Rents will increase by at least 3.25 percent for 2 million New Yorkers

A New York City panel that regulates rents for about a million rent-stabilized apartments approved the highest increases in nearly a decade on Tuesday, after landlords said rising taxes and spending were hurting them. .

In a raucous meeting at Cooper Union in Manhattan, the Rent Guidelines Board voted 5-4 to raise rents on one-year leases by 3.25 percent on rent-stabilized housing, and on two-year leases by a 5 percent.

Many tenants advocated rent freezes or reductions, while landlords sought even higher increases, but the panel had signaled its intention to support a middle-of-the-road approach at a meeting last month. The increases affect approximately two million New Yorkers.

New York City, already one of the most expensive places to live in the nation, has seen the cost of living rise amid an uptick from the worst of the pandemic. Skyrocketing inflation has affected renters and landlords, and the effect on landlords’ ability to maintain buildings was one of the main factors the board considered. But the vote also heightened concerns about the shortage of affordable housing and the sustainability of the city’s recovery.

The auditorium was packed Tuesday with dozens of people wearing bright orange and yellow T-shirts declaring their membership in different tenant organizations. Their piercing whistles, banging on chairs, shouting and chants of “housing is a human right” echoed throughout the room, sometimes completely drowning out the voices of board members.

As board chairman David Reiss outlined the reasons behind the raises, dozens of people stood up, turned their backs on him and sang, drowning him out.

The annual vote is always tense and generates intense protests and lobbying by both tenant and landlord advocates. But this year’s meeting came after tens of thousands of renters lost their jobs and struggled to make payments during the pandemic.

It was also the first vote to take place during Mayor Eric Adams’ administration, and the board took a different approach than it did under his predecessor, Bill de Blasio. The panel is effectively controlled by the mayor, who appoints the nine members: five representing the public and two each for renters and landlords. Tenant and landlord representatives voted no Tuesday night.

While Mr. Adams has said he pushed the board to adopt lower increases, he also expressed sympathy for small property owners who need rental income to offset increased expenses.

“Unfortunately, today’s Rent Guidelines Board determination will be a burden to tenants at this difficult time, and that is disappointing,” Mr. Adams said in a statement after the vote.

“At the same time,” he added, “small landlords risk bankruptcy due to years without a raise, putting building owners with modest means at risk and threatening the quality of life for renters who deserve to live in well-off homes.” modern and maintained buildings.”

De Blasio had focused more on tenant costs. During his tenure, the highest annual increases approved by the board were 1.5 percent on one-year leases and 2.75 percent on two-year leases. Inflation was also relatively low during his administration.

The last time there was a significant increase (4 percent on one-year leases and 7.75 percent on two-year leases) was in 2013, when Michael R. Bloomberg was mayor.

The increases approved Tuesday will apply to leases beginning on or after October 1.

New York City’s rent stabilization system, first implemented in the late 1960s, remains a crucial source of affordable housing.

The median income of people living in rent-stabilized housing is about $47,000, compared to $62,960 in unregulated housing, according to a recent city survey. According to the survey, the median monthly rent for rent-stabilized apartments is $1,400, compared to $1,845 for unregulated housing.

And stabilized rents contrast sharply with exorbitant prices seen in recent months elsewhere in the city: The median rent for a newly rented apartment in Manhattan in May was $4,975 a month, a 22 percent increase over the year. earlier, according to a report by real estate firm Douglas Elliman.

Tuesday’s result was a severe blow to renters, many of whom were struggling to pay rent even before the pandemic. Housing advocates had pushed aggressively in recent weeks for the board to change course and support a rent freeze or reduction.

Mei Xia Yu, who has lived in her rent-stabilized two-bedroom apartment in Chinatown for 15 years, said after the vote that her “heart is very restless.”

“It added too much,” he said. “No one can afford it.”

Adan Soltren, who was appointed to the board this spring by Mr. Adams and is one of two tenant representatives who voted against the increases, called the decision to support them “unfair.”

“Their decision will result in millions of people suffering while corporations and investors continue to make profits,” he said.

At the panel’s public hearing last week in the Bronx, more than 60 of the roughly 70 speakers were tenants, tenant advocates and elected officials who advocated for a rent reduction or rent freeze. Many of the speakers became emotional during their testimony, expressing hopelessness at any increase and frustration at the poor conditions in their homes.

The increases approved Tuesday also disappointed landlords, who said buildings would deteriorate without additional rental income to offset increased expenses.

“We risk a decline in rent-stabilized housing,” said Christina Smyth, one of two members representing landlords who voted against the proposed increases, saying they were insufficient.

Landlords have said they are being pressured by tough new laws passed in 2019, which restricted their ability to raise rents when an apartment became vacant or was upgraded.

Bryan Liff, a landlord who testified at the meeting last week, pushed for rent increases of at least 8 percent, saying rental income was already too low for many units to meet livable standards. But he said he was “demoralized” by what appeared to be a foregone conclusion on behalf of the tenants, and that “decisions seem to be based on who yells the loudest.”

Both Mr. Adams and landlord groups have focused on the difficulties “mom and pop” landlords experience when arguing for rent increases.

But because existing laws make it difficult to determine who actually owns a given building, it’s unclear how many of the rent-stabilized homeowners are actually smaller owners versus owners with much larger, more diversified portfolios.

A rough analysis by board staff in June 2020 suggested that more than 61 percent of rent-stabilized units were owned by landlords who owned 10 or fewer units.

But a separate analysis of property records published last week by the group, a technology company that tracks property ownership, suggested just the opposite: More than 60 percent of rent-stabilized homes are owned. of owners with portfolios of more than 1,000 units in total. In contrast, about 1 percent of rent-stabilized units are owned by landlords who own fewer than 10 total units.

“The data unequivocally shows that large landlords own the vast majority of rent-stabilized housing in New York City,” the group said last week.

Kvetenadze-tea contributed report.

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