Rent freeze is looking more likely

A rent freeze for most rent-stabilized tenants is looking more likely after one of the two landlord representatives on the Rent Guidelines Board said Thursday that she can see the logic of no increase for one-year leases. Two-year leases, however, are another story.

Patti Stone, an attorney with Rosenberg & Estis, said she “can understand the position that it should be zero for a year.” But she said banning increases for two-year leases for rent-stabilized apartments, beginning in October 2020, would go too far.

“We don’t know what is going to happen in two years from now,” she said during a hearing Thursday. “Why would you ask us to basically punish landlords in advance?”

The nine-member board, which includes two landlord and two tenant representatives, convened for the second time via video to discuss its newly issued mortgage survey and reports on income and affordability. Members also reviewed data available on the impact of the coronavirus pandemic, including the 1,893 percent increase in unemployment claims in New York City (a total of 624,277 claims) between March 8 and April 18.

One of the board’s public members, Christian Gonzalez Rivera, said that the board shouldn’t increase the burden on tenants for at least the next year and freeze rents on those leases. He said two-year leases could be explored separately.

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“The people that are feeling the most pain are also people who have always felt economic pain. Lower-income New Yorkers, many of whom are immigrants, people of color,” he said. “The rent- stabilized tenants who were hurting before Covid are hurting even more now. And there were others who weren’t hurting before Covid, who are much more likely to be hurting now.”

Leah Goodridge, a supervising attorney with the Housing Project at Mobilization for Justice and one of the board’s tenant representatives, floated the idea of a rent-rollback, something that advocates have pushed for this year and last year. Though the board has frozen rents on one-year leases twice in its history, it has never rolled them back.

Board members questioned whether they could set the rent increases to zero for the first year of two-year leases and then a different percentage increase for the second.

David Reiss, the chairman, indicated he has sought legal advice on whether the board has any flexibility in setting the terms for two-year leases. When asked by landlord representative Scott Walsh if the board could set increases for the next six months and then reconvene to decide on the rest of the year, Andrew McLaughlin, the board’s executive director, said state law wouldn’t permit it.

The board is scheduled to hold a hearing next week and cast a preliminary vote on what rent increases should be permitted on the city’s nearly 1 million rent-stabilized apartments.

“We’re not having any conversations about how this will affect tenants long-term. We’re not hearing that from the state; we’re not hearing that from the federal government,” said Sheila Garcia, director of the Community Action for Safe Apartments and the second tenant representative.

“I hope that this board takes on this responsibility, that we see other people aren’t acting and that we have to act, and that we have no other choice but to act.”

One-year leases are common for rent-stabilized tenants, but some calculations have shown that over 40 years tenants would have saved a significant amount of money if they had two-year leases, based on past decisions of the Rent Guidelines Board. However, the discrepancy has been drastically reduced since the mid-1990s.

Write to Kathryn Brenzel at kathryn@therealdeal.com