We Still Need a Rent Freeze in NYC

Posted by Katie Goldstein on July 28, 2014

Rents have become increasingly unaffordable in New York City. NYC has been in a housing crisis for decades. Defined as under 5 percent vacancy rate, a housing crisis  in NYC triggers an elaborate system of rent regulation.

Rent regulation is not a subsidy program, but a system in which rents are regulated and determined by an appointed Rent Guidelines Board. Under rent regulation, tenants receive a guaranteed lease renewal and can compel landlords to provide essential services, such as water, heat, and repairs.

Unlike public and subsidized housing, rent regulation costs the city, state, and federal government almost nothing to operate, beyond a small regulatory apparatus. Rent regulation is a virtually no-cost affordable housing strategy that houses millions of low- and moderate-income tenants in nearly a million rental units citywide.

Rent regulated housing has by and large disappeared in the rest of the country, and in New York City, where rent regulation remains a critical mainstay of affordable housing, landlords and the real estate industry continually mount attacks on the system, seeking to undermine it in favor of market-rate housing.

Tenants & Neighbors is a citywide membership organization of rent regulated tenants. Our members are low-income, moderate-income, seniors, youth, and immigrants, and live in all five boroughs. Though diverse in age, race, class, and ethnicity/nationality, they all tell the same story. They are trying to figure out how they can stay in their homes and communities, as their rent climbs to an ever-increasing proportion of their income. Many of them have seen their neighborhoods change rapidly as New York City has increasingly become a city for the wealthy, leaving them and their neighbors wondering just how much longer they will be able to call their city their home.

The attack on rent-regulated housing and New York City’s breakneck gentrification are inextricably linked. 

New York City has 8 million residents, approximately 2.5 million of whom are rent-stabilized tenants.  (An additional 32,000 live in “rent controlled” housing, a legacy program.)

Over the past 20 years, the city has lost over 100,000 rent regulated units to a process called vacancy decontrol: when the monthly rent reaches $2,500 and the unit becomes vacant, the unit becomes market-rate, and is no longer subject to rent regulation. Due to vacancy decontrol, there is great incentive for owners to increase rents to $2,500 and then to harass tenants to vacate. In neighborhoods that were once working class and middle class, rents in formerly regulated units are reaching $3–4,000 and more, far more than even middle-income residents can afford.

How are rents raised in rent-regulated apartments? Loopholes in the New York state rent laws allow landlords to raise rents upon vacancy and to add a portion of the costs of major capital improvements permanently onto the tenants’ rent. (Landlords frequently add more than they are legally permitted.)

Most importantly, rents are raised by the annual decisions of the Rent Guidelines Board (RGB), a nine-member mayorally-appointed board. The Rent Guidelines Board is tasked with looking at landlord’s costs, tenant’s incomes, and any other relevant data to determine what the increase should be. In the board’s 45-year history, the board has always voted to increase rents while the affordability crisis has gone from bad to worse.

Over the past six years, under the administration of Mayor Michael Bloomberg, the RGB raised one-year leases an average of 3.25 percent per year, and two-year leases an average of 6.3 percent. 

After new appointments by Mayor Bill De Blasio, pressure by many new City Council members, and massive organizing by the tenant movement, the RGB voted last month for the lowest increase in its history: 1 percent for one-year leases and 2.75 percent for two-year leases.

Though the increases were low, the mayor, the tenant movement, and many elected officials representing rent-stabilized tenants had called for a rent freeze, which would have helped to redress the substantial increases of the Bloomberg years that took place  in the depths of the Great Recession. There was enormous disappointment that the RGB did not vote for the rent freeze. 

Affordable housing policy shouldn't be just about building new affordable housing. It should be about making sure that the affordable housing resources we have don’t become so unaffordable that tenants get displaced. Currently, over 30 percent of rent-regulated tenants are paying half or more of their income toward rent.

If there isn’t a rent freeze next year, or the year after, approximately 750,000 tenants will likely be under threat of displacement in the next few years. This is our potential reality in a city where landlords have seen their profits rise for eight consecutive years; this year their profits rose 9.6 percent. Landlords were overcompensated for years with the previous administration, leading to the worst affordability crisis the city has ever seen. Through voting for an increase this year, the Rent Guidelines Board continued the trajectory of low- and moderate-income tenants subsidizing landlords’ profit. The Rent Guidelines Board must vote for a rent freeze next year; affordable and diverse neighborhoods in New York City depend on it.

(Photo of Jimmy McMillan, founder of the Rent Is Too High political party, by Matt Law, CC BY-NC-ND.)

About the author more »

Katie Goldstein is the executive director of Tenants and Neighbors, in New York City.

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