New York City’s rent-stabilised tenants face third year of price hikes

TENANTS in New York City’s one million rent-stabilised apartments are on track to face the third year of rent increases in a row as renters and landlords grapple with rising costs.

The city’s Rent Guidelines Board on Tuesday (Apr 30) endorsed potential rent hikes of 2 to 4.5 per cent for one-year leases and 4 to 6.5 per cent for two-year leases. Price increases in those ranges are likely to be approved at a final vote in June.

New York City’s rent-stabilised apartment market has come under pressure in recent years. Landlords argue that the rental income from stabilised units has failed to keep up with steep inflation and higher costs as interest rates soared. A 2019 rent law aimed at protecting tenants has also made the situation tougher for property owners.

The challenges have started to raise concerns at banks including New York Community Bancorp. The Hicksville, New York-based company and Signature Bank, which failed last year, were major lenders to the market.

The Community Housing Improvement Program, which represents property owners, said the ranges approved on Tuesday would not go far enough to fund improvements for rent-stabilised buildings. 

“A guideline near the highest part of the range is necessary in order to cause the least amount of damage,” executive director Jay Martin said.  

At the same time, residents face a housing shortage that has pushed rents up in recent years. Citywide, market-rate asking rents climbed 2.1 per cent in February from a year earlier, according to StreetEasy. Rent-stabilised tenant advocates have been pushing for a rent freeze, arguing that it’s not the responsibility of tenants to help owners turn a profit.

The board has approved rent increases in recent years, a shift from when Mayor Bill de Blasio was in office. If approved this year, rent hikes for the roughly two million New Yorkers who live in stabilised units would take effect for lease renewals that begin Oct 1 or later.

The Legal Aid Society, a tenant advocacy group, called on the board to reconsider its plans to raise rents. 

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“We urge the board to listen to the cries of tenants and take into account how any rent increase will inevitably lead to higher rates of eviction, displacement and homelessness for the more than two million New Yorkers who reside in a rent-stabilised dwelling,” the group said. BLOOMBERG