As if the wave of evictions coupled with a growing lack of defense attorneys as part of the city’s free program weren’t enough, tenants now face a new blow to their devastated economy as the Rent Guidelines Board recommended a drastic increase of rent in rent-regulated apartments.
It would be the highest increase allowed for more than a decade.
The agency, which sets the rates at which landlords can raise rents on the city’s nearly 1 million regulated units, recommended increases of between 2.7% and 4.5% for one-year leases and 4.3% to 9% for one-year leases. two years.
The percentages are well above the rates observed throughout the administration of former Mayor Bill de Blasio. The highest increase approved during his term was a 2.75% rent increase on two-year leases in 2014 and 1.5% increases on one-year leases in 2018 and 2019.
But the proposed rate increases aren’t final: The board is scheduled to hold a series of public meetings in the coming months to hear the perspective of both landlords and renters. It will also hold a final vote on rate increases in June.
However, the proposed rates appear to reflect homeowner optimism that the Eric Adams administration will usher in a new era of owner-friendly governance. Adams’s appointees to the board include Arpit Gupta, an economist at the conservative Manhattan Institute who previously expressed skepticism about rent regulation.
Owners say their costs have risen significantly in recent years, but they have been unable to raise rents to compensate.
Groups representing landlords said last Thursday that the cost of labor, fuel, utilities, maintenance, administration, and insurance have skyrocketed this year, and while taxes are down, they still can’t. pay for the increases.
The three areas that increased the most were fuel, insurance and maintenance costs, with increases of 19.6%, 10.9% and 9.2%, respectively. Property taxes, meanwhile, fell 3.7%
“You can’t underestimate that overall costs have gone up,” said Christina Smyth, a homeowners representative on the Adams-appointed board. “We’re just trying to maintain balance here on the board, we’re not trying to hit home runs for either side, we’re just trying to break even and stay level.”
But advocates responded with dismay to the board’s recommendations.
City Comptroller Brad Lander echoed the caucus’ concerns, saying the board should go through a “fair public process” before the final vote.
“With more than 200,000 evictions pending and wages not keeping pace with rising inflation, it is clear that New York City renters cannot afford the outrageous rent increases proposed by the Rent Guidelines Board,” Lander said. . “The Rent Guidelines Board must hold a fair public process this spring.”
“With rents already skyrocketing, working-class families will have to find thousands of extra dollars just to stay in their homes,” the City Council’s Progressive Caucus said in a statement.
“We need solutions that protect renters and address the affordability crisis in our city. People are still recovering from the impacts of COVID-19 and this recommendation ignores the economic reality for too many New Yorkers. People can’t afford rent increases, they need economic relief.”
The board will hold a series of meetings and hearings over the next several weeks. A final vote will be held in June.
“In New York City, we cannot afford to put our affordable housing at risk,” Adams said in a statement.
“My administration is focused on using data to inform decisions, and I trust that all of my appointees will faithfully evaluate the data presented to them and make an informed decision on how best to protect the City’s affordable housing,” he added.
Mayor Adams appointed Legal Aid Society attorney Adán Soltren as the tenants’ representative to the board. Soltren is a staff attorney in the Housing Justice Unit of the organization Group Advocacy Project.
INCREASES IN RENT AT MARKET PRICE
But rent-stabilized tenants aren’t the only ones facing rent increases. In recent decades, wages have not kept up with inflation and the cost of living, especially when it comes to housing. New York City residents are also rent-burdened, meaning they spend a high percentage of their income on housing: 42% of New Yorkers spent more than 30% of their income on rent in 2017, and 23% spent more than 50%, according to city data.
Rents in Manhattan are once again hitting new all-time highs, after rates plummeted during the pandemic.
The median monthly rent for an apartment in Manhattan was a record $3,700 in February. That was 24% more than a year ago and an unusually large increase of 4.2% since January, according to a report by brokerage Douglas Elliman and appraisal firm Miller Samuel.
The demand for rental apartments continues to rise, meaning that the “pandemic price” deals offered just a year or two ago have now been replaced by bidding wars.
Median effective net rent, or the amount renters pay after taking into account landlord incentives, rose a record 28% from last year to $3,630 per month when these incentives ran out. New leases with concessions, such as one or two months’ rent discounted from a one-year lease, fell from 41% a year ago to just 20% in February.
The last time effective net rent was this high was in April 2020, at $3,540 a month, after the start of the pandemic but before the rental market completely crashed. But the amount renters paid in February was 7.1% higher than the pre-pandemic rent in February 2020.
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