Rent Increase: Rudy’s RGB Stars in Off-Broadway Farce

“Rudy, Don’t Raise Our RENTS,” read the signs tenants waved at the Rent Guidelines Board’s May 16 meeting. The letters in “RENTS” were stenciled to match the logo of the Broadway musical Rent. The theatrical motif was painfully appropriate for tenants. The outcome of the RGB’s vote on proposed rent-increase guidelines was as predestined as the ending of a play. Without a speck of debate from the five Giuliani-appointed public members, it voted to recommend allowing increases of 5 percent on a one-year lease renewal and 7 percent for two years, plus a 9 percent surcharge on vacant apartments and a $20 “poor tax” on apartments renting for under $400 a month.

If the board approves these guidelines at its meeting on June 24, they would be the highest increases allowed for rent-stabilized tenants since 1989. The vote was 5-2, with the two landlord representatives abstaining and tenant representatives Leslie Holmes and Kenneth Rosenfeld dissenting.

The numbers, says Rosenfeld, came “directly” from Mayor Giuliani’s office. At about 4:30 on the afternoon of the meeting, board chair Edward Hochman received a phone call with instructions as to what the proposed guidelines should be.

“I was there,” Rosenfeld said. “There was a phone call made and received, and people were given their marching orders.”

Elissa Fitzig, one of the two new public members appointed by Giuliani, refused to speak to Tenant after the meeting. Earl Andrews, the other, said that the board had settled on the size of the increases because “that’s the way people felt.” Queried about the Mayor’s influence on the process, he replied “I don’t know. You’ll have to ask him.”

In theory, the public members are supposed to be independent, setting guidelines after assessing tenants’ incomes, landlords’ incomes and expenses, and the state of the housing market. “It’s a corrupt sham,” said Jon Lilienthal of Met Council.

“It confirms what we’ve always suspected about the way this administration has treated the guidelines,” said Holmes, who opened the meeting with comments about “a decision made behind closed doors and called in to the public members.”

At press time, the Mayor’s office had not responded to inquiries from Tenant.

Holmes said later that she found the high vacancy surcharge particularly unjustified, noting that it would allow a 16 percent increase for a new tenant taking a two-year lease. (At the average stabilized rent of $642 a month, this would be over $100.) Rent regulations, she said, “are not meant to only protect tenants in place”; the high vacancy increases mean that families looking for bigger apartments and older people looking for smaller homes are “priced out of the market.”

In other actions, the RGB also recommended similar increases for lofts and no increases for single-room occupancy hotel and rooming-house tenants. For rent-controlled apartments being vacated and becoming rent-stabilized, it recommended a advisory minimum of the maximum base rent plus 35 percent or the maximum collectable rent plus 45 percent, whichever is greater.

RGB meetings are often theatrical confrontations, with tenants and supporters occupying the left and center sections of the Police Plaza auditorium and militant small landlords the right, and both sides cheering, booing and heckling speakers — often provoking angry reactions from Hochman. Rain dampened the turnout this year, but tenants — most wearing pink and white “I’m a Tenant and I Vote” painters’ caps — outnumbered the landlords (waving “We Need $500 A Month MINIMUM” placards) about 120-60.

Yet it was the almost total lack of comment from the public members that made the meeting seem completely scripted. All five voted against landlord representative Joseph Forstadt’s proposal for a $500 minimum rent on vacant apartments, with “highest comparable” increases up to $1,999 allowed. (“This is a total charade,” said Michael McKee of the New York State Tenants and Neighbors Coalition, as he urged tenants in the audience not to applaud.) Rosenfeld’s move for a one percent increase on two-year leases, with no “odious poor tax” or vacancy surcharge, was rejected without debate. Agustin Rivera — the sole public member reappointed by Giuliani — then proposed increases of 4 and 6 percent with an 8 percent vacancy surcharge, one percentage point smaller than the guidelines eventually endorsed. His move was also rejected with minimal debate.

Finally, public member Paul Atanasio proposed the 5 and 7 percent increases, saying they were necessary “to provide affordable, viable housing.”

Leslie Holmes objected, saying that they would add large, permanent increases to rents because of “a one-time spike” in fuel costs. The RGB’s mandate, she added, is to protect the public from unjust and unreasonable rents. “An unjust rent,” she said, “is one based on a spike in fuel costs. An unjust rent is one that includes a poor tax. An unreasonable rent is one that makes it impossible for poor and working people to find housing.”

Landlord rep Forstadt replied that “poverty should not be redressed by one segment of the community — owners of real property,” arguing that rent stabilization was intended to prevent rents doubling and tripling, not 5 percent increases.

Rosenfeld answered that a small group of landlords own more than two-thirds of the city’s apartments and that tenants’ ability to pay rents had dropped dramatically. He said rent increases hurt the city’s economy because “tenants will not be doing other things with their money.”

“Like eating,” wisecracked a voice from the back of the tenant side.

The five public members sat impassively. Without debate, they rejected a proposal by Holmes to delete the $20 “poor tax” for tenants who had already had it added to their rent.

Some increase was considered likely, as the RGB’s “Price Index of Operating Costs” (commonly called the “PIOC”) figures released in April found landlords’ costs had increased by 6 percent last year, mainly due to the heating costs of the severe winter. (Though Rosenfeld pointed out that the board had voted to allow a 4 percent increase last year, when the PIOC showed that landlords’ costs had gone up by a negligible 0.1 percent.)

However, Rosenfeld says he expects that reaction to the proposed increases “is going to be strong,” and that some of the public members may be uncomfortable with taking orders directly from City Hall.

“Nothing higher than last year is justified,” said Holmes. “Tenants should write, call, or fax City Hall to protest these increases.” Landlords, she added, are organizing to push for higher increases on two-year leases and vacant apartments, and, as it’s not an election year, “there’s a danger that City Hall will give it to them.”