. Each group, in hearings across New York City, makes their case for and against rent adjustments to the city’s roughly one million rent-stabilized apartments.
Then the board, grounding their decision in economic data, takes a final vote.
But the novel coronavirus has disrupted that process, and despite calls to suspend it from both sides of the aisle, the city and state have pushed forward with remote meetings. Now, ahead of the board’s preliminary vote on Thursday, landlord groups are urging the board to hike rents upwards of 2 percent—as Mayor Bill de Blasio and tenants push for a rent freeze.
The Rent Stabilization Association (RSA) is calling for increases between 2.5 and 4.5 percent on one-year leases and between 3.5 and 5.5 percent on two-year leases. Meanwhile, the Real Estate Board of New York (REBNY) is recommending a minimum 2.4 percent increase on one-year leases. Both groups, which represent landlords, point to last year’s passage of the Housing Stability and Tenant Protection Act, which has restricted how landlords increase rents on regulated apartments, along with mounting operational costs and other expenses.
“We are not by any means minimizing the fact that some tenants are in dire need of temporary relief,” said Vito Signorile, director of communications at RSA, at the board’s virtual Tuesday meeting. “However, a one-size fits all approach by enacting another politically-motivated rent freeze does not provide the immediate assistance that some tenants are in need of right now.”
If the nine-member body were to move forward with a rent freeze it should only do so temporarily between October 1 and December 31, said Signorile.
The board, in one of its own reports, estimates that rent increases for rent-stabilized apartments should fall between 2.5 percent and 3.5 percent for one-year leases and 3.3 percent to 6.75 percent for two-year lease to maintain net operating income for landlords who own rent-stabilized buildings. That operating income, according to the board’s data, has declined by 0.6 percent from 2017 to 2018 to $535 monthly per apartment—the first drop since 2003.
But landlord and tenant groups alike, although to different ends, note that the board’s reports rely on old data that misses the impact of the state’s tenant-friendly rent laws passed last year and, more urgently, the COVID-19 pandemic.
“We can’t afford to get this wrong,” said Paimaan Lodhi, senior vice president of policy and planning at REBNY. “Smart decision making starts with good data. We all can see the challenges our city is facing so we are relying on sound government strategies that will solve—not create more—problems.”
Tenant advocates, pointing to the economic fallout of the pandemic, argue that the board should reduce rents. The Rent Justice Coalition, made up of rent-stabilized tenants from across the city, maintains that the board should hold off on the process until the city’s public health crisis subsides, noting that the virtual meetings creates a technological barrier for several of the group’s members.
But if a vote is to occur, the coalition is calling for a rent roll back (something the board has never done). Kim Statuto, the leader of the tenant association at her Highbridge apartment building stressed the financial crunch many renters are feeling due to the pandemic.
“I didn’t have money for April and I don’t have money for May, what’s going to happen after June 20 when the eviction moratorium is lifted? I’m going to be in court,” said Kim Statuto, the leader of the tenant association at her Highbridge apartment building. “And then you want to consider a rent increase? I don’t think so.”
At the very least, the board should freeze rents to aid tenants who are already struggling to make rent amid the pandemic, said Oksana Mironova, a housing policy analyst with the Community Service Society.
“Rent freezes have eased housing hardships for rent regulated tenants in the past and can do so again during what will be an extremely trying and long pandemic recovery period,” said Mironova. “[This will] provide some sense of longterm stability during an incredibility turbulent and uncertain time.”