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Landlords Calling for Up to 8 Percent Hike on Rent-Stabilized Units

By Amy Zimmer | April 20, 2017 3:14pm
 A row of apartment houses in Bushwick with rent stabilized apartments.
A row of apartment houses in Bushwick with rent stabilized apartments.
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DNAinfo/Gwynne Hogan

MANHATTAN — As operating costs rise, landlords are seeking big rent hikes following two years of a freeze on the city’s nearly 1 million rent stabilized apartments.

As the Rent Guidelines Board Thursday kicked off the months-long process of public hearings to determine this year’s rent increases, the group representing landlords called for a 4 percent increase on one-year leases and an 8 percent hike on two year leases, according to Jack Freund, of the Rent Stabilization Association.

It would be the largest increase in four years.

“We think the board has ignored increases in costs, and that has harmed property owners and the tenants who live in buildings that owners have had troubled maintaining,” he said, adding that taxes, water and sewer rates have risen during that same period. “We’ve now had three years of inadequate increase and we think it’s high time… this board provide some reasonable increase.”

The last two years, the Rent Guidelines Board — whose nine members were all appointed by Mayor Bill de Blasio — froze rents on one-year leases. De Blasio heralded the rent freezes, saying that declining fuel costs had offset other expenses and that the freeze provided more “security” for tenants making ends meet.

Meanwhile, the mayor raised rents over the past several years on several non-rent-stabilized properties he owns, in increments between $25 to $75, Politco reported.

The board — which will issue its preliminary vote for increases on April 25 and make its final decision on June 27 at Cooper Union — is expected to base its recommendation on its studies looking at factors like operating costs, income and affordability.

Last year, for instance, the board found that operating costs for rent stabilized buildings decreased 1.2 percent, while the year before they increased a mere 0.5 percent. Both years saw big drops in fuel costs, decreasing about 40 percent and 20 percent respectively, according to the board’s research.

This year paints a different picture: operating costs increased more than 6 percent, with fuel costs rising nearly 25 percent, the board found.

Freund was optimistic that the board will make a “reasonable decision” in light of these rising costs.

“If that doesn’t happen, then we’ll know the decision wasn’t based on facts or merits,” he said, “but another political decision in another year the mayor is running for reelection.”

The Rent Stabilization Association recently lost a lawsuit seeking to overturn last year’s rent freeze, challenging the board’s decision to take tenants’ rising costs into account in addition to buildings’ finances.

Many tenant advocates said that several years of previous increases had over-compensated landlords, so the last three years have provided tenants with some relief.

The board’s report on affordability notes that rent stabilized tenants face the highest financial burden, with the median rent-to-income ratio of more than 36 percent, which means that the majority of tenants aren’t able to afford their units based on HUD’s benchmark that affordability means paying no more than 30 percent of a household’s income on rent.