Rents To Increase By Roughly 3 Percent For Stabilized Units After Final Testy RGB Vote

In a final raucous June 21st hearing packed with pro-tenant voices, the Rent Guidelines Board voted that renters in the city’s one million stabilized units will see a 3 percent rent hike for one-year leases, while two year leases will see a 2.75 percent hike in the first year and a 3.2 percent hike in the second year.

The rate hikes were approved by a 5 to 4 margin. Mayor Eric Adams appoints all nine members of the RGB and may have been the only politician pleased with the outcome. “Finding the right balance is never easy, but I believe the board has done so this year,” Adams said, “as evidenced by affirmative votes from both tenant and public representatives.”

He added, “I want to thank the members of the Rent Guidelines Board for their critically important and extremely difficult work protecting tenants from unsustainable rent increases, while also ensuring small property owners have the necessary resources to maintain their buildings and preserve high-quality, affordable homes for New Yorkers.” He also noted his desire to build more affordable housing.

The RGB has faced a surge of opposition from frustrated tenants, which was on ample display the night of its final vote at Hunter College. Tenants claim such rent hikes will destroy their economic stability and capacity to remain in the city, especially as they face economic uncertainty and high inflation on everything from transportation to food. They point to studies that say that 40 percent of New Yorkers are already “rent burdened,” meaning they already pay more than 30 percent of their income in rent.

Landlords, their interests represented on the RGB by two members, have claimed that rent for stabilized units is too low to cover their expenses. The landlord reps on the RGB originally advocated for hikes as high as 7 percent back in May.

Board Chair Nestor Davidson began the June 21st meeting by saying that board members “have worked collegially and in good faith, even when disagreeing.”

This was belied by the fact that tenant members and owner members proceeded to lob rhetorical grenades at each other during their allotted speaking time. Tenants had packed Hunter College–holding a plethora of signs bearing calls for a rent freeze–and served as a sort of Greek chorus for the push-and-pull dynamics of arguing board members.

Owner members got the first go at the mic, and they came armed with data that they believe proved the need for a serious rent hike. Robert Ehrlich, citing what he said was expert input from NYU, said researchers had “analyzed volumes of data, and applied it to a formula that has been utilized for decades.” That formula is NOI, or Net Operating Income, and is defined by Investopedia as “a calculation used to analyze the profitability of income-generating real estate investments. NOI equals all revenue from the property, minus all reasonably necessary operating expenses.”

According to Ehlrich, however, NOI is “not profit.” According to him, operating expenses are so high that landlords cannot generate sufficient revenue to offset them, a sentiment echoed by fellow owner member Christina Smyth. She claims that landlords have not seen a “penny of profit,” which received serious jeers from the audience. She also called for lower property taxes, not to mention labeling rent subsidization writ large as the “largest unfunded subsidy in history.” In a snipe at tenants, she also speculated that wealthy tenants in rent-stabilized units were trying to hold onto their “pied-à-terres” and should perhaps be subjected to means-testing.

After these comments, the owner members’ proposal (called Proposal 12) of a 5 to 7 percent hike failed by a margin of 7-2.

Now it was the tenant members’ turn to have the floor, and they made sure to thank the constellation of tenant organizations, nonprofits, and advocacy groups that pushed for a rent freeze. Addressing the crowd, tenant member Adán Soltan said that “despite the wheels of injustice turning and constantly working against us,” he believed that agitation was crucial to sustaining “safe, affordable housing.”

The tenant members had also prepared reams of data to make their own points, which amounted to questioning why the owner members were even on the board and what their ulterior motives were. Unsurprisingly, the studies tenant member Soltan whipped out led to completely different deductions about landlord-tenant relations. “The math is not mathing,” Soltan quipped, after noting that NOI was up 50 percent since 1990 after adjusting for inflation. In a rejoinder to the owner members’ declaration that this was going towards expenses and not profit, Soltan said that “we still don’t have sufficient, reliable data or proof that landlords are using any or a portion of their incomes to reinvest in their buildings.”

He also gave a run-down of what he said data showed were the economic problems plaguing tenants: one-third of New Yorkers being rent-burdened, eviction rates rising by nearly 70 percent, and real wages being stagnant for two decades. He also submitted that landlords have received $2.5 billion from ERAP (the Emergency Rental Assistance Program) and LRAP (the Landlord Rental Assistance Program).

Genesis Aquino, the other tenant member, later said that these government programs meant tenants were subsidizing landlords and not the other way around. She also stated that “predatory equity investors” would be the property owners that benefitted most from a rent hike, and that landlords should “pay their fair share” in taxes.

The tenant members rent hike proposal (Proposal 14) laid out a rent freeze for one-year leases and a two percent hike for two-year leases. Despite the cheers from the assembled tenants, it also failed by a vote of 7-2.

Proposal 23, the compromise measure put forward by RGB chair Nestor Davidson and ultimately adopted by a vote of 5-4, was voted for by the tenant members (despite tenant member Aquino calling it a “disturbing vote” and pledging to fight on) and voted against by the owner members.

The hikes will apply to leases signed after October 1st of this year.