Tenants freak over rent board appointee. Landlords? Meh

Mayor names rent control skeptic, which critics call “extremely problematic”

New York /
Apr.April 05, 2022 08:45 AM

Mayor Eric Adams appoints Arpit Gupta, Smiyth Law’s Christina Smyth, CHIP Executive Director Jay Martin (LinkedIn, Wikipedia, Arpit Gupta.info)

Tenant advocates say the mayor’s appointment of NYU finance professor Arpit Gupta to the Rent Guidelines Board shifts power on the panel to landlords.

Landlords’ response: If only.

In a December Vox article, Gupta, a fellow at the free-market think tank Manhattan Institute, said he was a “little skeptical of rent control” because it only helps tenants in affected units, not renters overall.

For tenant advocates, Mayor Eric Adams’ move was like putting the Grinch in charge of Christmas.

Sheila Garcia, the board’s lone tenant representative, told City Limits that Gupta’s outlook is “extremely problematic” because board members must “manage what rent stabilization looks like and they can’t be skeptics.”

Gupta is one of the five at-large members, who largely determine board votes because the other four seats are evenly split between landlord and tenant representatives. But landlords say the assumption that he could sway the board toward them is overbaked.

“Arpit, he’s an economist,” said Jay Martin, executive director of the owner group Community Housing Improvement Program. “Who better than an economist to look at economic figures coming out of rent-stabilized buildings to determine whether or not the buildings warrant a rent increase?”

Tenant advocates prefer board members to base their votes on tenants’ ability to pay. The Rent Guidelines Board votes annually on how much landlords can raise rents on the city’s 900,000-plus rent-stabilized apartments.

Adams also picked real estate attorney Christina Smyth to replace an outgoing owner representative. One tenant seat was left vacant after Adams’ unnamed selection withdrew at the 11th hour.

Martin said he sees the backlash as tenant-side anxiety that after years of favorable votes for renters, Gupta could create “some sort of moderation.” The appointee did not respond to a request for comment.

Gupta replaces Cecilia Joza, a program director at the Mutual Housing Association of NYC, a nonprofit that works to create more affordable housing. During last year’s meeting, Joza voted no on all proposals, including an increase requested by owners, a freeze sought by tenants and the final resolution: zero increase for six months, then a 1.5 percent hike.

Throughout the last administration, owners criticized then-Mayor Bill de Blasio for influencing the board to favor tenants. In 2020, the panel froze rents for one year-leases, the third freeze in de Blasio’s tenure, after the mayor had repeatedly called for one.

“What he did, unlike any other mayor, is he came out publicly and said the results he wanted,” Martin said. “That was precedent-setting.”

However, Martin said he doesn’t see Gupta’s appointment as evidence that the new mayor is stacking the board for owners.

“I don’t think there’s anybody who would say that we, the small- to medium-sized operators, have this outsize political influence on the mayor’s agenda,” Martin said. “I would love to say that’s the case. I just don’t think it is.”

Rather, Martin said, it’s likely that there are fewer tenant attorneys and advocates available to take on a new role. Last month, legal service providers said they were “overwhelmed” by an influx of housing court cases after the eviction moratorium expired in January.

Regarding who would be named to the unfilled seat, a spokesperson for the mayor declined to comment to City Limits.

Last year, an open owner member was not chosen until the day of the preliminary vote, which establishes a range of rent increases from which the board chooses in June. The delay enraged landlords. Scott Walsh, whose seat Smyth fills, said the incoming member would be set up “for failure.”

The appointee, Robert Ehrlich, an attorney at Lazarus Karp, said he wasn’t familiar with owner-member proposals ahead of the meeting.

Adams, like de Blasio, has been vocal but not consistent on rent hikes. In February the mayor said he would back a new freeze on regulated leases, a 180-degree swing from his statement last summer that he would not support a freeze because of the impact it would have on small property owners, particularly Black and Brown ones, the New York Post reported.

Still, the mayor said he would only support a freeze if it jibes with the board’s data.

That could spell tough luck for owners. The board often diverges from its data-backed recommendations. Last year, it called for a 2 percent hike on one-year leases to keep pace with operating costs, then approved the half-year freeze.

Although this year’s recommendations are pending, the board released a report last week showing landlords’ profits had plummeted nearly 8 percent in 2020, the most in 17 years.

A separate report by the state’s Division of Homes and Community Renewal estimated owners would need to raise rents by 11.4 percent for the 2022-2023 leasing cycle to keep pace with costs. The board’s last double-digit increase was in 1981.

Amid the growing support for a rent hike, owners have called on the board to follow the numbers.

“The RGB must tune out the background noise and interference from the anti-owner politicians and, instead, base deliberations on their own data,” Joseph Strasburg, president of the Rent Stabilization Association, said in response to its latest report.




    Correction: This article previously stated that Arpit Gupta replaced Scott Walsh as an owner member. It has been updated to reflect that Christina Smyth replaced Walsh.  


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