Saying Landlords Need More Money When It Ends
With the city Rent Guidelines Board again meeting online to vote on permissible increases for rent-stabilized apartments in the coming year June 23, tenant representatives Sheila Garcia and Leah Goodridge found a way to create audience participation: They joined the meeting remotely from Cooper Square, backed by several dozen people chanting “What do we want? Rent freeze! When do we want it? Now!”
The RGB, however, gave only a limited rent freeze. By a 5-4 vote, it approved a six-month rent freeze for rent-stabilized tenants who renew their leases for one year, with landlords able to raise rents by up to 1.5 percent for the second six months. It allowed increases of 2.5 percent for two-year leases.
“Once again, the public members are voting with the landlords,” Garcia said before voting no. Owner representative Robert Ehrlich joined chair David Reiss and three other public members to form the majority. Public member Cecilia Joza voted no.
The meeting lasted for barely 45 minutes.
The increases allowed for leases renewed in the year beginning Oct. 1 will be among the largest of the past seven years, second only to the 1.5 percent and 2.5 percent voted in 2018 and 2019. The RGB froze rents for one-year leases in 2015, 2016, and 2020. Last year’s guidelines also barred raising rents during the first year of a two-year lease, with a 1 percent increase granted in the second year.
“The Rent Guidelines Board has made another cruel and shameful decision tonight, continuing to perpetuate the lie they used in 2020: They’re claiming once again that landlords have suffered more than tenants during the pandemic,” Met Council responded in a statement. “This proposed increase, no matter how small, WILL lead to evictions and displacements. We are devastated that the Rent Guidelines Board did not listen to the hundreds of tenants that testified on the need for a rent freeze. Landlords have seen net operating income increase for 14 of the last 15 years, while our incomes have not kept up.”
Reiss told the about 160 people watching online that while housing had been unaffordable in New York before the COVID-19 pandemic, with more than half of rent-stabilized tenants spending more than 30 percent of their income on rent, and had gotten worse during the pandemic, with more than 20 percent of tenants falling behind on their rent and unemployment in the city still at 11 percent in May, there was now “light at the end of the tunnel.”
Landlords need to get more rent, he said before the meeting adjourned, because the share of their revenues they spend on operating and maintenance costs has risen slightly, to between 60 and 65 percent of income. (The 65 percent number is based on unaudited data.) Interest rates have fallen, he said, but insurance costs have gone up significantly, and owners have also lost income from tenants unable to pay their rent.
The six-month freeze, he stated, would “provide additional time for economic recovery” before tenants had to pay more.
Garcia said that while the increases permitted might seem “modest” to board members, they would be a heavy burden for tenants with low-wage jobs. Before she voted against the ‘modest proposal,’ she went around the Cooper Square crowd, composed of contingents from Good Old Lower East Side, CAAAV from Chinatown, CASA from the Bronx, and Met Council, asking people if they could afford to pay an extra $10 or $30 a month in rent.
The crowd chanted “hell no.”
Tenant groups had demanded a rent rollback before the RGB’s preliminary vote in May, and two of the 15 proposals board members mooted would have rolled back rents, by either 2.5 percent or 5 percent for a one-year lease. The proposal Garcia and Goodridge presented, though, was for no increase on one-year leases and 1 percent for two years.
“We are not going back, we are going forward,” Goodridge declared. Decades of rent increases, she added, have “created an unequal system” in which it’s difficult to find even a studio apartment for less than $1,500 a month anywhere in the city.
It was rejected 6-3, with public member Christian Gonzalez-Rivera voting yes.
“Our proposal was based on viability after speaking with board members and getting a sense of what was most likely to pass,” Goodridge told Tenant/Inquilino several days later. “It wasn’t that far off from the proposal that ultimately passed.”
Ehrlich argued that the RGB should not consider tenants’ ability to pay rent when setting guidelines, because the minute it does, it’s “making policy” and forcing landlords to subsidize tenants. The board’s job, he averred, is only to set increases that are sufficient to cover owners’ rising operating costs, and those increases aren’t unreasonable.
“There is a social safety net for tenants who can’t pay rent,” he said, and if people think it’s inadequate, it’s the government’s job to fix that, not the RGB’s.
His proposal, to allow raising rents by 2.75 percent for one year and 5.75 percent for two years, was defeated by the usual 7-2.
For the five classes of residential hotels and rooming houses, the board voted to freeze rents for the tenth consecutive year. The vote was also 7-2, with the two owner representatives dissenting.
Assemblymember Linda B. Rosenthal (D-Manhattan), posting on Twitter an hour after the vote, called the increases “stunning.”
“After one of the worst economic crises in U.S. history, tenants collectively owe more than $1 billion in rent,” she wrote. “They are struggling to feed their families, yet the RGB, in its infinite wisdom, thinks they’ll miraculously rebound in six months, and somehow with more money than they started with, though many will still be under/unemployed.”