NYC board to vote on rent increase for 1 million rent-stabilized units

It’s an annual — and stressful — summer rite of passage, up there with lugging your box AC out of storage and scraping off the pigeon poop, or watching the Mets rack up losses on their way to another disappointing season.

On Wednesday evening, the Rent Guidelines Board will decide on how much rents will increase for tenants in roughly 1 million rent-stabilized apartments next year.

The nine-member panel's vote on the rent increase will take place at Hunter College, and follows months of financial analysis and impassioned testimony at public hearings from tenants and landlords.

The Rent Guidelines Board decided last month on the likely contours of the increase when they voted to consider a rent hike between 2% and 5% on new one-year leases or 4% to 7% increases on two-year leases. If history is any indication, the final vote will likely fall within those ranges.

The board once again faces pressure from tenants to limit the increase, or freeze rents altogether amid high inflation and an unstable economic recovery following the COVID-19 pandemic.

“I see the price going to the grocery,” said East Flatbush resident Laura Tross, who has a fixed income and lives in a rent-stabilized apartment with her granddaughter. “I don't know if I could afford the prices of food plus the percentage of rent that they want.”

Tross was one of hundreds of Brooklyn tenants who showed up to demand a rent freeze at the board’s final public hearing last week.

Landlords, on the other hand, are pushing for a significant increase to keep up with their own rising costs, including the price of property insurance, fuel and materials for repairs.

“This is simple economics. If you continue to defund these buildings they will deteriorate,” said Jay Martin, executive director of the rent-stabilized landlord group Community Housing Improvement Program. “That is not good for renters, their housing providers or New York City.”

But Tim Collins, a housing attorney who served as the Rent Guidelines Board's executive director in the 1980s and 1990s, said the panel must also weigh long-term financial trends.

“There is often this sort of template,” Collins said. “The Rent Guidelines Board splits the baby, everyone goes home unhappy and the show’s over.”

He pointed to decadeslong data showing landlords earning steady profits, even if those revenues have dipped in recent years. “The critical information is that over the long run, owners have done very well,” he said.

Rents continue to exceed record highs in unregulated units after a brief dip at the height of the pandemic. And Rent Guidelines Board data shows owners of rent-stabilized apartments are making nearly 50% more than they did in 1990 based on their “net operating income” — a metric that weighs landlord expenses and revenue before factoring in mortgage costs.

What does the board’s decision mean to me?

A lot, if you live in one of the over 1 million New York City apartments that are subject to rent regulations.

The board is basically telling you the ceiling on how much your landlord can raise your rent on the next lease you sign after Oct. 1.

Not sure if those rules apply to you? Here’s how you can find out.

In general, most rent-stabilized apartments are located in buildings with six or more units built before 1974. Tens of thousands more were constructed more recently in buildings that received certain property tax breaks.

But not every unit that fits that criteria is rent-stabilized. Before 2019, landlords had the legal authority to deregulate apartments after they hit a certain monthly rent.

You can search for buildings with at least one rent-stabilized apartment in a database maintained by the state’s Division of Homes and Community Renewal — the housing agency that administers the rent laws. But the only way to find out if your apartment is rent-stabilized is to contact HCR and make a specific request. You can also ask for your rent history to see if you are being charged the correct amount based on past increases.

Even if you don’t live in a rent-stabilized apartment, the increases can serve as a comparison for other owners in the area. And landlords say they tend to raise rents on so-called “market-rate apartments” — where landlords can charge whatever tenants are willing to pay — in the same building as rent-stabilized units to make up for the capped prices.

What is the Rent Guidelines Board, anyway?

The board is made up of nine members appointed by the mayor, with a full staff working behind the scenes to crunch financial data and inform the panel’s decisions.

There are five theoretically nonpartisan “public members” — a mix of economists, attorneys and housing experts — to go along with two tenant members, working in the interest of renters, and two landlord members who represent property owners.

Mayor Eric Adams appointed the board's chair, Fordham University law professor Nestor Davidson, earlier this year.

Does the board always increase rents?

Not always, though it’s pretty likely they will this year.

The board’s members are appointed by the mayor and traditionally follow his lead. Under Mayor Bill de Blasio, who publicly called for a rent freeze, the board voted three times to keep prices flat, including in 2020, when the city was besieged by the pandemic.

Last year, the first under Adams, the board voted for a 3.25% increase on one-year leases, the highest spike since the Bloomberg administration nine years earlier.

After the board voted on its proposed ranges last month, Adams called for an increase below the top level. He said a 7% hike on two-year leases “is clearly beyond what renters can afford and what I feel is appropriate this year.”

Annual rent increases have dropped significantly since the 1970s and 1980s, but compound each year, meaning this year’s number will affect future costs.

But Adams isn’t the only local leader with a dog in the fight.

Plenty of other elected officials are weighing in — with five progressive and socialist city councilmembers even rushing the stage to demonstrate for a rent rollback during a board hearing last month.

The meetings are pretty much always raucous affairs, but that was a bridge too far for the board, which urged tenant groups to relax their demonstrating at a private meeting. Landlord groups recommended their members avoid the meetings and reserve their testimony for a virtual hearing earlier this month.

The board also decided to move the venue for the final vote from Cooper Union to Hunter College and prohibited “items that are reasonably likely to disrupt the proceedings, such as noisemakers and drums.”

I thought I heard something about 16% rent hikes?

A few months ago, the Rent Guidelines Board considered a report on costs to landlords who own buildings where 100% of apartments are rent-stabilized — a relatively small universe, because most buildings with rent-stabilized units also contain market-rate apartments.

The board determined that those owners would need an increase up to 15.75% to maintain their current profits and revenue, but made clear in a note included in its report that it did “not constitute ... recommendations for guideline adjustments.”

Still, that shocking number stood out to many tenants, landlords and members of the media, leading to several accounts of a massive rent hike on the horizon.

But it’s only one data point among several examined by the board — and one devoid of considerations like the financial situation of low- and middle-income New Yorkers, according to the Community Service Society of New York.

“The board’s job is to consider both tenants’ and landlords’ economic realities when making their annual rent adjustment decision, not to ensure that landlords immense profits remain stable from year to year,” the group said in a statement in April.

Another annual analysis by the board’s staff found that more than half of households in rent-stabilized apartments are paying more than 30% of their income on rent — an arrangement that makes them “rent-burdened” under federal housing guidelines.

Is there any more context to this year’s vote?

Yep.

The regulations underpinning New York’s rent stabilization system are at risk, at least if landlord groups get their way.

The Community Housing Improvement Program and Rent Stabilization Association, another trade group for property owners, sued the state to overturn rent protection laws enacted in 2019. Those laws prevent rent-stabilized property owners from raising rents on empty apartments or after major renovations. The trade groups say those tighter caps are unconstitutional.

Federal judges in New York shot down their claims at every step of the appeals process, but the landlord groups really want the U.S. Supreme Court and its conservative majority to take up the case.

It’s a bit of a longshot, and the outcome is uncertain if the justices do agree to hear the case. But the prospect of a court driven more by ideology than precedent has tenant advocates fearing the worst.

“Rent stabilization is the biggest source of affordable housing for low- and moderate-income tenants,” Legal Aid Society housing attorney Ellen Davidson told Gothamist earlier this year. “It has allowed them to raise families and thrive in this city, and if rent regulation went away they would not be able to live in this city.”