New York

Tenants Face A Rent Hike As NYC’s Affordability Crisis Continues

by

Subway billboards and Facebook ads placed by the city tell New Yorkers that if they’re in a rent-stabilized apartment, their rent can’t be increased this year — but the city’s Rent Guidelines Board is likely to end that rent freeze on June 27.

The nine-member board voted 5-4 in April to recommend allowing increases of 1 to 3 percent for a one-year lease renewal and 2 to 4 percent for two years in the city’s about one million rent-stabilized apartments. It’s rare for the RGB to go outside its preliminary range, says Sheila Garcia, one of the two tenant representatives on the board.

More than sixty tenants, however, testified at an RGB hearing in Brooklyn on Monday night, the last of five the board has held before it sets the final guidelines for 2017–18. From Sunset Park, Flatbush, and Williamsburg, these tenants delivered a litany of housing ills — rents rising faster than their incomes, lack of heat and repairs, harassment, and the incessant pressure of gentrification shredding their communities — in English, Spanish, and various Caribbean accents. They urged the board to continue the freeze, chanting “Rent Rollback.”

“I came here to testify because the rent I am paying is above 50 percent of my income,” Bianca Carabajo of Sunset Park, a widow with a teenage son, said in Spanish.

City Council Committee on Housing and Buildings chair Jumaane Williams urged the board to reconsider its proposed increases. “We have almost doubled the number of homeless in this city over the last ten years,” he said. “It is directly related to rent and affordability.”

Only three landlords testified, all small operators. Lincoln Eccles told the board he needed an increase because property taxes on his family’s Crown Heights building have more than doubled since 2015, an increase of more than $1,000 a month. Because those taxes are based on neighborhood property values, he said afterward, gentrification hurts small landlords who prefer the stability of steady tenants and don’t want to hire a lawyer every time someone’s late with the rent. “I hate it when my tenants move out,” he said. “The big guys have the resources.”

Representatives from the Rent Stabilization Association, a trade group for larger operators, signed up to speak but didn’t show up.

It’s widely believed — and widely denied — that one man is the main source of influence on the rent increases the RGB allows: the mayor, who appoints the board’s five ostensibly neutral public members. The lack of discussion at the April vote — RGB chair Kathleen Roberts, who proposed the range of increases, offered no explanation for them, and she and the other public members supplied the five “yes” votes — prompted speculation that Mayor Bill de Blasio had decided that after two years of rent freezes, it was time to give landlords something. (It also echoed the RGB in the Bloomberg era, when the board’s public members inevitably approved rent increases by similar 5-4 votes without a word.)

De Blasio touts those rent freezes as one of his administration’s top achievements, along with universal prekindergarten and a low crime rate. But he told WNYC in April that the proposed increase was justified because “the price of fuel has started to come back up.”

“The Rent Guidelines Board that I’ve appointed was given the specific responsibility of looking at all the facts, not favoring landlords as I think the Rent Guidelines Board often did in the past, but actually looking at all the facts, considering affordability for tenants as an important factor,” the mayor said.

The statistical argument against a rent freeze is that the RGB’s Price Index of Operating Costs, an estimate based on the cost of goods and services such as fuel and plumbing, went up by 6.2 percent last year. There is also a statistical argument to continue the freeze: The RGB’s Income and Expense Study found that owners’ average income had increased 4.4 percent in 2015, the most recent year data was available, while their actual expenses went up only 1.1 percent, and their net operating income, or NOI, grew by almost 11 percent — “the 11th consecutive year that NOI has increased,” the study said.

Another statistical argument against raising rents is that a rent rollback would compensate for the increases the RGB allowed throughout the Great Recession — 8.5 percent with a minimum of $85 a month for a two-year lease in 2008–09  — and bring rents more into balance with tenants’ incomes. The Census Bureau’s Housing and Vacancy Survey for 2014 found that 30 percent of the city’s renters spent more than half their income on rent. Half of rent-stabilized tenants spent more than one-third of their income, with a median of $1,200 rent on an income of $40,600.

In March, a State Supreme Court judge ruled that the RGB had the right to consider “tenant affordability,” dismissing a lawsuit by the Rent Stabilization Association that challenged the rent freeze the RGB voted for on one-year leases last year.

Garcia said the public hearings might persuade the board to freeze rents again, because tenants testifying had been “asking for their humanity.”

“We’re tired of talking about our struggles, but if we have to put a face on our struggles, we will,” said Juliette Bravo, 23, of Bushwick. “Why do we have to fight so hard to maintain a roof over our heads?”