De Blasio official thinks rent board will be kinder to landlords

HPD head predicts increases to compensate for new rent law

New York /
Oct.October 03, 2019 07:00 AM
From left: REBNY President James Whelan, Housing Preservation and Development Commissioner Louise Carroll and State Senator and Housing Committee Chair Brian Kavanagh (Credit: Facebook, Twitter, Getty Images, iStock)

From left: REBNY President James Whelan, Housing Preservation and Development Commissioner Louise Carroll and State Senator and Housing Committee Chair Brian Kavanagh (Credit: Facebook, Twitter, Getty Images, iStock)

A de Blasio administration housing official seemed to speculate Wednesday that the city will approve larger rent increases than in the past to compensate for rent-limiting changes to state law.

Louise Carroll, commissioner of the city’s Department of Housing Preservation and Development, said small rent increases allowed by the city’s Rent Guidelines Board — which even froze regulated rents for two consecutive years — aren’t an indication of how it will act going forward.

“It’s not a guessing game when they issue these increases,” she said at a housing forum hosted by Crain’s in Midtown. “I have faith that the people on the RGB will do what is appropriate.”

From the context of the discussion, her clear implication was that the board would approve higher rent hikes than in the past because other ways for landlords to raise rents were choked off by the rent law Albany enacted in June.

She stressed that she isn’t on the board and wouldn’t explicitly say it will approve rent hikes higher than the roughly 2% average of recent years. Still, the comments from a top administration housing official were telling, given that the mayor appoints the rent board’s nine members.

This year, the board approved a 1.5 percent increase for one-year lease renewals and a 2.5 percent hike for two-year leases for both rent-stabilized apartments and lofts, with a 39 percent permissible increase for decontrolled units.

The Housing Stability and Tenant Protection Act of 2019 limits the ways in which landlords can bump up rents in regulated apartments, which could put extra pressure on the city’s board. Though owners can still hike rents by renovating their buildings — through the Major Capital Improvement and Individual Apartment Improvement programs — the law curbed those significantly.

Wednesday’s event largely focused on changes to the state’s rent stabilization law.

Sen. Brian Kavanagh said that when the legislature considered eliminating the Individual Apartment Improvement program, the real estate industry warned that owners would severely limit renovations. The senator reframed the issue, saying that limiting what a landlord can spend allows tenants to stay in their neighborhood. While the apartments might not undergo comprehensive renovations, the allowed increases were enough to keep apartments “habitable” and “basically decent.”

“The question is: Is that really such a terrible outcome?” he said.

Real Estate Board of New York President James Whelan disagreed. He said changes to the IAI and MCI programs were “too drastic to the point that you have to question their utility going forward.” He said the new law doesn’t properly address the city’s affordability crisis.

“Admittedly rent growth will slow, but it won’t put those families in a better position to pay the rent,” he said, adding that the law will not create a single unit of affordable housing.


Related Articles

arrow_forward_ios
Asbury Park, New Jersey (iStock)
Asbury Park residents choose less stringent rent control
Asbury Park residents choose less stringent rent control
Assembly member Pamela Hunter and Sen. Julia Salazar (Facebook, Getty)
Next up: Coalition pushes for good cause eviction
Next up: Coalition pushes for good cause eviction
All in all, the $212 billion budget is a mixed bag for the industry. (Getty/Illustration by Kevin Rebong for The Real Deal)
Real estate’s wins and losses in new state budget
Real estate’s wins and losses in new state budget
Seth Hoy of Manhattan Legal Services with with 74 Post Avenue. (Google Maps, LinkedIn)
Inwood tenants claim landlord using blaze to hike rents
Inwood tenants claim landlord using blaze to hike rents
Vincent Viola and 2 Pierrepont Street (Getty, Google Maps)
Lawsuit accusing Vincent Viola of violating rent laws can proceed
Lawsuit accusing Vincent Viola of violating rent laws can proceed
Gotham's Joel Pickett and Gotham West. (Gotham)
Gotham faces rent overcharge lawsuit in Hell’s Kitchen
Gotham faces rent overcharge lawsuit in Hell’s Kitchen
In an unintended consequence of New York’s 2019 rent-stabilization law, landlords are leaving cheap units off the market. (Getty)
Why affordable housing sits empty
Why affordable housing sits empty
A Manhattan judge dismissed a lawsuit from five New York City landlords to overturn the rent reforms. (Getty)
Judge says landlords have no constitutional right to “unregulated market”
Judge says landlords have no constitutional right to “unregulated market”
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...