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In 'Impossible Decision,' Rent Guidelines Board Approves Increases Up To 5%

In a heated vote Tuesday evening following months of public meetings and hearings, New York City’s Rent Guidelines Board voted to allow landlords of rent-stabilized apartments to raise rents by up to 3.25% for one-year leases and 5% for two-year leases starting in October.

NYC's Rent Guidelines Board voted to allow rent increases for the city's more than 1 million rent-stabilized units.

The decision the board reached clears the way for the largest approved rent hike in nearly a decade. Amid the city's housing affordability crisis and the highest inflation in a generation, the RGB’s annual examination of rent-stabilized price hikes has come under significant pressure this year.

Tenant advocates have argued that renters can’t afford any price increases, while landlord advocates have said owners could be forced to sell, go bankrupt or let their buildings fall into disrepair unless they can raise rents.

But on Tuesday evening, at times yelling into microphones to be heard over the shouts of protestors, both tenant and landlord members of the RGB called the annual decision a flawed process creating a lose-lose scenario for tenants and landlords while absolving politicians of responsibility for housing affordability. 

“The cost of housing continues to go up, elected officials do little to nothing to stop it, and this board is tasked with making an impossible decision,” said Robert Ehrlich, partner at law firm Lazarus Karp Ehrlich McCourt and an owner's representative on the RGB. 

Christian Gonzalez-Rivera, a tenant member and the director of strategic policy initiatives at the Hunter College Brookdale Center for Healthy Aging, said that rent shouldn’t be the only option available for landlords struggling to cover their costs. 

"We need to end this system that depends solely on higher rents to properly maintain the housing stock," Gonzalez-Rivera said. "Our elected officials must step up to create abatements for maintenance or to reform a tax structure that unfairly burdens multifamily buildings."

Prior to Tuesday evening’s vote, the RGB was considering increases of between 2% and 4% for one-year leases, and between 4% and 6% for two-year leases. The gulf between positions of RGB members led the board to an impasse at its most recent meeting, arriving at a 5-4 vote to allow an increase.

NYC has more than 1 million rent-stabilized apartments, which account for approximately 44% of the city’s rental units and 28% of its overall housing stock, according to the 2021 Housing Vacancy Survey. Tenant advocates said in previous RGB hearings that any increase above 1.5% for two-year leases would be unacceptable, while multiple tenants testified that they cannot afford even the smallest increase at previous hearings. 

Speaking to Bisnow following the vote, landlord groups called the increases a step in the right direction, and also expressed concerns that owners would still struggle to cover rising costs — for everything from building maintenance and repairs to property taxes and water bills. But they also expressed frustration that elected officials are not doing more to solve NYC's housing crisis.

“The only way to keep the buildings maintained is, as those expenses go up, is to keep increasing the rents. If that continues to be unsustainable for renters, then we're going to have to lower the costs to operate the housing — and that requires the government to help us,” Community Housing Improvement Program Executive Director Jay Martin told Bisnow following the vote. “We're going to have to spend the rest of the year working with owners to figure out how to keep their buildings running, because they're still seeing double-digit costs increases.”  

Mayor Eric Adams and the New York City Council approved the city's annual budget earlier this month that allocated $5B in affordable housing funding over the next decade, a number advocates say doesn't go far enough to meet the city's needs. At the state level, lawmakers let the 421-a tax abatement, which gives developers incentives for developing mixed-income rental buildings, expire without a replacement.

Small landlords make up a minority of rent-stabilized landlords, according to a recent analysis of public data by nonprofit, and Small Property Owners of New York President Ann Korchak told Bisnow after the vote that her members felt frustrated. Property repairs necessary to maintain livable conditions for tenants will still be hard to complete for some landlords.

“Tenants are upset and angry, owners are frustrated because we've had years and years of escalating costs. We feel vulnerable,” Korchak said. “The increases don't go nearly far enough — my taxes alone went up 7% or 8%.”

But advocates on both sides agreed on one thing: NYC’s housing crisis isn’t going anywhere, and needs political will to address its impacts. Persistent housing affordability problems despite several years of low increases followed by complete freezes during the pandemic point to a problem that goes beyond rent-stabilized housing, Rent Stabilization Association Vice President of Communications Vito Signorile told Bisnow shortly before the vote.

“This year's deliberation process has been more in the spotlight than other years because you're starting to see both landlords and tenants struggling,” Signorile said. "I think this needs to serve as a wake-up call for our state and city elected officials. More can be done.”

CORRECTION, JUNE 22, 11 A.M. ET: A previous version of this article misstated Robert Ehrlich’s professional credentials. This story has been updated.