NYC freezes rent for stabilized apartments

Posted On Thu, June 18, 2020 By

Posted On Thu, June 18, 2020 By In Policy

Photo by Goh Rhy Yan on Unsplash

The Rent Guidelines Board on Wednesday voted to freeze rents for one year for rent-regulated apartments, offering tenants temporary relief in the current economic recession caused by the coronavirus. The nine-member board approved a measure that freezes rent for one-year leases and for the first year of two-year leases, which can increase 1 percent during the second year.

The changes, which go into effect on October 1 and last until September 2021, affect leases for roughly one million rent-stabilized units across the city. Market-rate rentals are not affected by the decision.

During Wednesday’s virtual meeting, Leah Goodridge–a tenant representative on the board and a supervising attorney at Mobilization for Justice–said tenants, particularly Black tenants, are facing death and poverty from the coronavirus. In New York City, Black and Latino residents have faced roughly double the rate of death and infection caused by COVID-19 as white people.

“There is no doubt in our mind that a rent increase would destined thousands of tenants for evictions, for homelessness, and worse,” Goodridge said.

The board’s landlord representatives sought an increase of 2 percent on one-year leases and 5 percent on two- year leases. A report released in April by the board said the price index of operating costs for buildings with rent-stabilized units increased by 3.7 percent. From April 2020 until March 2021, the projected change in costs is 2.4 percent. The data in the report does not reflect the impact of COVID-19 on costs for owners, however.

The board also reported a decline in net operating income for owners of rent-stabilized apartments. Owner income dropped by 0.6 percent from 2017 to 2018, the first time NOI has declined since 2002-2003.

Joseph Strasburg, the president of the Rent Stabilization Association, the group that represents owners of rent-stabilized apartments, called the rent freeze “de Blasio pandemic politics.”

“De Blasio and his rent board puppets disregarded landlords’ increased operating costs – including a nearly 6% increase in property taxes alone – and, instead, authorized an unjustifiable rent freeze under the guise of pandemic relief,” Strasburg said in a statement to 6sqft.

“They ignored the fact that New Yorkers received government stimulus and enhanced unemployment benefits, and that hundreds of thousands of households are either already back to work or returning in the weeks ahead.”

Last summer, the board voted to approve a 1.5 percent increase on one-year leases and a 2.5 percent increase on two-year leases. The board last issued a rent freeze on one-year leases in 2015 and 2016, making Wednesday’s decision to freeze rents the third time doing so during Mayor Bill de Blasio’s tenure.

“2 million New Yorkers living in rent-stabilized apartments can breathe a little easier,” de Blasio tweeted on Wednesday. “Now we have to KEEP fighting for more renter relief to help New Yorkers keep a roof over their heads.”

Current protections for renters include a moratorium on residential and commercial evictions until August 20, a ban on fees for late-payments, and allowing the use of security deposits as rent.

Many renters are concerned about what happens following the freeze of evictions. Without any policy in place, any unpaid rent will still be due. “What happens on August 20?” Cuomo asked last month. “I can’t tell you what’s going to happen two or three months from now. Whatever happens, we will handle it at the time,” he said.

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