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Deals & Dealmakers

Landlords group to call for four percent hike on one-year leases

The Rent Stabilization Association, which has sued the de Blasio administration over issues such as water rates and rent freezes, will call for a four percent increase on one-year leases and an eight percent increase on two-year leases at a Rent Guidelines Board meeting on Thursday.

“Over the past three years, owners of rent-stabilized apartments have experienced an increase in operating costs in excess of 11%, according to RGB data. Over that same period, the RGB has limited rent increases to 1%, including consecutive rent freezes in 2015 and 2016 – depriving landlords of the only revenue source they need to pay property taxes, which de Blasio has raised every year, and to maintain, repair and preserve affordable housing for their tenants,” said Joseph Strasburg, the organization’s president.

The group, which says that there is no rationale for a third consecutive rent freeze, accused the city of using rental rates as a political tool. According to Strasburg, the RSA based its rent increase target on RGB data that showed a 6.2 increase on the cost of operating a residential building and a projected 4.4 percent jump on the price index.

However, there is also RGB data for justifying a rent freeze. According to a report from last March, the net operating income of landlords grew by 10.8 percent from 2014 to 2015, the highest increase since 1998.

“De Blasio has claimed that operating costs over the past few years didn’t justify rent increases, but rather, he said, they justified rent freezes. This year’s numbers clearly demonstrate justification for a rent increase – but it’s an election year and de Blasio controls all nine members of the RGB,” Strasburg said.

“The RGB’s position over the past three years is unsustainable – and with this year’s PIOC, the RGB will be hard-pressed to vote for another rent freeze. The RGB’s actions over the past three years have punctured a significant economic lifeline of the city’s economy and have been bad for affordable housing and the tenants that de Blasio and the RGB purport to protect.”

The RSA has had mixed results in its legal skirmishes with the de Blasio administration. Last February, the group won a lawsuit to block the city’s plan to hike water rates and give homeowners a $183 bill credit. The verdict ensures that water rates will stay at last year’s prices. However, it lost its bid to overturn the rent freeze last March. A verdict handed down by Manhattan Supreme Court Judge Debra James took into account a previous ruling that allowed the RGB to consider “tenant’s economic situations.” The RSA said that it would appeal the ruling.

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