Rent Stabilization Association sues board over rent freeze

Landlord group claims Rent Guidelines Board was unjustly swayed by mayor’s political agenda

TRD New York /
Jul.July 07, 2016 12:41 PM

The city’s rent-stabilized landlords are taking the Rent Guidelines Board to court after the board approved a rent freeze for the second year in a row.

The Rent Stabilization Association, a trade group that represents 25,000 landlords in the city, filed a lawsuit against the board in New York State Supreme Court Thursday, claiming the independent rent board was persuaded by Mayor Bill de Blasio’s political agenda and unlawfully took “tenant affordability” into consideration instead of the “economic condition of the residential real estate industry.”

“Nowhere does the law provide that the RGB is supposed to consider the subject of affordability when determining rent guidelines. Affordability is an issue that should be addressed not by the RGB, but through government-sponsored rent relief subsidies to tenants actually in need,” RSA president Joseph Strasburg said in a statement.

“A rent freeze was central to de Blasio’s campaign and since taking office in 2014, he has made the rent guidelines process and his rent freeze mantra part of his affordable housing campaign,” Strasburg added. “But affordability has never been the RGB’s mission because it is not allowed by law.”

Rent Guidelines Board executive director Andrew McLaughlin told The Real Deal that the board had not yet been served with a complaint, and declined to comment further.

The board voted 7-to-2 June 27 to freeze rents on one-year leases for the second year in a row and cap increases on two-year leases by 2 percent. The move occurred on the heels of a historic rent freeze the previous year.

According to the Rent Guidelines Board, low fuel costs and a mild winter led to landlords’ costs falling over the last year for only the second time since 1969. The board had actually called for a rent decrease of .8 percent.

The RSA fought back with a television commercial accusing de Blasio of pandering to New Yorkers against the city’s best interests. The association is looking to the courts to declare the freeze unconstitutional and direct the rent board to come up with new guidelines.

In June, the New York State Supreme Court ruled that the de Blasio administration arbitrarily awarded a water rebate to select property owners, and in doing so overturned the 2.1 percent rate increase the rebate was predicated on. The city said it would appeal that ruling.

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