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Deals & Dealmakers

Report: Rent-stabilized Stuy Town tenants see highest rent hikes in the city

By Maria Rocha-Buschel

Rent-stabilized buildings in the Stuyvesant Town and Gramercy area had the greatest increases in rent in Manhattan from 2014 to 2015, a study released by the Rent Guidelines Board found.

Stuyvesant Town. Photo by Marianne O'Leary/ Flickr
Stuyvesant Town. Photo by Marianne O’Leary/ Flickr

According to the data, announced in the RGB’s 2017 Income and Expense Study, rent went up by 7.6 percent in Community District 6, which includes Stuyvesant Town, Peter Cooper Village, Gramercy Park and Murray Hill.

Rent increased in every community district in the city in that time frame, with only three Brooklyn neighborhoods with higher increases than district 6.

Although stabilized rent increases are governed by the guidelines set out by the RGB, variations occur because of vacancy allowances, the termination of preferential rents, individual apartment improvements and building-wide improvements.

The study, which examines Real Property Income and Expense (RPIE) statements from rent stabilized buildings filed with the Department of Finance, also found that net operating income (NOI) for owners grew by 10.8 percent, marking the 11th consecutive year that the NOI has increased.

The study does not break down the NOI increases by community district, but the increase in core Manhattan, which is defined as south of West 110th Street and south of East 96th Street, was 7.8 percent.

The study also found that the proportion of distressed properties throughout the city declined to the lowest level in the history of the survey, decreasing 0.9 percentage points from the previous year. Properties are considered distressed if the operating and maintenance costs are greater than the gross income.

RGB tenant members Sheila Garcia and Harvey Epstein encouraged the board to have representatives from the Division of Housing and Community Renewal (DHCR), the state agency that administers rent laws, testify at one of the board’s meetings because the data differs slightly from what is provided by DOF. Epstein argued that analyzing data from DHCR would give the board a more complete picture of how many buildings are struggling and which are not.

“It’s problematic that we’re voting on something and don’t get to see all of the data,” he said. “Rents and (owners’) income have skyrocked while costs seem to have leveled.”

The overall purpose of the study is to examine the conditions in the rent-stabilized housing market and to determine how much the conditions changed from the previous year.

Studying both revenue and expenses allows the RGB to more accurately assess the economic conditions affecting the city’s rent stabilized housing stock.

Tenants and landlords will be able to provide testimony at a public meeting later this month, in the Landmarks Preservation Commission conference room at 1 Centre Street on the ninth floor. The preliminary vote will take place at Cooper Union’s Great Hall, 7 East 7th Street, on Tuesday, April 25 at 7 p.m.

The RGB’s next public meeting, Thursday, April 13 at 9:30 a.m., will take place at 1 Centre Street as well and will include a presentation on the Price Index of Operating Costs, which the board also considers when voting on the annual rent increases.

In 2000, 99 percent of Stuy Town’s 11,232 apartments were rent stabilized. By 2015, nearly half had been deregulated, according to the New York Times

In 2016, the Blackstone Group partnered with Canadian pension fund Ivanhoé Cambridge to purchase the 110-building complex for $5.3 billion under a deal struck with Mayor Bill de Blasio that guarantees 5,000 apartments will be kept affordable for the next 20 years.

Last week, affordable housing lottery winner Nichole Levin secured a one bedroom apartment in the complex for $2,900 per month, including two surcharges for air conditioners.

The equivalent market rate one bedroom in Stuy Town is currently listed as “starting at  $3,360 per month.ˮ

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