RGB Votes to Make Affordability Crisis Worse

On June 25, amid shouts of “Shame on you!” from a crowd of angry tenants filling the Great Hall at Cooper Union, the city Rent Guidelines Board voted 5-4 to increase rents for rent-stabilized apartments by 1.5 percent for one-year lease renewals, and 2.5 percent for two years. The increases will apply to leases that go into effect in the year beginning October 1.

Chair David Reiss proposed the increases, supported by three of the four other public members. When public member German Tejeda voted no, landlord representative Patti Stone provided the necessary fifth vote. Earlier, Tejeda was the only public member to support the tenant representatives’ motion for a one-year rent freeze, which lost 6-3.

Tenants had a right to be angry. In voting for these increases, the RGB majority neglected its statutory mandate to protect tenants from “oppressive rents,” and ignored the data its own staff provided. The RGB staff’s 2019 Income and Affordability study of tenants’ economic conditions, released April 4, concluded that “a majority of rent-stabilized tenants are not able to afford their rents.” Their Income and Expenses study, which looks at available data on landlord profits, found that owners’ net operating income (the money left after the expense of operating the building is subtracted from total rental income) rose for the 13th straight year, setting a new record of 41 cents of every rent dollar going in the landlord’s bank account.

On May 7, the RGB proposed that this year’s increases should be in the range of 0.5-2.75 percent for one year, and 1.75-3.75 percent for two years. As required by law, it then held a series of public hearings in the Bronx, Brooklyn, Queens, and Manhattan. But despite hearing from hundreds of tenants who spoke from the heart about the hardships their families will suffer if rents go up even more, the board allowed increases in the middle of the proposed range.

The contrast of a record affordability crisis, record homelessness, and record landlord profits would certainly have justified at least a one-year rent freeze, as the board adopted in 2015 and 2016, if not a rollback. But in the week before the final vote, there were rumors that City Hall was pressuring the public members to grant a bigger increase to compensate landlords for losses they claimed they were going to suffer from the state enacting stronger rent regulations June 14.

New York City is experiencing an affordability crisis of epic proportions. The federal government defines a rent-burden hardship as tenants spending at least 30 percent of their income on rent, but more than half of rent-stabilized tenants pay more: Their median rent burden is 36 percent. The picture is far worse for hundreds of thousands of people below the poverty level (household income below $12,490 a year for a single person or $21,330 for a family of three). More than 98 percent of them are rent burdened, and 87 percent are “severely” rent burdened, meaning they spend at least half of their income on rent.

The numbers for working- poor and middle-income tenants are also desperate. Among households with incomes up to twice the poverty level, 90 percent are rent burdened, and 48 percent severely rent burdened. Among those whose incomes are two to four times the poverty level, 49 percent are rent burdened.

While the 2019 Housing Stability and Tenant Protection Act will close many of the loopholes landlords have been using to jack rents up for the last 20 years, it will not cause rents to go down from their current unaffordable levels.