Rental Board Member Proposes “Rent Freeze for Slumlords”

One member of New York’s Rent Guidelines Board is trying to get creative.

The board, which controls the rents in rent-stabilized apartments, typically doesn’t differentiate between types of units. It’s a diverse housing stock, including both older buildings and new construction, but allowable increases are the same across the city.

Last month, member Arpit Gupta submitted a proposal to set two numbers: a 2 percent increase for most landlords, and freeze in buildings with a high concentration of housing code violations.

Gupta’s proposal wasn’t voted on at the board’s last vote. It’s also one that neither landlord nor tenant groups are likely to support. But Gupta said he hopes it picks up support in the future. And it’s one attempt to find compromise in a debate where little is available, and advocates on either side are fierce.

“I’m hoping it’s a more sustainable system,” Gupta said.

Under Gupta’s proposal, the board would penalize buildings with high violation counts. Specifically, it would target buildings that are eligible for the city’s Alternative Enforcement Program. That means five hazardous violations per unit in buildings under 15 units, and three violations per unit for larger buildings.

Less than 3 percent of buildings with rent-stabilized units fit that criteria, Gupta wrote in his proposal.

“This small subset of the housing stock is disproportionately responsible for poor housing conditions,” he wrote.

Gupta argues that this proposal incentivizes building owners to invest in and maintain their buildings, rather than “extracting” equity.

“When the same percentage flows to every building regardless of condition, the system rewards owners who defer maintenance and penalizes those who don’t, because both pocket the same increase,” he wrote.

The obvious objection from the landlord side is that Gupta’s “rent freeze for slumlords” would only exacerbate the deterioration of building conditions. If landlords can’t maintain their buildings because they can’t afford to, Gupta’s proposal would further starve them of cash.

In response, he referred to an analysis the board did on net operating income in stabilized buildings. Although the average net operating income in buildings with a high concentration of code violations was less than that of buildings with lower concentrations, buildings with high violation counts still had positive net operating income on average.

Buildings with stabilized units, built pre-1974 and with high violations made a median of $225 per unit in net operating income per month. The Bronx had the lowest number for that sample among the boroughs, but it was still in the black, at a median of $220 per unit per month.

To Gupta, that means owners should be able to afford to keep up their buildings.

“These buildings produce a return for their owners while failing to deliver the housing conditions,” he wrote. “A percentage rent increase on top of that situation is unlikely to fix this problem.”

Net operating income crucially does not take debt service into account, nor major capital expenses, at least as the board typically measures it.

Tenant organizers are also unlikely to endorse Gupta’s proposal. They’ve been campaigning for a rent freeze, or alternatively a rent “rollback,” with the argument that tenants can’t afford any increase.

But Gupta said he hears a version of his idea from individual tenants all the time. They don’t trust their landlords to invest the rent increases in repairs or building maintenance. They want rent increases conditioned on building upkeep, Gupta said.

Gupta’s proposal didn’t get a full explanation at the board’s last vote. The landlord and tenant members traded proposals with neither getting enough votes. The board eventually agreed on a range of 0 to percent for rent increases.

Gupta, a professor of finance at New York University, was appointed by then-Mayor Eric Adams and isn’t part of Mayor Mamdani’s tenant-friendly voting block, but he also agreed to the 0-2 percent range.

He said he hopes the board’s chair will pick up the vote in the future and send it to a vote.