Rent Guidelines Board backs rent hikes on NYC’s stabilized apartments for third year in a row

In a preliminary vote on Tuesday, the Rent Guidelines Board (RGB) backed rent hikes for New York City’s roughly one million rent-stabilized apartments for the third year in a row. The nine-member board, appointed by the mayor, approved with a vote of 5-2 a motion to increase rents between 2 percent and 4.5 percent on one-year leases and between 4 percent and 6.5 percent on two-year leases. The two members of the board representing tenants abstained from voting and walked out of the meeting in protest. A final vote on the rent adjustment takes place in June.

Last year, the RGB voted to raise rents on one-year leases by 3 percent. Two-year leases went up by 2.75 percent for the first year and 3.2 percent for the second year. In 2022, the board approved adjustments of 3.25 percent on one-year leases and 5 percent on two-year leases, the most significant increases on stabilized apartments since 2013.

The yearly increases are a departure from the board under former Mayor Bill de Blasio, which voted to freeze rent in 2015, 2016, and partially in 2020 and 2021.

The changes affect the leases of about two million New Yorkers. The new rent adjustment will take effect for leases commencing on or after October 1, 2024.

As 6sqft reported, the proposed rent increases are based on several metrics that take into account the economic conditions for both landlords and tenants. According to the board, the price index of operating costs (PIOC), which measures taxes, labor costs, fuel, utilities, maintenance, administrative costs, and insurance costs in rent-stabilized properties, has risen by 3.9 percent since last year.

The board uses the PIOC in three separate formulas to calculate possible increases for renters every year. The Net Revenue approach, which considers the change in PIOC and rent revenue based on an estimate of signed leases. The CPI-Adjusted NOI, which looks at the PIOC, the mix of lease terms, and the impact of inflation on net operating income. And the traditional formula, which takes into account both the current change in PIOC with projected change for the following year.

Landlords argue the proposed increases are not enough since rent-stabilized buildings typically have higher maintenance costs due to age. Tenant advocates say the rent increase will further burdern low-income New Yorkers.

In a statement following the preliminary vote on Tuesday, Mayor Eric Adams said the 6.5 percent increase “goes far beyond what is reasonable.”

“Tenants are feeling the squeeze of a decades-long affordability crisis, which has been accelerated by restrictive zoning laws and inadequate tools that have made it harder and harder to build housing,” Adams said. “Our team is taking a close look at the preliminary ranges voted on by the Rent Guidelines Board this evening and while the Board has the challenging task of striking a balance between protecting tenants from infeasible rent increases and ensuring property owners can maintain their buildings as costs continue to rise, I must be clear that a 6.5 percent increase goes far beyond what is reasonable to ask tenants to take on at this time.”

“I know well that small property owners also face growing challenges, and I encourage them to work with the city to utilize our many preservation tools so that, together, we can work to stabilize buildings and neighborhoods, all while keeping tenants in their homes.”

A public meeting will be held on May 23 at 9 a.m. at the Landmarks Preservation Commission room at 1 Centre Street. A final vote to decide the rent increases is scheduled for June 17.

RELATED:

• Rent hikes between 2.5% and 7% recommended for NYC’s stabilized apartments
• NYC’s stabilized apartments to see rent hike for second year in a row
• All Rent Guidelines Board coverage