New York City’s contentious annual process to determine rent hikes on nearly one million apartments kicked off Thursday with a public meeting of the Rent Guidelines Board focused on the economics of operating rent-stabilized buildings — revealing a tale of two cities.
The board’s newly issued Income and Expense Report, covering 2022, shows a surge in landlord income — but only in Manhattan south of 96th Street on the East Side and 110th Street on the West Side. In that core Manhattan zone, net operating income increased 42.3% between 2021 and 2022, as the borough rebounded from the pandemic and landlords phased out rent concessions.
But the rest of the city showed signs of stress, with landlords’ net income rising just 0.3%. Older buildings as well as those where all apartments remain rent-regulated saw net income fall 4.5%, the report found, and in The Bronx buildings’ net income declined 14%.
The report classified nearly 10% of all buildings with rent-regulated apartments as “distressed,” i.e. spending more money than they are taking in — up from 9% last year.
The board will use these findings and those in subsequent research reports to be published this spring to decide on maximum allowable rent increases for the city’s rent-regulated buildings.
The board, made up of nine members appointed by the mayor, voted last year to cap rent increases for one-year leases at 3% and for two-year leases at 2.75% for the first year and 3.2% for the second year.
This year, the Rent Guidelines Board will be voting amid an intensifying apartment shortage, with a 1.4% vacancy rate, and persistent economic stress on New Yorkers. A majority of New York City households are rent burdened, paying more than 30% of their income on rent, according to a January report from Comptroller Brad Lander, and nearly 30% of low-income renters spend more than half of their income on housing.
Tenant advocates have called for a rent freeze. In a statement, the Legal Aid Society cited City Hall’s “refusal to implement the recently enacted reforms to CityFHEPS” rent vouchers, as well as a “widespread affordability crisis, inflation, the lack of protections for tenants, and Albany’s refusal to advance a comprehensive housing package.”
The statement added: “We call on the Rent Guidelines Board to commit to a rent freeze to help ensure that vulnerable, working class New Yorkers and their families can remain safely in their homes.”
Landlords, meanwhile, say that more and more properties are getting crushed by tougher state regulations passed in 2019 that sharply limit rent increases.
“The board needs to stop bowing to external pressures that lead to defunding buildings, and trust its own data,” said Jay Martin, executive director of the Community Housing Improvement Program (CHIP) which represents owners. “Older rent-stabilized buildings are at a breaking point, and without help, we will see massive losses in this housing supply.”
He pointed to the distress of older buildings in the boroughs. “No matter what the RGB’s reports say about the overall health of the rent-stabilized stock, the truth is that pre-’74 buildings outside of the core of Manhattan have been defunded to a point of severe distress,” he said.
One of two landlord representatives on the board, Christina Smyth, asked the board’s staff at the meeting if it would be possible to get more information about how pandemic rent aid, known as the Emergency Rental Assistance Program, temporarily bolstered landlords’ bottom lines. State figures show more than $2.8 billion in federal and state funds flowing to property owners in the five boroughs.
“I don’t think we can look at the 2021-’22 numbers without getting the ERAP numbers somehow,” said Smyth. “Because I believe it’s a one-time phenomenon. There were tenants who were chronically in arrears who got 15 months of rent paid that otherwise probably wouldn’t have gotten paid.”
The board will take testimony from the public at a series of hearings and meetings this spring. To make a comment to the board:
- Check the RGB page here to find out when meetings and hearings will take place.
- Submit written testimony by mail or through this online form.
- Show up to say your piece directly to the board, which you have a legal right to do. In the past, the board has typically given two minutes to each speaker, “alternating between owner and tenant representatives,” says the RGB website.
Pre-registering to speak will move you toward the front of the line of speakers, the RGB says. You can pre-register via the. “Public Notice” section of the RGB website. They will be published in the weeks before a hearing happens.