Are the members of the City’s Rent Guidelines Board aware that inflation is now at 8.6%? If so, what were they thinking on Tuesday by limiting rent increases to just 3.25% for one-year leases and 5% for two-year leases?
Indeed, the ceilings – which apply to the city’s 1 million rent-stabilized apartments – are so out of step with real market conditions that they are likely to significantly harm tenants. and owners.
The RGB’s five-member majority might have thought they had struck the right balance: tenant activists wanted lower ceilings, while landlords sought higher ones. But it was a Politics calculation, not the one who took into consideration the economic fallout.
After all, how are landlords supposed to make ends meet when their costs are rising faster than rental income, thanks to such limits? And it comes after the de Blasio years when rents were effectively frozen or limited by minimal rent hikes, and after months during the pandemic when landlords were left without any rental income, thanks to the eviction moratorium.
Yes, big business owners might be able to weather this latest blow (but don’t count on them pouring big bucks into new affordable housing, especially after Albany let a major tax relief to stimulate such housing development).
But mom-and-pop owners won’t. They will struggle, hoping for relief – in the meantime, perhaps, forgoing repairs or upgrades. It’s reminiscent of the 70s and 80s, when owners let buildings decay or even abandoned them.
Progressives had ridiculously sought After the rent is freezing and now complaining that the hikes are too high. Never mind the generous tenant COVID unemployment benefits and stimulus checks and higher wages being paid now given the tight labor market. And that many rent-regulated tenants are actually quite wealthy, because there is no means test for these apartments.
Even Mayor Eric Adams, who bragged about having “succeeded” in bringing down the proposed increases, nevertheless expressed his “disappointment” that the rent hike “will be a burden on tenants”, he said. lamented.
At least Adams also acknowledged the difficulties faced by family landlords and the likely consequences for tenants: “Small landlords risk bankruptcy due to years without any raises”, threatening “the quality of life of tenants who deserve to live in modern, well-maintained buildings.This system is broken.
He is right! Gotham has had rent controls for 80 years, but there has never been a housing shortage during that time. Fair rents, on the other hand, encourage housing development and ensure sufficient income to properly maintain buildings. Alas, in 2019 Albany reversed even modest attempts to phase out some high-end, rent-stabilized apartments.
Don’t expect this faulty system to be fixed anytime soon.
New York Post