EAST VILLAGE — Hundreds of tenants erupted into cheers Monday night after the Rent Guidelines Board voted for a rent freeze for the first time in NYC history, a decision that will affect roughly 1 million rent-stabilized residents in the city.
The board voted against any increase on one-year leases, and voted for a 2 percent increase on two-year leases. Though this fell short of the rent rollback that many tenant advocates had lobbied for, the vote set a new precedent.
“I am so happy, I’m thrilled!” exclaimed Soledad Franco, a rent-stabilized tenant and member of CASA New Settlement, a nonprofit that works to maintain affordable housing in the Bronx.
The board based its decision on data, members said.
An RGB report found that operating costs for rent-stabilized buildings only went up 0.5 percent this year because of lower fuel costs and projected costs will rise 4.2 percent over the next year.
The board also found that the median income rent for regulated units was $1,200 a month and household income is $40,600 a year with a rent-to-income ratio of 36.4 percent. Economic experts typically recommend that rent comprise no more than 30 percent of a tenant’s income.
Based on that data, the zero percent increase for one-year leases was “appropriate,” said RGB Chairwoman Rachel D. Godsil.
“The 2 percent increase is warranted for two-year leases to protect owners should unanticipated increases in costs in the coming two years arise,” she said.
The board’s decision came a week after Albany passed an extension of the laws regulating rent-stabilized homes, which expired June 15.
The state’s decision had few modifications, disappointing housing advocates and Mayor Bill de Blasio, who lobbied to eliminate vacancy decontrol, which is the point at which landlords are allowed to remove an apartment from regulation. Instead, Albany raised the threshold to start charging market rate to $2,700 a month, up from $2,500 a month.
The state Legislature also charged the Rent Guidelines Board with determining the threshold for future vacancy decontrol. Beginning on the first of next year, the RGB will make yearly adjustments to that threshold.
De Blasio — who appointed all nine members of the board — called its decision "the right call" in a statement and praised the board for making their decision based on “hard data.”
"We know tenants have been forced to make painful choices that pitted ever-rising rent against necessities like groceries, childcare and medical bills," he said. "Today’s decision means relief."
He added that the administration remained "equally committed to working with building owners to help modernize their properties to lower their costs, and to ensuring our city’s affordable housing remains in good financial health."
Landlords, however, were not celebrating.
Jack Freund, executive vice president of the Rent Stabilization Association, which represents 25,000 property owners and agents, called the vote “a very bad decision” and “a very bad precedent."
“If rents don’t go up, then owners can’t maintain their buildings and the people who are going to lose from that [are] the very tenants that this board is trying to protect,” he said.
Freund added the decision could result in a loss of affordable housing, as buildings deteriorate from disrepair or are sold and converted to co-ops or condos.
“That effect is going to be loss in the city,” he said.
The vote affects leases renewed on or after Oct. 1.