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Rent Hikes Loom for Almost Half of NYC’s Tenants

Assemblymember Linda Rosenthal and housing activists outside City Hall (Credit: Niamh Rowe).

Tenant unions, housing activists and local politicians held banners in Chinese, English and Spanish as they rallied in front of City Hall on the morning of April 28 to protest proposed rent hikes affecting roughly half of New York’s renters. “When I say 9 percent, you say shame,” cried one organizer to the one hundred or so rally goers. 

The proposed increases, ranging from 2.7 percent to 4.5 percent for one-year leases and 4.3 percent to nine percent for two-year ones, would dictate rents for the one million or so rent stabilized units in the city.

If the finalized rent adjustments end up somewhere in the middle of those ranges, they would constitute the highest increases since 2013.

“More and more people are going to get evicted and displaced. More people are going to feel the constraints of being able to provide for their families,” said Assemblymember Yuh-Line Niou, who represents lower Manhattan’s neighborhoods, in an interview at the rally. “It’s sick.”

The Rent Guidelines Board (RGB) put forward its proposals earlier this month. The Board will decide on finalized rents in June. Those increases will take effect in October.

Rent stabilized units offer tenants many protections, the most important of which is that their rent is set by the RGB, rather than at a market rate chosen by their landlord.

“There are over 100,000 cases pending in the housing court for eviction. If the rent is to increase, it means that we are putting those people at more risk of homelessness,” said Genesis Aquino, Executive Director of Tenants and Neighbors, a grassroots tenants’ rights organization, speaking at the rally. Aquino herself is a stabilized renter and is unsure how she will afford the increase. “You don’t compensate for it. I mean, it’s very likely we’re going to be homeless.”

The Board’s new recommendations come after an early Covid-era freeze on rent hikes for stabilized units. For an 18 month stretch in between Fall 2020 and early 2022, RGB held increases to zero percent for one-year leases. 

“It really scares me. I might have to get a second job. I really don’t know what’s next,” said Kimberley Morales, a tenant organizer at the rally. After witnessing her mother lose her job during the pandemic and be priced out of the city, Morales fears she could be next. 

Assemblymember Yuh-Line Niou and housing activists outside City Hall (Credit: Niamh Rowe).

As the city recovers from the worst of the pandemic, rents for market-rate apartments have shot up dramatically. In March, median rents in Manhattan and Brooklyn were up by 29 and 24 percent respectively from the year before.

The freezes on increases in rent stabilized units, meanwhile, have landlords worried about whether they can bring in enough money to sustain the buildings, and their business. Groups representing owners of buildings with rent stabilized units have criticized the RGB’s proposed rates as too low, even as tenant advocates have done the opposite. 

Each year, the Board tries to placate both tenants and landlords, but most importantly, it seeks to keep building owners’ “net operating income” (NOI) constant. NOI denotes landlord’s income after expenses related to running and maintaining their buildings.

Meanwhile, the Furman Center, a housing research and policy body at New York University, has published an analysis arguing that the whole system by which the RGB crafts its proposed rent adjustments needs an overhaul.

In a new report, the Furman Center argues that the RGB should base its yearly recommendations on inflation, which–per a popular measure–registered at 6.1 percent in the New York area over the period between March 2022 and March 2021.

Mark Willis, a senior policy fellow at the Center and co-author of the report, said the Furman analysis found that landlord’s expenditures on keeping rent stabilized units in good shape went up at the same rate as inflation.

That connection, if confirmed by an internal analysis by city agencies, would present a simple way to keep landlords’ net operating income constant, Willis said: just base rent increases on inflation. 

“It’s not complicated,” Willis said.

That recent inflation figure of 6.1 percent is the highest in years and registers above even the higher bound of the increases the Rent Guidelines Board is contemplating for one year leases. In past years, inflation has been considerably lower.

But Willis said steady increases that protect NOI are vital to keeping rent-stabilized apartments in good shape.

“The impact takes time, but buildings that are not properly repaired, overtime, will deteriorate and provide less quality housing and in the extreme, those buildings could eventually become uninhabitable,” Willis said.

Maintenance is particularly important for rent stabilized units, since they tend to be in older buildings.

Stabilized units are widespread throughout each borough except Staten Island and are in roughly even proportion with market rate units, except in the Bronx, where rent stabilized apartments are a significant majority. 

Median incomes and median rents, unsurprisingly, are both lower for rent stabilized tenants than their neighbors in market rate units.

New Yorkers curious about the status of their own apartment can write to the state office of Homes and Community Renewal to see whether their residence is stabilized and whether it had been in the past.

In addition, the website whoownswhat allows visitors to check the number of rent stabilized units in their apartment building and see whether it has shifted.

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