NYC backs price hikes for 1 million rent-stabilised apartments

TENANTS in New York City’s (NYC) roughly 1 million rent-stabilised apartments will face increases of 3 per cent for one-year leases after a tense meeting filled with protestors.

More than 2 million New Yorkers living in stabilised units will have to contend with higher costs when renewing leases starting Oct 1 after a vote on Wednesday (Jun 21) by the city’s Rent Guidelines Board (RBG). For two-year leases, rents will increase by 2.75 per cent in the first year and an additional 3.2 per cent from the first year’s rent in the second year.

New York tenants are broadly encountering much higher rents. Costs for market-rate apartments have surged in recent years, with the median price on new Manhattan leases rising 9.9 per cent in May from a year earlier, according to appraiser Miller Samuel and brokerage Douglas Elliman Real Estate.

Landlords had lobbied the board to approve a large increase to cover rising expenses, while tenants and advocacy groups called for a “rent rollback”. Mayor Eric Adams, a landlord himself, had previously cautioned that substantial increases could stretch renters beyond what’s affordable while acknowledging that property owners face cost challenges.

“Finding the right balance is never easy, but I believe the board has done so this year – as evidenced by affirmative votes from both tenant and public representatives,” Adams said in a statement.

Earlier this year, the board’s staff calculated that rents would have to rise 5.3 per cent to 8.25 per cent for one-year leases and 6.6 per cent to 15.75 per cent for two-year leases to keep owners’ net operating income constant based on various formulae.

“The RBG ignored their own data and instead played to the intimidation of radical politicians and activists, depriving the largest providers of affordable housing of the revenue they need to keep up with skyrocketing costs,” said Joseph Strasburg, president of the Rent Stabilisation Association, which represents 25,000 property owners and managers.

Renters including Michael Iadarola, a tenant in Flatbush, Brooklyn, packed the meeting Wednesday to support efforts to fight the increases. Advocates have argued that landlords shouldn’t be guaranteed consistent income – let alone profits – that comes at the expense of straining already cash-strapped renters.

“Homes can be sanctuaries for all or investments for some,” Iadarola said.

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The city is facing broader affordable housing challenges driven by a lack of supply. There were 14,766 units of affordable housing produced in 2022 through new construction and preservation of existing housing, roughly half of the five-year average, the New York Housing Conference said in a report released this month. The group attributed some of the decline to staffing shortages that began before Adams took office. BLOOMBERG