Annual Battle Over Raising Rents in New York Begins

Thursday, March 8, 2018
Luis Ferre-Sadurni
New York Times

The average rent for tenants living in rent-stabilized buildings in New York City grew by 3.1 percent in 2016, the lowest increase in six years, according to a new study released by the board that regulates rents in the city.

The smaller uptick suggests that the historic freezes imposed on some rents in 2015 and 2016 had a noticeable impact on tenants living in rent-stabilized apartments — though there were still modest increases for some apartments.

With the new data in hand, members of the Rent Guidelines Board convened Thursday at the Municipal Building at 1 Centre Street. Over the next few months, board members will use the findings to set the allowable rent increases for the city’s roughly one million rent-stabilized apartments for the coming year. A final vote is scheduled for the end of June.

Last year, after having frozen rents on one-year leases for two years in a row, the board voted to allow modest rent increases — up to 1.25 percent for one-year leases, and 2 percent for two-year leases.

The public meeting marked the beginning of the annual jockeying between tenant and landlord groups. Before the meeting began, about a dozen tenant activists rallied outside the Municipal Building.

“We’re calling on a rent freeze so we’re able to live more comfortably,” said Lucy Arroyo of the Bronx.

Ms. Arroyo, 64, said that since her landlord raised her rent by $300 last month, she has been fearing eviction from the one-bedroom apartment where she has lived for more than 30 years. With the increase, her rent is now $800; her primary income is $834 a month from her disability insurance.

“I’m fighting for this,” said Ms. Arroyo, adding that she has begun researching government programs that might help cover her rent.

Even when a freeze is in place, landlords have various mechanisms to raise rents beyond the board’s guidelines.

Building owners can, for example, raise rents by charging tenants for buildingwide improvements. Or, if improvements to an individual apartment increase the rent beyond a legal threshold — currently $2,733.75 — the apartment can be deregulated. Landlords can also raise so-called preferential rents, a rent below the legal maximum allowed under rent stabilization. Increases in preferential rents don’t fall under city-set limits.

“Preferential rents are very helpful for tenants, but owners have the right to raise those rents,” said Vito Signorile, a spokesman for the Rent Stabilization Association, the biggest landlord lobbyist group in the city.

“For smaller buildings, it’s very possible that, because of the rent freeze, they couldn’t pay their operating costs, and so they found another way to raise the rents on tenants,” Mr. Signorile said. He said that the 3.1 percent rent growth in 2016 was most likely the result of rent increases on two-year leases, which were not affected by the freeze.

Mr. Signorile said that the association would push for an “adequate” rent increase this year that “makes up for the minor increases and lack thereof” during the administration of Mayor Bill de Blasio.

The board is composed of nine members appointed by the mayor. There are currently three vacant seats, which the mayor aims to fill by the next board meeting on April 5, city officials said.

Mayor de Blasio did not publicly back a rent freeze last year, but he advocated freezes in previous years. On Thursday, a spokeswoman for the mayor did not offer any indication of where the mayor stands on a freeze for the coming year.

“It’s a data-driven process that is just starting,” Melissa Grace, the spokeswoman, said.

The median rent for a rent-stabilized apartment in 2016 was $1,182, and the median cost for the landlord to operate the unit was $847, according to the study.

The study also found that landlords’ operating incomes after expenses had grown for the 12th consecutive year, most recently by 4.4 percent, down from 10.8 percent the year before. Landlords’ operating costs also increased by 2.4 percent.

The biggest rise in rents, at 9.1 percent, was found in the Canarsie and Flatlands neighborhoods in Brooklyn. In Manhattan, the neighborhoods that saw the biggest increase in rents, at 4.1 percent, were Morningside Heights and Hamilton Heights in Harlem. Two neighborhoods in the Bronx and one in Brooklyn experienced rent declines, according to the study.

The study is one of several reports the board is required to consider over the coming months as members debate rent adjustments for stabilized apartments. Rent-stabilized apartments are typically in buildings that were built before 1974 with six or more units, and also constructed or renovated since then with special tax benefits.

There were 966,000 rent-stabilized apartment units in 2017, comprising 44 percent of the rental stock in the city, according to the latest city survey released in February.

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