A commission in New York, which regulates rents for about one million stabilized rental apartments, approved the highest increase in nearly a decade on Tuesday after property owners said they were under pressure from taxes and rising costs.
At a high-profile meeting at the Cooper Union in Manhattan, the Rental Council voted 5 to 4 to increase rents for one-year leases by 3.25 percent in stabilized housing and for two-year rents by 5 percent.
Many tenants argued for freezing or returning rents, while landlords sought even higher increases, but the commission signaled its intention to support a mid-level approach at a meeting last month. The increases affect approximately two million New Yorkers.
New York, which is already one of the most expensive places to live in the country, has seen the cost of living rise amid a recovery from the worst of the pandemic. Rising inflation has hit tenants and property owners, and the effect on landlords’ ability to maintain buildings has been one of the main factors the board has taken into account. But the vote also heightened concerns about the lack of affordable housing and the sustainability of the city’s reconstruction.
The audience on Tuesday was full of dozens of people dressed in brightly colored orange and yellow T-shirts declaring their membership in various tenant organizations. Their shrill whistles, banging on chairs, screams, and chanting of “housing is a human right” echoed throughout the room, at times completely drowning out the voices of board members.
As the chairman of the board, David Reyes, outlined the reasons for the increases, dozens of people stood up, turned their backs on him and chanted, drowning him out.
The annual vote is always tense and provokes intense protests and lobbying by advocates for both tenants and landlords. But this year the meeting came after tens of thousands of tenants lost their jobs and struggled to make payments during the pandemic.
It was also the first vote held during the administration of Mayor Eric Adams, and the board took a different approach from that of his predecessor, Bill de Blasio. The panel is effectively overseen by the mayor, who appoints all nine members – five representing the public and two each as tenants and landlords. Representatives of tenants and landlords voted against on Tuesday night.
While Mr Adams said he had lobbied the board to accept lower increases, he also expressed sympathy for small property owners who need rental income to make up for rising costs.
“The decision taken by the Rental Guidelines Council today will unfortunately be a burden for tenants at this difficult time – and it is disappointing,” Mr Adams said in a statement after the vote.
“At the same time,” he added, “small landlords are at risk of bankruptcy due to years without any increases, putting building owners at risk with modest means while endangering the quality of life of tenants who deserve to live well.” maintained, modern buildings. ”
Mr de Blasio had focused more on tenant costs. During his tenure, the highest annual increases approved by the board were 1.5% for one-year leases and 2.75% for two-year leases. Inflation was also relatively low during his rule.
The last time there was a significant increase – 4 percent for a one-year lease and 7.75 percent for a two-year lease – was in 2013, when Michael R. Bloomberg was mayor.
The increases approved on Tuesday will apply to leases that start on or after October 1.
New York’s rental stabilization system, first introduced in the late 1960s, remains a crucial source of affordable housing.
The average income for people living in stabilized rental homes is about $ 47,000, compared to $ 62,960 in unregulated homes, according to a recent city survey. The average monthly rent for stabilized rental apartments is $ 1,400, according to the study, compared to $ 1,845 for unregulated housing.
And stabilized rents are in stark contrast to the exorbitant prices seen in recent months in some parts of the city: the average rent for an apartment recently rented in Manhattan in May was $ 4,975 a month, up 22 percent from a year earlier. according to a report by real estate firm Douglas Eliman.
Tuesday’s result was a blow to tenants, many struggling to pay their rent even before the pandemic. Proponents of housing have been lobbying aggressively over the past few weeks for the board to reverse its course and support a freeze or cancellation of rents.
Mei Xia Yu, who has lived in her stable two-bedroom apartment for rent in Chinatown for 15 years, said after the vote that her “heart is very restless”.
“It added too much,” she said. “No one can afford it.”
Adan Saltren, who was appointed to the board this spring by Mr Adams and one of the two tenants who voted against the increases, called the decision to support them “unfair”.
“Your decision will hurt millions of people as long as corporations and investors continue to profit,” he said.
At the commission’s public hearing in the Bronx last week, more than 60 of the 70 or so speakers were tenants, tenant advocates and elected officials who argued for rent cuts or rent freezes. Many speakers became emotional during their testimonies, expressing hopelessness at any increase and disappointment at the poor conditions in their homes.
The increases approved on Tuesday also disappointed landlords, who said the buildings would deteriorate without additional rental income to offset the increased costs.
“We risk the collapse of stabilized rental housing,” said Christina Smith, one of two landlord members who voted against the proposed increases, saying they were insufficient.
Landlords said they are under pressure from strict new laws passed in 2019, which limit their ability to raise rents when the apartment is vacant or modernized.
Brian Leaf, a landlord who witnessed last week’s meeting, called for an increase in rents of at least 8 per cent and said rental incomes were already too low to bring many homes up to living standards. But he said he was “demoralized” by what appeared to be a prejudiced conclusion on behalf of the tenants, and that “decisions seem to be based on who shouts the loudest.”
Both Mr Adams and the landlords’ groups referred to the difficulties experienced by the landlords of “mom and dad” when arguing in favor of the rent increase.
But because existing laws make it difficult to determine who actually owns a building, it is unclear how many of the owners of stabilized rental homes actually own smaller properties compared to landlords with much larger and more diversified portfolios.
A rough analysis carried out by board staff in June 2020 suggests that more than 61% of stabilized rental housing was owned by landlords owning 10 units or less.
But a separate analysis of real estate records published last week by the JustFix.nyc group, a technology company that tracks property ownership, suggests just the opposite: more than 60 percent of stabilized rental housing is owned by landlords with portfolios of more than 1,000 units. whole. In contrast, about 1% of stabilized rental housing is owned by landlords who own less than 10 units in total.
“The data unequivocally show that large landlords own most of the stabilized rental housing in New York,” the group said last week.
Téa Kvetenadze contributed to the reports.
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