NYC Rent Rise: What You Need to Know

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New Yorkers who live in rent-stabilized apartments will soon pay higher rents — 3.25% more on one-year leases and 5% more on two-year leases — the biggest increase in nearly of a decade.

Despite calls from tenants for a rent freeze or even a reduction, on Tuesday the New York City Rent Guidelines Board voted 5-4 to raise rents. The increase comes as soaring rents have concerned New Yorkers for months. In May, the median rent in Manhattan hit $4,000, a record high.

Mayor Eric Adams called the system “broken” in a statement. He said: ‘The decision taken by the Rent Guidelines Board today will unfortunately be a burden on tenants at this difficult time – and that is disappointing.’

“At the same time, small landlords risk bankruptcy due to years of no increases at all, endangering building owners of modest means while threatening the quality of life of tenants who deserve to live in modern buildings. and well-maintained,” said Adams.

What is rent stabilization?

The New York City Rent Stabilization System was enacted in 1969 in response to dramatic rent increases. Rent-stabilized apartments are subject to limitations on rent increases, as well as other protections for tenants.

“The stabilization of rents brings real added value to households who are lucky enough to obtain stabilized housing. They have longer occupancy times and less housing instability, especially in more expensive neighborhoods,” said Matt Murphy, executive director of New York University’s Furman Center. “But the system has the potential to inflict negative consequences on the wider rental market in terms of housing quality and supply.”

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Andrea Shapiro, director of program and advocacy for the Met Council on Housing, a tenants’ rights organisation, said the recent vote defeats the purpose of rent stabilization. “The whole point of rent stabilization is that New York City is in a housing emergency, and we need this advice to truly regulate the market, because landlords can get away with huge rent increases,” Ms. Shapiro said.

How many people will be affected?

More than two million tenants will be affected by the increases. The council makes decisions that affect approximately one million rent-stabilized units.

How rare is an increase of this size?

During Bill de Blasio’s mayoralty, the highest council-approved increases were 1.5% for one-year leases and 2.75% for two-year leases. But during Michael R. Bloomberg’s tenure as mayor, there was a much higher increase in 2013: 4% for one-year leases and 7.75% for two-year leases.

Who will feel the impact of this decision the most?

Low-income New Yorkers will be the hardest hit by this increase, which will apply to leases beginning on or after October 1.

“New Yorkers who live in rent-stabilized housing have lower median incomes and pay lower median rent than those who live in unregulated apartments,” Murphy said. “More than half of tenants in New York City are rent burdened, so even small rent increases would exacerbate the effects of the rent burden.”

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Adán Soltren, a tenant representative on the board who voted against the rent increase, said the increase would be “devastating for low-income and moderate-income New Yorkers, as well as New Yorkers predominantly black and brown”.

“It’s a significant amount of money for people on fixed incomes and people struggling during a pandemic that isn’t over,” said Mr. Soltren, a lawyer at the Legal Aid Society.

For those who depend on rent stabilization to live in New York, this increase will make financial choices even more difficult. “There are tenants living in relatively affordable rent-stabilized apartments who are really relying on limited rent increases to get by,” Ms. Shapiro added. “They haven’t gotten big raises at work and they’re seeing huge inflation at the grocery store. This will force people to choose between food, rent or medicine.

What is the Rent Guidelines Board and who are its members?

The Rent Guidelines Board has nine members in total, all appointed by Mr. Adams. Two represent tenants, two represent landlords and the other five represent the general public. The board sets rent adjustments for residential units subject to the New York City rent stabilization law.

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If the rent increases, is it still considered a rent-stabilized apartment?

Yes.

“Technically, these apartments will remain subject to rent stabilization, which, in addition to having rent increases set by the Rent Guidelines Board, means that tenants have certain protections against eviction, the right renewal of leases, family rights to succeed the lease, and more,” said Sophie Cohen, an attorney with the New York Legal Assistance Group’s Tenant Rights Unit. “These will be stabilized, but when a rent-stabilized apartment sees annual rent increases of this magnitude, it’s no longer about affordability and sustainability for tenants.”

How does this increase relate to recent spikes in the cost of housing in the United States?

“Rising rent stabilized and market rate rents are generally unrelated – rents do not rise or fall in rent stabilized units based on what happens in market rate units,” said Mr. Murphy. “If anything, historically, market-rate rent increases might have tempered rent-stabilized portfolio increases.”

But the common denominator right now is inflation, Murphy said. “In order to keep net operating income constant in real terms, which is what the rent guidelines board is aiming for, rents need to adjust.”

The post New York City Rent Rise: What You Need to Know appeared first on The New York Times.

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