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Deals & Dealmakers

Landlords group questions rent board’s ‘alternative data’

The group that represents 25,000 landlords of one million rent-stabilized apartments last week accused the Rent Guidelines Board of playing fast and loose with its math.

“The fix is in. These are nothing more than alternative numbers from the de Blasio puppets on the Rent Guidelines Board and the city’s finance department to set up a third consecutive rent freeze to help puppet master de Blasio in his re-election bid,” said Joseph Strasburg, president of the Rent Stabilization Association, which represents landlords in the five boroughs.

Strasburg was reacting to the RBG’s latest report that said net operating income in buildings with stabilized apartments increased 10.8 percent from 2014 to 2015, the highest recorded increase since 1998.

Net operating income refers to earnings after operating and maintenance costs are paid but before income taxes and debt payments. The study’s methodology, said the RSA, doesn’t take into account major expenses.

Strasburg provided an example of a typical 15-unit building with an average rent of $1,323 per apartment. That’s $238,140 a year (12 months x $19,845 per month).

“So how can the average net operating income be $256,000? Simple – it’s de Blasio’s alternative data – making the numbers work for another rent freeze in an election year. The RGB’s numbers defy logic. How can net income increase when expenses and costs are rising and rents are frozen?” Strasburg said.

The RGB measures changes in prices and costs using the Price Index of Operating Costs (PIOC), a survey of prices and costs for various goods and services required to operate rent stabilized apartment buildings, compared with actual expenses reported by owners, as well as Real Property Income and Expense (RPIE) statements filed annually by property owners

In its report, the RGB states, “By using consecutive RPIE filings from an identical set of buildings, a longitudinal comparison can be made that illustrates changes in conditions over a two-year period. Most importantly, I&E data encompasses both revenue and expenses, allowing the Board to more accurately gauge the overall economic condition of New York City’s rent stabilized housing stock.ˮ

Strasburg, however, said, “How can we trust this data when de Blasio himself has admitted in a public forum and media reports that he controls the RGB because he appointed all nine members and instructed them to vote for rent freezes last year and in 2015?”

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