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Tenants Demand Rent Rollback, De Blasio’s RGB Says ‘Meh’

Steven Wishnia May 19

The South Bronx met the liberal policy wonks of the de Blasio administration on April 29, and the Bronx lost.

As more than 200 people chanting “Rent Rollback” filled an auditorium at City University Graduate Center, most in community-group contingents from the Bronx and upper Manhattan, the city Rent Guidelines Board rejected a proposal to recommend that rents be reduced by up to 4 percent for the city’s 1 million rent-stabilized apartments next year, by a 7-2 vote. Instead, it voted 5-4 to recommend allowing increases of zero to 2 percent for a one-year lease and 0.5 to 3.5 percent for two years. For hotels, it recommended a rent freeze.

The vote indicates that the RGB is leaning toward setting a small increase when it votes on the final guidelines for next year on June 24, rather than the rent freeze Bill de Blasio promised while running for mayor in 2013. The guidelines will cover leases for apartments or lofts renewed on or after October 1.

“De Blasio said he was going to do something. I don’t see it,” Bronx resident Joseph Cepeda, 52, told board chair Rachel Godsil after the vote. “My parents got hit with three MCIs last year. You think that’s right? It’s a $200 increase. They’re 90 and 86, they live on a fixed income.”

“I know that’s real money,” Godsil answered softly before leaving.

The vote was “extremely disappointing,” said Fitzroy Christian of Community Action for Safe Apartments, an organization based in the working-class neighborhoods north of Yankee Stadium. “Even though we did not expect the public members to vote for a rollback, we thought their numbers would have been a lot more realistic about the economic conditions New Yorkers face.”

The South Bronx has among the highest concentrations of rent-stabilized apartments in the city. Rents are relatively low, but still high when compared to people’s incomes — $1,100 a month isn’t cheap when you make $520 a week. Landlords there also commonly use major capital improvements to raise rents on apartments where people aren’t moving.

Tenant groups had pushed for a rent rollback on the grounds that under the Bloomberg administration, the RGB had regularly granted increases far larger than were needed to keep landlords solvent. Last year, according to board figures, the “projected increase of owners’ costs,” its index to predict prices for running a building, went up by only 0.5 percent, the lowest in the last decade.

“While last year’s rent increase was one of the smallest in New York’s history, it wasn’t enough to stop the loss of rent-stabilized housing that is truly affordable,” the Metropolitan Council on Housing said in a statement before the meeting. “A rent rollback is the only action that is strong enough to bring relief to the over 1 million families that rely on strong rent regulations.”

Godsil told the crowd that she voted against the rent rollback because stability “is crucial for the housing stock of New York,” and that it is “just not the case” that “all owners are rolling in money.” The five public members then all voted for her proposal without saying a word. The board’s two tenant representatives voted no because they thought it was too high. The two landlord representatives also voted no, after the board nixed their proposal for higher increases. (Owner representative Sara Williams Willard had argued that the board’s cost projections weren’t reliable because they had been diminished by a dramatic drop in fuel prices last year).

That lockstep vote was uncomfortably reminiscent of the Bloomberg era for tenant member Sheila Garcia, also a Bronx resident, who called the vote “completely insane.”

“It’s business as usual continued,” she said. “We saw the public members vote together for really unwarranted increases.”

“Owners have been overcompensated, based on actual income and expense numbers, for the past 25 years,” Harvey Epstein, the board’s other tenant representative, said earlier, in arguing for a rent rollback. He rattled off a string of statistics. Board figures show landlords’ net operating income went up 3.4 percent last year, the ninth year in a row it increased, and it’s risen by 34 percent in the last 20 years. “Not one property owner has applied for a hardship increase,” he said.

Meanwhile, he continued, tenants’ median rent burden was the highest ever recorded, at 33.8 percent of income, according to the Census Bureau’s Housing and Vacancy Survey from last year. That means that more than half of New York City’s rent-stabilized tenants are spending more than one-third of their income on rent. There are 60,000 people living in homeless shelters, a post-Depression record, and 23,000 households were evicted last year. The ultimate issue, he said, is “who is this New York going to be for?”

Mayor de Blasio based much of his 2013 campaign on that question, and tenant advocates believed that the RGB would be willing to at least freeze rents once the new mayor had replaced all the Bloomberg holdovers on it. That so far hasn’t happened. Why? Helen Schaub, a new public member many tenant advocates expected to be strongly sympathetic because of her affiliation with Local 1199SEIU — the health care workers union that has put its organizational muscle behind the campaign to strengthen the state’s rent laws before they expire in June — said she wouldn’t comment. “Real estate has a lot of money, a lot of pressure,” Garcia said. “I don’t think [the vote] was based on the data at all.”

The mayor may have won election with the votes of New Yorkers irate and frustrated that “the rent is too damn high,” but he would also like to govern without having to fight the wrath of the city’s power elite, and his plans to build 80,000 new units of “affordable” housing depend on the real-estate industry building enough luxury apartments for the city to negotiate or mandate that lower-cost units trickle down.

This article originally appeared in Tenant/Inquilino.

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