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No winners in rent ‘popularity contest’

A decision to freeze rents for one million New York City apartments could sound the death knell for affordable housing in the city, according to at least one legal analyst.

Shewin Belkin, a housing law expert and a founding partner at law firm Belkin Burden Wenig & Goldman, accused the de Blasio-appointed Rent Guidelines Board of taking part in a “popularity contestˮ instead of fulfilling its legal obligations.

And he warned that the decision would ultimately be detrimental to the city.

“The Rent Guidelines Board appears to have tossed aside its legal mandate and opted instead to participate in a popularity contest,ˮ said Belkin.

“The criteria that the RGB is obligated to adhere to in determining rent increases were not followed. Instead, the Board’s majority passed historically low percentages based upon what seem to be personal and political bias.The demonization of the real estate industry and focus upon short-term political grandstanding will ultimately hurt owners, hurt affordable housing, hurt tenants and hurt New York City.”

For the first time in its 46-year history, the RGB voted 7-2 to freeze rent for one-year leases, during a raucous meeting at the Cooper Union for the Advancement of Science and Art on Monday night.

It also approved a two percent hike for tenants on two-year leases. The terms apply to tenants who renew or sign new leases starting on Oct. 1, 2015.

New York City Mayor Bill de Blasio, who pushed for a rent freeze during the RGB’s deliberations last year, applauded the decision, saying that the board made “the right call.”

“We know tenants have been forced to make painful choices that pitted ever-rising rent against necessities like groceries, childcare and medical bills. Today’s decision means relief,” de Blasio said.

He also justified the move by mentioning a 21 percent drop in fuel costs over the past year, something that was raised when the board decided on the range for the increase last May.

The Price Index of Operating Costs, a report that outlined the operating costs for landlords, revealed that landlord expenditures rose by 0.5 percent.

Rent, on the other hand, has been on a steady rise. According to a study from apartment website Streeteasy, the average resident is now paying as much as 60 percent of their income to live in New York City, with the median monthly rent at $2,700.

The percentage is twice as much as the federal guidelines. The government suggests that only one-third of a person’s income should go into paying rent.

The decision is the first vote for the revamped board, which is comprised fully of de Blasio appointees.

Last March, de Blasio appointed three new members to the board, thereby eliminating holdovers from the Bloomberg administration.

Tenant advocates say that the freeze offsets the disappointment from the State Legislature’s failure to strengthen rent regulation. “Cuomo betrayed us, the RGB can save us,” was chanted by tenant supporters before the vote.

“Though I remain disappointed with the rent legislation passed by the State last week, this decision will offer slight relief as we continue the fight,” said Assembly member Diana Richardson.

The freeze comes a year after the board approved what was then a record low rent increase. In June of last year, the board voted 5-4 for a one percent increase on one-year leases and a 2.75 percent increase on two-year leases.

Joseph Strasburg, president of the Rent Stabilization Association, criticized RGB’s decision, saying that the board “appeased de Blasio’s political agenda at the expense of lives and homes of millions of tenants.”

“It is despicable that politics prevailed over common sense. There is no basis for a rent freeze. Previous mayors let this independent Board do what was necessary to preserve the City’s largest source of affordable housing,” Strasburg said.

“Ironically, de Blasio’s mantra has been the preservation of affordable housing, but his support of a rent freeze, coupled with last year’s one percent rent increase, will have the opposite effect, spurring the deterioration and eventual eradication of affordable housing.”

Strasburg, who heads an organization that represents 25,000 owners of rent-stabilized apartments, argued that the rent freeze takes away the income of building owners, making it harder to pay an upcoming increase in both property taxes and water rates.

The Real Estate Board of New York, which worked with the mayor for lobbying on 421-a, declined to discuss the vote, instead redirecting a request for comment to the RSA.

Rental rates for rent-regulated apartments have gone up since the RGB started deciding on rate increases in 1969. One of the highest hikes came in 2008, when the board voted for a 4.5 percent increase for one-year leases and an 8.5 percent increase for two-year leases.

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