When landlords implored the Rent Guidelines Board to raise rents this year so they could have a fighting chance against soaring expenses, tenants and their advocates called it a cop-out.
Owners, they said, would rather pass the cost onto tenants than apply for government-provided relief.
“Landlords should take advantage of government programs — not tenants,” City Council candidate Sarah Batchu said at a hearing before the final vote. Landlords say they hear that advice every year.
The program best tailored to address owners’ distress is a hardship provision overseen by the state housing agency, one which lets landlords raise rents if they can prove a cash crunch.
But that aid is an empty promise, records and statements provided by the agency show.
In the past five years, the Division of Homes and Community Renewal says it has received just 11 applications for the program.
Between January 2022 and April 2024, HCR made just five decisions, all of them denials, most because landlords had put the wrong dates on the application, according to records the agency provided in response to a landlord’s Freedom of Information Law request.
“So my question is, Does this program really even work?” said the owner.
The landlord, who owns a brownstone on the Upper West Side and requested anonymity, filed a hardship application this year after he “repeatedly heard elected officials say programs existed.”
His application quickly moved to a “final review” stage, he said. But when he rang HCR to request more information, he got nowhere.
“Does that mean I’ll get an answer this month?” he recalls asking.
“We don’t know,” was the answer.
“This year?” he asked.
“We don’t know.”
That was it.
“I finally got annoyed enough that I filed the FOIL requests,” the owner said.
The information hit his inbox just as he was walking to that last Rent Guidelines Board hearing.
“I was like, Wait, this program that you’re all shouting about, there’s only five decisions since 2022,” he said. “There is zero chance I’m going to get an answer in 2024 or 2025.”
An HCR spokesperson said the agency needs to review an owner’s income and expenses and wait out any tax challenges before making a decision, so “hardship applications can take time to resolve.”
But the bigger problem may be that the program isn’t built for most owners in distress.
To qualify, landlords must prove their operating expenses are at least 95 percent of their gross income, HCR’s spokesperson said. If the agency agrees, they are eligible for rent increases of up to 6 percent.
“You basically have to be at the point of bankruptcy before you can actually qualify,” said Jay Martin, who heads the landlord group Community Housing Improvement Program. “In our experience, the requirements are so stringent that the owner’s better option is to refinance their mortgage with the bank.”
Refinancing is a tough task given the rise in interest rates, the disappearance or retreat of major lenders to rent-stabilized owners, and the properties’ declining values.
Up against those challenges, the Upper West Side owner said his best bet is to wait and hope his hardship application is approved.
“When you’re bleeding, you want to take anything you can get,” he said.
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