For years, landlords have urged the Rent Guidelines Board to follow its own data in setting annual rent increases for stabilized units.
And for years, the board has flouted that request, ignoring its annual recommendations in favor of lesser hikes or all-out freezes, which aligned with politicians’ requests.
Two data wonks — and the mayor who appointed them to the board — could change that pattern.
Mayor Eric Adams’ naming of two public members has owners hoping for a vote that actually follows the numbers, meaning a rent bump to match their rising costs.
Last month Adams added law professor Nestor Davidson as chair, expressing confidence that Davidson would “[root] his decisions in facts and data.”
Then, Monday, Adams appointed Doug Apple, a consultant and veteran of city housing agencies, as a public member. He also tapped affordable housing nonprofit head Genesis Aquino to replace a tenant member. (The board has two industry representatives, two tenant representatives and five public members, all mayoral appointees with overlapping terms.)
Apple, in a statement released by the mayor’s office, twice committed to data-informed decision-making.
“I am looking forward to working closely with Chair Davidson and the entire board as we closely review the data,” Apple said. “I have always used data to make and assess policy decisions and will do the same here.”
“I think that’s promising,” said Jay Martin, executive director of landlord group Community Housing Improvement Program.
“Apple is definitely someone who comes from agencies that have to make the math work,” he added. “And certainly, the new chair has also signaled that’s necessary.”
The board has yet to release its annual report on last year’s operating costs and its recommendations for rent adjustments.
But owners believe the findings will reveal the hit inflation has hammered rent-stabilized owners. The consumer price index peaked at 9.1 percent last June and averaged 7.7 percent from April 2022 through February 2023 — 11 of the 12 months the report will track.
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Landlords may also see the rising cost of debt service better reflected in this year’s recommendations. The board uses three formulas to keep net operating income constant, one of which weights debt service — which has risen with interest rates — more heavily than the others. It is possible that five of the nine members could seize on that formula as the basis for a rent increase.
Already, a rent board report released last month showed owners’ net operating income plummeted a record 9.1 percent in 2021. The metric, as calculated by the board, is not equivalent to profit, as it omits taxes, mortgage payments and capital expenditures. Landlords say many rent-stabilized buildings are actually losing money.
“We think the data will clearly show that properties are being defunded and proportional rent adjustments are needed,” Martin said.