The Rent Stabilization Association, which represents 25,000 landlords of one million rent-stabilized apartments in neighborhoods across the five boroughs, is calling for modest rent increases of between two and four percent on one-year leases.
RSA also called for a range of three to five percent increases on two-year leases during testimony at a meeting held remotely today (Thursday) by the city’s Rent Guidelines Board, which sets the rent guidelines for rent-stabilized apartments.
The RGB will announce its preliminary guidelines range at a virtual meeting next Wednesday, May 5, followed by two public hearings in June before the 9-member board takes its final vote on June 23 on rent guidelines that would be effective from Oct. 1, 2021 to Sept. 30, 2022.
“This range of rent guidelines is a starting point that enables owners to recover from last year’s rent freeze and the draconian changes to the state’s rent laws of 2019 that deny landlords the revenue they need to upgrade and maintain their buildings and apartments,” said Vito Signorile, RSA Vice President of Communications, during today’s testimony before the RGB.
“A rent-guideline increase of no less than 2% would help reverse a seven-year trend in which the RGB’s past rent adjustments – including last year’s and two previous rent freezes – have deliberately ignored the board’s own research data that pointed to necessary rent increases,” Signorile continued.
“For the past seven years, the RGB has acted on the false and inaccurate premise of correcting past over-compensation of landlords. The numbers, however, tell a different story of a true and accurate picture,” added Signorile.
The average rent guideline increase from 2002-2013 was 3.3 percent, below the 5.8 percent average price index of operating costs – the costs needed by landlords to operate a building – and from 2014 to 2020, there has been severe under-compensation, with an average three-quarters of one percent one-year rent increase, compared to an average 3.6% increase in operating costs, according to Signorile.
“From the onset of the COVID-19 outbreak, city and state elected officials have placed the economic burdens of the pandemic squarely on the shoulders of building owners, encouraging the cancel-rent mantra and other unsustainable, politically driven policies. Hundreds of dollars in federally enhanced unemployment benefits, stimulus that has provided a family of four, for example – regardless of employment status – as much as $11,400, a state-established excluded workers fund that provides undocumented workers with a one-time payment of up to $15,600, and other programs have generously and robustly supported financially struggling tenants – and rightfully so,” Signorile said.
“But landlords have gotten zero relief, yet are still expected to meet their obligations of paying increased property taxes and maintaining and repairing the affordable housing that they provide to millions of New Yorkers,” said Signorile, citing today’s U.S. Commerce Department report that the U.S. economy is growing at a 6.4% annual rate and is on track to reach pre-pandemic levels by July or August, due largely to easing of restrictions and stimulus-strengthened consumer spending.
“Unemployment claims continue to decline, the pandemic is dissipating, millions of New Yorkers are vaccinated, business lockdown measures are being loosened or lifted. Recovery is on the way, people are going back to work, and the Mayor’s announcement today of the city’s plans to fully reopen on July 1 is indicative of that,” said Signorile.
“Another rent freeze would mean the RGB is ignoring the fact that the past 12 months have been a once-in-a-lifetime anomaly – and it would be a blatant disregard of its mandate and the past two years of the board’s own data that shows increased owner expenses and no relief in property taxes and other operating costs.”
Signorile said that although Albany legislators have dragged their feet for months in getting a program off the ground to distribute $2.4 billion in federal rent relief funds – which many other states have swiftly doled out – these funds will soon be distributed to all qualified tenants, regardless of their immigration status.
“But these rent relief dollars will only make owners whole for the last year. The RGB must address this year’s increase in operating costs, on top of last year’s operating costs that were swept under the rug because of the pandemic. The RGB did nothing to address last year’s first decrease in net operating income in nearly 20 years, a direct impact of consecutive rent freezes and historically-low rent guidelines,” Signorile said.