Rent Guidelines Board recommends increases between 2.5% and 3.5% for rent-stabilized units
Photo by Goh Rhy Yan on Unsplash
A report released on Thursday by the Rent Guidelines Board recommends a rent increase on rent-stabilized apartments to mitigate a surge in operating costs for owners. During the board’s first virtual meeting, members reviewed the report, which says rent increases should be between 2.5 and 3.5 percent for one-year leases and 3.3 and 6.75 percent for two-year leases. The recommendation comes as officials and tenant advocacy groups have called for a rent freeze during the coronavirus pandemic, which has put thousands of New Yorkers out of work.
The “2020 Price Index of Operating Costs” report focuses on data between April 2019 and March 2020 but does not reflect the impact of COVID-19 on costs for building owners. According to the report, the price index of operating costs (PIOC) for buildings with rent-stabilized units increased by 3.7 percent. From this month until March 2021, the projected change in costs is 2.4 percent, the report found.
In addition to the increase in operating costs, the board reported a decline in net operating income (NOI) among rent-stabilized apartments. Owner income dropped by 0.6 percent from 2017 to 2018, the first time NOI has declined since 2002-2003.
The nine-member entity will debate the rent increases during virtual meetings on April 30, May 5, and May 7, with details on additional meetings to come. Typically, four public hearings are held followed by a final vote on the matter sometime in June. Last summer, the board voted to approve a 1.5 percent increase on one-year leases and a 2.5 percent increase on two-year leases. The board last issued a rent freeze on one-year leases in 2015 and 2016.
Mayor Bill de Blasio originally called for the Rent Guidelines Board to suspend any proceedings, but the state questioned the legality of the suspension. The mayor now is asking the board to issue a rent freeze for the city’s nearly one million rent-stabilized apartments during the current health crisis.
“The Rent Guidelines Board just issued a report on the challenges landlords face during this crisis. But that pales in comparison to what tenants are facing,” de Blasio tweeted on Thursday. “If ever there was a time for a rent freeze, it’s NOW. And that’s what I’m calling on the RGB to do.”
Currently, the only temporary protection for tenants is a 90-day moratorium on evictions, issued by Gov. Andrew Cuomo in March. The mayor wants the state to extend the moratorium for two months after New York’s state of emergency ends, to avoid a wave of evictions after the crisis ends. This falls short of similar legislation proposed last week by state lawmakers that would prevent landlords from evicting tenants for unpaid rent accrued during the state of emergency and for six months afterward.
To pressure Cuomo to cancel rent for the duration of the pandemic, a coalition of housing and tenant groups are planning a statewide rent strike on May 1. The coordinated protest led by the Upstate Downstate Housing Alliance is seeking cancellation of rents for at least four months, a freeze on rent for every tenant, and a plan to house homeless New Yorkers.
“The COVID-19 crisis is making clear what many tenants have known for a long time: we are all just one life event – the loss of a job, a medical emergency – away from losing our homes,” the “May Day” petition reads. “Today, millions of New Yorkers are out of work. That means millions of us will be unable to pay the rent on May 1st. So if we can’t pay, let’s not pay, together!”
De Blasio has said he doesn’t “agree with a rent strike.” During an interview last week with WNYC, the mayor said there has to be a balance struck between tenants and owners. “There are a lot of smaller landlords in particular who if they don’t have any income coming in, they’re not going to be able to keep their buildings going. And then you have a very bad situation for everyone,” the mayor said.
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