Mayor Bill de Blasio, who is currently facing a federal corruption probe, was quick to take advantage of some good news, cashing in on the political capital created by the Rent Guidelines Board’s decision to freeze rents for one million rent-stabilized apartments for the second straight year.
“I’m convinced that this was an act of fairness. It was long overdue,” he said during a recent episode of the Brian Lehrer Show on radio station WNYC. “The tenants in this city are struggling to make ends meet, and we know that rent is by far the biggest expense in people’s lives. And I think small landlords will be able to make it through fine, in large part because of the extreme value that a lot of their buildings are getting now.”
While de Blasio said that he is sympathetic with smaller landlords, he claims that “real costs” do not justify a rent hike.
“Under our laws, we have to look at real costs. And small landlords have also experienced the great reduction in fuel costs in the last couple of years. And they also, bluntly, received some of the inflated rent increases from previous Rent Guidelines Boards,” he said.
John Banks, the president of the Real Estate Board of New York, disputes such claims, saying that the economic reality hurts the city’s housing stock.
“While a rent freeze might sound like welcome news for tenants and make for good newspaper headlines or sound bites – the economic reality is that freezing rent increases makes it more difficult for owners to finance improvements and secure lending for new rental and affordable housing development,” Banks said in his weekly REBNY Watch op-ed.
“Operating expenses, such as taxes, water and sewer rates continue to rise at unsustainable levels. Likewise, the cost for normal repairs and maintenance-for both material and labor- are also rising. Preserving the quality of New York City’s housing stock requires a reliable and growing income stream to meet ordinary operating expenses as well as to prepare for capital improvements which are vital for our old housing stock.”
REBNY is not alone in its opposition of the rent freeze. The Rent Stabilization Association, which represents 25,000 landlords who own one million rent-stabilized apartments, immediately sued the RGB after it announced its decision.
“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,” the group said.
The RSA recently won a lawsuit against the city’s plans to raise water rates and provide $183 in bill credits to homeowners. Until the case is decided on appeal, the city will implement its plan. Nonetheless, De Blasio criticized the court’s decision.
“Right now, they’re (RSA) hurting 660,000 homeowners who would be getting that credit on their water bill, and we’d be able to start doing better by them on water bills, going forward. That’s going to be fought out in court,” he said.
Last week, the RGB voted 7-0 to freeze rents for rent-stabilized tenants on one-year leases. Two-year leases, meanwhile, will go up by two percent. In reaching its decision, the RGB voted against a three-percent increase on one-year leases and a proposal for a rent rollback.