Kris
June 18th, 2004, 11:04 AM
June 18, 2004
City Rent Board Approves Increases Up to 6.5 Percent
By DAVID W. CHEN
In a decision that satisfied neither tenants nor landlords, the New York City Rent Guidelines Board voted last night to raise rents by up to 6.5 percent on the city's one million rent stabilized apartments.
It was the second consecutive year that the board approved increases that tenant groups warned would be unduly burdensome, but that landlord advocates called woefully insufficient to defray rising costs.
By a 6 to 3 vote, the board authorized increases of 3 percent for one-year leases, and 6 percent for two-year leases for tenants who pay for their heat and hot water, and 3.5 percent and 6.5 percent for those who do not. That followed last year's increases of up to 7.5 percent, which were the biggest since 1989.
In separate votes, the board froze rents on residential hotels for one-year leases, the only kind offered. For lofts, the board approved increases of 2.5 percent for one-year leases, and 5.5 for two-year leases. For all the categories, the increases apply to leases that are renewed from Oct. 1 of this year through Sept. 30, 2005.
In most years, there is little drama inherent in the board's final vote, because it rarely deviates from a preliminary vote a month earlier. But this year was different, because the board opted during its preliminary vote on May 10 not to offer specific recommendations, but rather a range of increases - 3 percent to 5.5 percent for one-year leases on stabilized apartments, and 5.5 percent to 7.5 percent for two-year ones.
The tactic was the idea of Marvin Markus, the board's chairman, and it upset many tenants as well as some landlords. But at the end of the two-and-a-half-hour session last night at Cooper Union, Mr. Markus defended the approach.
"We ended up in the range and I think the process worked," Mr. Markus said.
The annual vote is watched closely because of the sheer numbers of those affected, and the fact that few places around the country have anything remotely similar to the city's rent-stabilized system.
Of the city's three million housing units, about two million are rentals. Of those, about one million are stabilized and subject to the rates set by the board.
Since it was established in 1968 to review rent rates annually for the city's stabilized units, the board has never authorized a rent decrease or freeze. During the high-inflation era of the late 1970's and early 80's, the board sometimes approved increases of up to 14 percent for two-year leases. But for most of the last decade, rents have gone up a few percentage points, in keeping with low inflation and, to a lesser degree, with annual surveys measuring landlord costs and incomes.
In 2002, for instance, the board ratified increases of 2 percent for one-year leases and 4 percent for two-year leases, even though the Price Index of Operating Costs, a summary of landlord expenses like utilities and labor, dropped for the first time. Last year, the board authorized increases that were dwarfed by a 16.9 percent jump in the index, the biggest since 1980.
This year, landlord costs grew at a much slower pace - 6.9 percent. Even so, landlords said they were concerned about the possible impact of the city's new lead paint law.
The law, which regulates the removal of lead-paint hazards, including dust, from apartments built before 1960, takes effect in August. City officials and landlord groups contended that the cost could be millions of dollars, but tenant groups said that figure was overblown.
If nothing else, the board's annual vote can always be counted on to attract a raucous and polarized audience. Even before a proposal was made to increase rent by up to 9 percent, the crowd became so unruly, shouting "Shame on you," and "We say no," that Mr. Markus ordered the board to recess for several minutes.
The 9 percent proposal failed, as did a proposal by a tenant representative to freeze rents. Then came the proposal suggested by Mr. Markus, which eventually passed.
Tenants said they found the increases outrageous. "I think it's really a reflection of the people that the mayor has appointed," said Michael McKee, associate director of Tenants and Neighbors, a statewide advocacy group. "They just don't get it: what real people go through to make ends meet in this city. They're conducting an auction, that's all this is."
Landlords were equally angry. "It's a disgrace when the process meant to stabilize housing is turned into a political circus," said Andrew Hoffman, president of Community Housing Improvement Program, a landlord group. "This is going to lead to widespread abandonment."
Copyright 2004 The New York Times Company
City Rent Board Approves Increases Up to 6.5 Percent
By DAVID W. CHEN
In a decision that satisfied neither tenants nor landlords, the New York City Rent Guidelines Board voted last night to raise rents by up to 6.5 percent on the city's one million rent stabilized apartments.
It was the second consecutive year that the board approved increases that tenant groups warned would be unduly burdensome, but that landlord advocates called woefully insufficient to defray rising costs.
By a 6 to 3 vote, the board authorized increases of 3 percent for one-year leases, and 6 percent for two-year leases for tenants who pay for their heat and hot water, and 3.5 percent and 6.5 percent for those who do not. That followed last year's increases of up to 7.5 percent, which were the biggest since 1989.
In separate votes, the board froze rents on residential hotels for one-year leases, the only kind offered. For lofts, the board approved increases of 2.5 percent for one-year leases, and 5.5 for two-year leases. For all the categories, the increases apply to leases that are renewed from Oct. 1 of this year through Sept. 30, 2005.
In most years, there is little drama inherent in the board's final vote, because it rarely deviates from a preliminary vote a month earlier. But this year was different, because the board opted during its preliminary vote on May 10 not to offer specific recommendations, but rather a range of increases - 3 percent to 5.5 percent for one-year leases on stabilized apartments, and 5.5 percent to 7.5 percent for two-year ones.
The tactic was the idea of Marvin Markus, the board's chairman, and it upset many tenants as well as some landlords. But at the end of the two-and-a-half-hour session last night at Cooper Union, Mr. Markus defended the approach.
"We ended up in the range and I think the process worked," Mr. Markus said.
The annual vote is watched closely because of the sheer numbers of those affected, and the fact that few places around the country have anything remotely similar to the city's rent-stabilized system.
Of the city's three million housing units, about two million are rentals. Of those, about one million are stabilized and subject to the rates set by the board.
Since it was established in 1968 to review rent rates annually for the city's stabilized units, the board has never authorized a rent decrease or freeze. During the high-inflation era of the late 1970's and early 80's, the board sometimes approved increases of up to 14 percent for two-year leases. But for most of the last decade, rents have gone up a few percentage points, in keeping with low inflation and, to a lesser degree, with annual surveys measuring landlord costs and incomes.
In 2002, for instance, the board ratified increases of 2 percent for one-year leases and 4 percent for two-year leases, even though the Price Index of Operating Costs, a summary of landlord expenses like utilities and labor, dropped for the first time. Last year, the board authorized increases that were dwarfed by a 16.9 percent jump in the index, the biggest since 1980.
This year, landlord costs grew at a much slower pace - 6.9 percent. Even so, landlords said they were concerned about the possible impact of the city's new lead paint law.
The law, which regulates the removal of lead-paint hazards, including dust, from apartments built before 1960, takes effect in August. City officials and landlord groups contended that the cost could be millions of dollars, but tenant groups said that figure was overblown.
If nothing else, the board's annual vote can always be counted on to attract a raucous and polarized audience. Even before a proposal was made to increase rent by up to 9 percent, the crowd became so unruly, shouting "Shame on you," and "We say no," that Mr. Markus ordered the board to recess for several minutes.
The 9 percent proposal failed, as did a proposal by a tenant representative to freeze rents. Then came the proposal suggested by Mr. Markus, which eventually passed.
Tenants said they found the increases outrageous. "I think it's really a reflection of the people that the mayor has appointed," said Michael McKee, associate director of Tenants and Neighbors, a statewide advocacy group. "They just don't get it: what real people go through to make ends meet in this city. They're conducting an auction, that's all this is."
Landlords were equally angry. "It's a disgrace when the process meant to stabilize housing is turned into a political circus," said Andrew Hoffman, president of Community Housing Improvement Program, a landlord group. "This is going to lead to widespread abandonment."
Copyright 2004 The New York Times Company