Rents at New York City rent-stabilized apartments will freeze for six months and then increase by 1.5 percent for the next six months, under the proposal adopted by the Rent Guidelines Board (RGB) on Wednesday. The unusual guidelines are meant to serve as a compromise between tenant activists who called for a rent freeze and landlords who wanted increases, as the city continues to recover from the coronavirus pandemic.
In a 5 to 4 vote, the nine-member panel voted to freeze existing rents for the first six months of one-year leases, followed by a rent hike of 1.5 percent for the next six months. Landlords can increase rent for two-year leases by 2.5 percent. The rental adjustments will take effect on October 1.
The changes affect the leases of tenants living in the city’s roughly one million rent-stabilized apartments. Market-rate rentals are not affected by the decision.
Board member Alex Schwartz said the guidelines reflect the city’s slow economic recovery in the aftermath of the pandemic while also recognizing landlords’ need for rental revenue to cover operating costs.
“Although the city’s recovery has begun, it’s lagging behind the rest of the country,” Schwartz said, who cited the city’s unemployment rate of 11 percent, which is double the national average, during Wednesday’s virtual meeting.
“This proposal is intended to provide additional time for economic recovery before any rent increase goes into effect,” he said.
Last year, the board voted to freeze rent for one-year leases and increase rents for the second year of two-year leases by 1 percent. In 2019, a 1.5 percent increase on one-year leases and a 2.5 percent increase on two-year leases were approved. Prior to 2020, the board last issued a rent freeze on one-year leases in 2015 and 2016.
Property owners and landlords have argued that with an increase in operating costs and a decrease in rent revenue, it’s difficult to maintain their buildings. During the meeting, two board members backed a proposal that would increase the rent on one-year leases by 2.75 percent and two-year leases by 5.75 percent.
According to data released by the board last month, the Price Index of Operating Costs (PIOC) for buildings with rent-stabilized apartments increased 3 percent this year, including an 18.8 percent jump in insurance costs and a 3.9 percent increase in taxes.
“We should be setting rent increases commensurate with increases in operating costs,” board member Robert Ehrlich said, as the New York Times reported.
President Joe Biden extended the federal moratorium on evictions this week by another month, now set to expire on July 30, with New York State’s moratorium ending in August. The state also opened applications for emergency rent relief this month; the state’s Office of Temporary and Disability Assistance received more than 100,000 applications, according to the Times.
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