Rent Guidelines Board Freezes One-Year Leases for 2nd-Year in a Row

Board votes for rent freeze despite strong push for a rent rollback by City Council coalition. On June 27, 2016, the New York City Rent Guidelines Board held a final vote to set guidelines for 2016-2017. This vote took place one year after the Rent Guidelines Board made a historic decision to freeze one-year leases instead of raising them.

The Board adopted renewal lease guidelines for rent stabilized apartments, lofts and hotels which will go into effect on October 1, 2016.  For both apartments and lofts the Board once again decided to freeze one-year leases and place a 2% increase cap on two-year leases. The vote was 7-0 with 2 abstentions.

CM Kalllos

Council Member Ben Kallos

Prior to the final vote, the Rent Guidelines Board held five public hearings, in four boroughs. One June 20, 2016, a hearing was held at Cooper Union where several Council Members encouraged the Board to go one step further this year and rollback rents. Council Members Ben Kallos and Helen Rosenthal both testified and co-authored a letter signed by twenty-one Council Members supporting a rent rollback. The letter suggested that in the past, the Board “gave far more attention to landlords’ costs than to tenants’ ability to pay…and voted for rent increases that far outstripped the growth of the local economy.” The letter suggested that striking “a fair balance to tenants and landlords means voting for a rent rollback.”

Council Member Kallos testified, “this is the year for a rent rollback, because landlord costs have gone down, even by the price index of operating cost slanted measurement, which came out at negative 1.2%, while net operating incomes rose by 4.9%, the 10th-straight annual increase. It is time to consider the needs of our tenants, and now is when landlords can afford to correct for years of high rent increases and subsequent burden on tenants. This is a city of renters, but we will only remain one if we vigorously protect the affordable housing we already have.”

Council Member Rosenthal testified that “rent that’s frozen at an unsustainably high rate is still too high! Rent-stabilized households pay an average of 36% of their income on rent. That means the average rent-stabilized tenant is rent-burdened by federal standards, despite living in “affordable” housing.”

Council Member Helen Rosenthal

Council Member Helen Rosenthal

The Council coalition believed the unfair history of rent increase has had a direct causation to the loss of 250,000 to 400,000 rent-stabilized units over the past 20 years. The Members believed a rollback was necessary to preserve the City’s rent stabilization program and to help the Mayor’s goal to preserve 120,000 units of affordable housing over the next decade. Manhattan Borough Present Gale Brewer also was in support of a rollback.

Following the final vote, Council Member Kallos released a statement saying, “This rent freeze will extend relief to tenants throughout the City who have struggled to keep up with rising rents for years,” said Council Member Ben Kallos. “The Rent Guidelines Board has shown that last year’s rent freeze was more than a symbolic gesture, and tenants have the power to be heard. We will continue to fight to make up for years of too-high rent increases. Thank you to the many tenants who came out to tell their stories and the Rent Justice Coalition for their advocacy.”

“I’m grateful the Rent Guidelines Board recognized the plight of rent stabilized tenants and granted a rent freeze for one-year leases for a second straight year. However, rent that’s frozen at an unsustainably high rate is still too high. We know the RGB issued rent increases that were far higher than landlords’ operating costs for years, and tenants are still paying the price. I hope the RGB considers a rent rollback seriously next year,” said Council Member Rosenthal.

Mayor Bill de Blasio released a statement saying, “This year, the facts demanded a rent freeze. More than a million people will now have more security and a better shot at making ends meet. And the financial health of our buildings will remain protected because declining fuel costs have offset other expenses. In short, tonight’s decision by the Rent Guidelines Board reflects what’s actually happening in our neighborhoods.”

The Rent Stabilization Association, who opposed the freeze and wanted an increase, announced that it will be commencing a lawsuit against the Rent Guidelines Board. “The RGB continues to implement Mayor Bill de Blasio’s political agenda, targeting apartment building owners. As a result, RSA is prepared to fight these unjust and unlawful rent guidelines in the courts.”

Rent Guidelines Board Apartment and Loft Order 48 & Hotel Order 46 (2016)

By: Brian Kaszuba (Brian is the CityLand Editor and New York Law School Graduate, Class of 2004).

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