The city approves rent increases for rent-regulated apartments

Posted On Wed, June 28, 2017 By

Posted On Wed, June 28, 2017 By In Policy, real estate trends

Tenants leasing a rent-regulated apartment, buildings built before 1974 with six or more units, will soon see their rents rise for the first time in years. New York City’s Rent Guidelines Board voted to increase rent for regulated apartments on Tuesday, allowing an increase of 1.25 percent for one-year leases and 2 percent on two-year leases, set to begin Oct. 1. As the New York Times reported, the board, which had voted two years in a row to freeze rents, found that a 6.2 percent increase in operating costs for landlords in 2016 warranted this year’s increase.

The board’s 7-2 vote, affects roughly 1.6 million New Yorkers in the city’s rent-stabilized apartments. While the board had previously taken into account how tough the market can be on renters, a study released found that the percentage of income spent on rent actually declined to its lowest level in five years. Census data shows that in 2015, 32 percent of New Yorkers’ income went to rent and utilities, compared with 32.7 percent in 2014. On the other hand, costs for landlords jumped 6.2 percent and property taxes rose 7.8 percent.

While tenants are angry, landlords are also not happy with the increase, which they say is not big enough. The Rent Stabilization Association, a group that represents the city’s landlords, proposed a 4 percent increase on one year-leases and a 6 percent increase for two-year leases to counter rising operating costs. The president of the association, Jack Freund, said the board is politically motivated, as all nine members were appointed by Mayor de Blasio. While running for office, de Blasio campaigned on rent-freezes but has remained largely absent from this year’s debate.

Freund told the Times: “It was expected because this is a fixed process. Unfortunately what we saw is a fourth year of totally inadequate rent increases,” Freund said. “What’s happening is that rental housing in the city is being strangled. The economic lifeline of the city is being choked, and the mayor and this board don’t realize that it costs money to run housing.”

After the vote, a spokesperson for de Blasio, Melissa Grace, released a statement that said: “Taken together, the past four years have had the lowest guidelines in history–including the first two freezes ever–and a court ruling affirming the importance of tenant affordability in this equation.”

[Via NY Times]

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