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Landlords Look for Big Rent Increases

Bennett Baumer Jun 19

The Rent Guidelines Board (RGB) will vote to raise the rents in over one million rent stabilized apartments later today. That the RGB will raise rents in our very expensive city is a foregone conclusion – they raise the rents every year – the question is by how much.

The RGB, comprised of two landlord representatives, two tenant representatives and five so-called public members, are seriously considering double-digit rent increases, a minimum $60 charge on every apartment, a fuel surcharge on top of the guideline increases and an undetermined “longevity tax” on tenants with a tenure of eight years or more.

“We are facing the possibility of the highest rent hikes since the late 1970s and early 1980s, when we had 11 percent for one-year and 14 percent for two-year rent adjustments,” Michael McKee, treasure of the Tenants Political Action Committee said.

“Unfortunately, the five public members appointed by Mayor Bloomberg are sympathetic to landlords. They give lip service to the problems of tenants, but when crunch time comes, they show that their true sympathies are with the landlords.”

McKee computes that for every one percent rent increase on rent stabilized leases, $42 million flows from the pockets of already strapped rent stabilized tenants into landlord coffers. The average median income for rent stabilized households is $32,000 according to the 2005 New York City Housing and Vacancy Study by the RGB. One half of New Yorkers pay more than 30 percent of their income towards the rent and 28 percent give the landlord half of their paycheck in rent. Generally, housing is considered affordable when a tenant or homeowner pays no more than 30 percent of their income towards housing costs.

Now a decade into the building boom, New York City has seen the priciest real estate transaction in American history with the $5.4 billion sale of Stuy-Town/Peter Cooper Village (http://www.indypendent.org/2006/09/21/met-life-to-stuy-tenants-middle-class-my-ass/) and the astronomical profits to be made have even attracted big Wall Street private equity firms. But some how every June when the RGB final vote occurs, every New York City landlord all of the sudden is flat broke and just can’t turn a profit in the real estate market.

Though the tenant movement is proposing innovative and comprehensive rent reforms (http://www.indypendent.org/2008/04/11/the-de-stabilization-of-new-york-city/), the landlords are singing the same song.

“Our point on this issue is that somebody’s got to realize that you can’t keep raising rents because incomes are not going up at same rate as expenses,” Jack Freund, the vice president of the Rent Stabilization Association (RSA) told the Gotham Gazette. The RSA is a landlord trade association. “Unless there is some curtailment of taxes and water and sewer rates, unless the city does that, it’s basically going to drive out affordable housing.”

At the Brooklyn RGB public hearing on June 11, the landlord lobby paraded a throng of small landlords who hammered away that the cost of number-two oil (the most common fuel) is projected to increase 31.2 percent. But the public face of the RSA belies the concentrated wealth and ownership of the housing stock by large New York City landlords.

The final vote will take place today at the Great Hall in Cooper Union (7 E. 7th Street) in Manhattan at 5:30pm. Tenant groups will be holding a press conference before the hearing in front of Cooper Union.

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