Rent board approves 3 percent hike amid tenant-induced chaos

Landlords say hike won’t come close to covering costs; tenant advocates sought rent reduction

People disagreeing; Nye York apartment buildings
(Illustration by The Real Deal with Getty)

After tenant advocates stormed the stage during last month’s preliminary vote on rent increases for stabilized apartments, the Rent Guidelines Board implemented a ban on noisemakers and drums to prevent a similar derailment at the final vote Wednesday evening.  

Tenants appeared to take that prohibition as an invitation. 

Protesters in the crowd used their voices and more than a few whistles to drown out Chair Nestor Davidson with a wall of chants and boos that endured throughout most of the proceeding. 

Attempting — and frequently failing — to speak over the noise, the board approved a 3 percent increase on one-year leases for rent-stabilized apartments. The body voted to hike two-year leases by 2.75 percent in the first year of the lease, then by 3.2 percent of that adjusted rent for the second year of the lease.

Both measures passed by a 5-4 vote.

Separately, the body froze rents on stabilized hotels. Those adjustments take effect Oct. 1, 2023.

Owners came to the final vote Wednesday expecting both chaos and disappointment. 

“[The protests] have crossed the line into something more menacing and intimidating,” said Rent Stabilization Association spokesperson Michael Tobman.  

“Ordinarily, protests would be making a point for the cameras,” he added. “Now, their audience is on TikTok and Instagram and their protests have become more performative.”

Landlords had pushed for a rent hike as high as 8 percent to allow owners to keep up with rising operating costs. 

An April rent board report found operating expenses in rent-stabilized buildings jumped 8.1 percent from 2021 to 2022 and signaled owners would need an 8 percent increase to keep profits consistent when accounting for inflation. 

But a hike that high failed to make it to the negotiating table. 

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The board’s owner representatives floated a 5 percent hike on one-year leases, a longshot in a sea of 23 proposals that mostly set forth increases between 3 and 3.5 percent. 

The 5 percent bid lost in a 2-7 vote.

“It’s not the job of tenants to make landlords rich,” said tenant member Genesis Aquino to cheers from the audience.

That outburst subsided for a few moments as tenant member Adán Soltren took the mic to propose a rent freeze for one-year leases. Soltren introduced the measure at a glacial pace to allow tenants waiting outside time to enter the building.

The measure also failed by a 2-7 margin. 

On the heels of the vote, owners fear the 3 percent bump could exacerbate the distress that has already descended on rent-stabilized buildings. After the 2019 rent law severed most paths to raise rents, landlords have seen asset values plummet as expenses have risen. 

“With sky-high operating costs and taxes, inflationary pressures and ever-increasing punitive measures coming out of Albany, this is nothing more than a rent reduction by another name,” said Zachary Rothken, a Rosenberg & Estis attorney specializing in rent stabilization.

The moderate hike was landlords’ second blow of the week. Tuesday night, legislators approved a bill that would bar stabilized owners from combining units to set a new first rent — one of the few remaining avenues for owners to significantly boost revenue.

That bill is headed to the governor’s desk.

Before the board solidified the 3 percent hike, tenant member Soltren seized on his final statement to challenge owners’ claims of distress. 

Soltren called on Chair Davidson to subpoena the state housing agency so the board might have “less biased information about landlord expenses.”

History shows more data makes little difference.

For years, landlords have urged the board to follow its own figures when deciding rent adjustments. Wednesday night’s vote marked another failure to do so. 

“The RBG ignored their own data and instead played to the intimidation of radical politicians and activists, depriving the largest providers of affordable housing of the revenue they need to keep up with skyrocketing costs,” RSA President Joseph Strasburg said. 

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