Cost to operate rentals fell in last 12 months: Rent Guidelines Board

Landlords dispute finding, which could justify another rent freeze

TRD New York /
Apr.April 15, 2016 08:46 AM

Low fuel costs and a mild winter meant landlords’ costs actually fell over the last 12 months, for only the second time since 1969, at least according to the city’s Rent Guidelines Board.

The seemingly encouraging estimate, announced Thursday, could be a prelude to the board once again ordering landlords not to increase rent on stabilized tenants.

Building owners and their representatives are pushing back, saying costs are actually rising, and criticizing RGB’s methods.

The Rent Guidelines Board said its price index showed operating costs had fallen 1.2 percent since last year’s report, primarily because of an estimated 41 percent drop in heating costs, the Wall Street Journal reported.

That drop, the board said, counteracted a 7.5 percent rise in taxes on landlords over the same period, as well as a 3.2 percent increase in labor costs.

In these circumstances, RGB’s models call for a rent decrease of 0.8 percent or more for one-year stabilized leases.

Forest City Ratner’s Scott Walsh, representing building owners at the board’s meeting, said costs were actually up about 3.5 percent, the Journal reported.

“If costs went down 1.2 percent, it would have been in the conference calls,” he said, referring to the earnings calls of publicly-traded real estate firms focused on rentals.

Aspects of RGB’s estimation process are marred by data inconsistencies, the Journal reported. For example, income from commercial units and market-rate apartments is sometimes included with income from stabilized units. [WSJ]Ariel Stulberg

Related Articles

Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)

New NYC rent law “beginning to shut down investment”

Some landlords say they plan to close the door to vacant apartments and wait for the laws to change (Credit: iStock)

Creative ways NYC landlords are getting around the new rent rules

Jay Martin, James Whelan and Joe Strasburg

Rent-pocalypse 2.0: Real estate industry reacts to tenant demands

Cases to challenge tenant residency have declined since June (Credit: iStock)

More rent-law fallout: Landlords back off “absentee” tenants

10 Hanover Square (Credit: Google Maps)

FiDi landlord violated rent stabilization regs for years: lawsuit

Here’s why landlords don’t hate California’s rent control bill

Cea Weaver (Credit: Elijah Stevens)

The tenant movement’s giant killer