A long-suppressed study obtained by the Voice shows that when it comes to rent, politics can be just as important as research. The report, commissioned by the city’s Rent Guidelines Board, had been squelched by RGB chair Ed Hochman, who argued that its reliance on old statistics made it flawed. Last week, Hochman released a long-awaited revised version with current data. But the August 6 document only confirmed what most tenants already know: The 1997 changes in the rent laws have combined with the superheated economy to drive prices skyward and knock thousands of apartments out of rent regulation.
Like the August study, the report obtained by the Voice, dated June 2, surveyed 2285 tenants who moved after the state assembly changed the rent laws in June 1997 and compared their rents to the ones paid by previous tenants. The June study compared the movers’ rents to rents paid in 1996; the August study compared them to 1997 rents.
According to the August document, rents citywide have gone up 12 percent, with spikes of 21 percent in core Manhattan. As many as 5000 apartments have been deregulated. While those numbers are remarkable, they fall short of the statistics reported in the suppressed June study: A citywide average rent hike of 17 percent from 1996, a Manhattan core hike of 28 percent, and a projection that 8400 apartments would be deregulated by this year.
While the June study’s reliance on old data makes it less precise than the August report, its contents lend credence to what critics have said: that Hochman withheld the data because its evidence of escalating rents could damage governor George Pataki, who orchestrated the rent battle. The report was due out just days before the June 4 GOP state convention in New York City.
Hochman, who did not return calls by press time, has dismissed any political motivation as absurd. But two RGB members sued him, the board itself, and the city in hopes of obtaining the June report. Ken Rosenfeld and David Pagan, the two tenant representatives on the nine-member RGB, argued in court that the report should be made available to all board members so that the entire board could determine its value. They reasoned that the board’s June 22 vote on rent hikes had been compromised because only Hochman had read the survey.
Hochman had repeatedly argued that the June survey was an optional study and not essential to an informed vote, although survey participants were reminded in several letters that their responses would “help the Rent Guidelines Board set fair rent adjustments for New Yorkers.”
In late July, Supreme Court Judge Louis B. York ordered the release within 48 hours. But no report was forthcoming, and last week Rosenfeld and Pagan filed a contempt motion to force its release. On Monday, sources said, board members received both the June and August reports, both called the Recent Movers Study, in the mail.
According to the August report, the median citywide rent was $804. Among neighborhoods, Wall Street was the most expensive, with rents averaging $2313; East and Central Harlem were least, averaging $550.
Under the changes made to the law last year, landlords of rent-stabilized apartments can hike rents at least 18 percent upon vacancy. Since the citywide jump was only 12 percent, the August report argues that outside of Manhattan’s core, the rent law had little effect.
“The spin that rents in the outer boroughs are not so affected by this is utter nonsense,” says Michael McKee of the New York State Tenants & Neighbors Coalition. “It’s inevitable that a study measuring the effects nine months after the law changed will show the changes are mainly in Manhattan. I’d like to see this report done again in one year and two.”
The RGB is scheduled to meet on August 18 to discuss the data. But it is unlikely to alter its June 22 vote that granted landlords a 2 percent hike for a one-year lease and 4 percent for two-year leases commencing October 1.
While the Recent Movers Study deals primarily with stats about rents, the actual surveys reveal the rigors of the market. One tenant who pays $2300 for a one-bedroom reported being charged a $400 “lease processing fee”; another said the landlord charged a $500 “finders fee” in his own building. And a tenant in a $1360-a-month one-bedroom complained that the apartment was “newly created” when the owner chopped one unit into two. Asked in the survey how much rent was being charged, the recent mover seemed about to become a frequent mover: “Way too much,” was the reply. “We gotta move.”