New York City’s rent stabilized tenants could face rent hikes of up to 4% for one-year leases and 6%for two-year leases, according to a preliminary vote by the Rent Guidelines Board on Thursday night. The board, which regulates the roughly one million rent stabilized units in the city, will hold a final vote next month.
If the board sticks to these adjustments in its final vote next month, it would mark the largest approved increases for renters since the COVID-19 pandemic began, and for the past eight years.
The battle between rent stabilized tenants and landlords reaches a boiling point this year, and with the board’s upcoming final vote. Tenants of rent-regulated apartments – who are more likely to be low-income than tenants of non-regulated units, and the majority of whom are Hispanic and Black – are no longer protected by federal and state eviction moratoriums. And in New York City, a rise in evictions has led to a shortage of lawyers to represent tenants in court. Landlords, meanwhile, argue that their own operating costs are going up and need to see rent increases at the higher end of the spectrum to cope.
Mayor Eric Adams, despite possessing the power to appoint the members of the Rent Guidelines Board, has stayed comfortably – if frustratingly – in the middle of this debate in his public comments. “We must be fair here – allow tenants to be able to stay in their living arrangements, but we need to look after those small mom-and-pop owners,” Adams said at a press conference last month. Tenant advocacy groups, however, point to research showing that about half of rent-regulated buildings are owned by large landlords with at least 21 buildings. Rent stabilized apartments are also in buildings with at least six units – another fact tenant advocates point to when fighting the “mom-and-pop landlord” narrative.
But landlords weren’t thrilled about the increases suggested in Thursday’s preliminary vote either. “For the past eight years, the average annual rent increase has been less than 1% a year, while operating costs during the same period have increased nearly fivefold,” Joseph Strasburg, president of the Rent Stabilization Association – a group of owners and managers of rent stabilized units – said in a prepared statement. “These preliminary ranges will not make up for this disparity, which is even wider when factoring in millions of dollars in unpaid rent during the pandemic.”
City Council Member Pierina Ana Sanchez, who chairs the council’s housing committee, denounced the preliminary vote as being too burdensome for renters. “As @NYCCouncil rep in the epicenter of the post-COVID eviction crisis, I condemn the unconscionable rent hikes proposed by the Rent Guidelines Board,” Sanchez tweeted on Thursday. “We should stabilize renters – the fabric and lifeblood of our City – not further destabilize by raising already unaffordable rents.”
Here’s what you need to know about the rent hikes approved in a preliminary vote on Thursday night.
What kinds of rent hikes are tenants facing?
The Rent Guidelines Board heard three different proposals for adjustments of rents on one- and two-year leases on Thursday night. The first, presented by members of the board who represent tenants, would have allowed adjustments of -1% to 1% on one-year leases and 0% to 1.5% on two-year leases. That proposal failed to pass. The second, presented by members of the board who represent owners, would have allowed adjustments of 4.5% to 6.5% on one-year leases and 6.5% to 8.5% on two-year leases. That proposal also failed to pass.
The proposal presented by board Chair David Reiss that ultimately won the slight majority in a 5-4 vote would allow rent increases of 2% to 4% on one-year leases and 4% to 6% on two-year leases. For a tenant paying $2000 in rent per month, a 4% allowed increase could bump their rent up to $2080. A 6% allowed increase would bump that rent up to $2120.
Tenant advocates on the board voted against this range, saying it was too high, while owner advocates voted against it saying it was too low. The increases, which have to be approved in a final vote before July 1, will apply to leases signed between October 1, 2022 and September 30, 2023.
The ranges that passed on Thursday are lower than one set of adjustments that was floated a few weeks ago. In mid-April, staff of the Rent Guidelines Board released one headline-grabbing estimate based on what adjustments would be needed to keep profits stable in a building that is 100% rent stabilized. Those ranges were between 2.7% and 4.5% for one-year leases, and between 4.3% and 9% for two-year leases. While not an official recommendation by the board, these significant figures perked up lawmakers’ and advocates’ ears about what could be coming down the pike.
How do these increases compare to other years?
These adjustments for rent stabilized tenants would be larger than what the city has seen in the past eight years. In 2013, the board approved increases of 4% for one-year leases and 7.75% for two-year leases. Former Mayor Bill de Blasio championed minimal rent increases on tenants. In the first two years of the pandemic, the board approved rent freezes for some tenants for at least part of the year.
Tenant advocates said that the increases voted on on Thursday – while lower than what landlords are asking for – will hit renters especially hard now. Any increases, advocates said, will be unmanageable for low-income renters. “We don’t think tenants can support a rent increase in a year like this one,” Samuel Stein, a housing policy analyst at the Community Service Society, told City & State.
How final was Thursday’s vote?
The increases voted on the Rent Guidelines Board on Thursday night were preliminary, but if recent history is any indication, the final figure will likely fall somewhere within that range. For the past 18 years, the final approved figure for rent increase has fallen squarely in the range decided upon in the board’s preliminary vote. That figure has varied somewhat – in some years falling towards the lower end of the range laid out in the preliminary vote and in other years falling towards the higher end. The vote to determine the final figure is scheduled for next month.
Where do key elected officials stand on rent hikes?
Mayor Eric Adams has spoken about the importance of supporting small landlords and has been viewed as supportive of a rent hike. On Thursday night, Adams seemed to take credit for the ranges approved in the preliminary vote being lower than what was floated by the board staff earlier. “I believed that the numbers initially reported were much too high, so I called for a better balance – and it is good the board moved lower,” Adams said in a statement. “But if rents and the other costs of living are going to go up with inflation and other economic issues, then so too must government support, which is why I have been fighting for a more generous housing voucher program, a more robust earned income tax credit, and significant investments in child care.”
New York City Council Speaker Adrienne Adams called on the board to stick to the lower end of the preliminary ranges in its final vote next month. Adams had strongly objected to the increases floated by the staff of the board of up to 9% in mid-April. “While it's positive that the Rent Guidelines Board reduced the potential range of proposed rent increases from one being the largest since 1990, I remain concerned and opposed to the higher ends of these ranges being counterproductive to the housing crisis facing New Yorkers,” Adrienne Adams said in a statement on Thursday night. “I urge the board to take a holistic view of our city’s economic health and reduce harms to struggling New Yorkers by staying in the lower range in its final decision.
Ahead of the vote on Thursday, the City Council’s Progressive Caucus denounced the possibility of high rent hikes. “We do not buy into the myth that ‘mom-and-pop’ landlords are bearing the brunt of the policy decision before the Rent Guidelines Board,” the statement read. “These landlords do exist, to be sure, but they are not the norm.”
Who is on the Rent Guidelines Board?
The Rent Guidelines Board is made up of nine members, each appointed by the mayor. Two are appointed to represent tenants, two are appointed to represent owners, and five represent the general public.
Today, the board includes six members who were appointed by de Blasio and whose terms finish at the end of this year. Eric Adams has appointed three new members – Arpit Gupta, Christina Smyth and Adán Soltren. Smyth, the leader of a law firm that represents building owners and operators, was appointed to represent owner interests. Soltren, an attorney with the Housing Justice Unit at the Legal Aid Society, was appointed to represent tenant interests. And Gupta, a professor of finance at New York University Stern School of Business, was appointed as representative of the general public. Gupta, however, has been viewed by tenant advocates as too friendly to landlord interests, worrying those advocates that Adams’ future picks will skew the board to favor owners.
On Thursday, Gupta voted against both the owner and tenant advocates’ proposals, and voted in favor of the hikes presented by the board’s chair.
What happens next?
Over the next month, the Rent Guidelines Board will hear additional testimony from both tenants and landlords on the proposed allowed increases in two hearings. A vote on the final guideline for next year is scheduled to take place on June 21.