So Much for Rent ‘Stabilization’: Guidelines Board Approves Hefty Rent Hike

Abandon hope, all ye who enter here. On Thursday night, the Rent Guidelines Board voted to jack up the rent

It's going up of course.
It’s going up of course.

Abandon hope, all ye who enter here. On Thursday night, the Rent Guidelines Board voted to jack up the rent approve rent increases of 4 percent for one-year leases and 7.75-percent for a two-year leases, as reported by The New York Times. The decision will mean increases of $40 a month, or $480 a year for a $1,000-a-month apartment, or $960 for a $2,000-a-month apartment, twice the amount of the 2012 increases, which were capped at 2 and 4 percent respectively.

When not even rent stabilized tenants can afford to stay in New York, the rest of us may as well start looking for apartments in Jersey City. Or maybe it’s time to throw in the towel altogether and decamp to the West Coast, leaving Manhattan to the I-bankers and the spoiled spawn of people who actually work for living.

Although the move was presaged by the board’s earlier decision to set the increases between 3.25 and 6.24 percent for a one-year lease and between 5 and 9 percent for a two-year, the increases are nonetheless stunning. While the population which rent stabilization is intended to help have faced years of wage stagnation at the same time that living costs have continued their merciless ascent—the price of a MetroCard has spike 32 percent in the last four years and even in the depths of the recession, the Rent Guidelines Board voted to allow rent increases. The luxury lifestyle is increasingly the only lifestyle available on the island.

As one 62-year-old Upper East Side renter told The Times, the decision was “the kiss of death for those on fixed income”— a description that no longer applies exclusively to retirees, but to a growing number of working individuals.

And while the approved rent increases affect one million—or approximately half—of the city’s renters, their ripples will no doubt be felt across the city at large. If a city board charged with balancing the interests of the renters and the landlords determines that a 4 percent increase is a fair compromise, what can we expect of the landlords who are not bound by such limitations?

The Rent Guidelines Board’s decision was immediately criticized by several mayoral candidates who, sensing New Yorkers’ growing panic over the ever-rising costs of housing, have made affordable housing a key issue this election (though none have yet managed to put together anything resembling a compelling policy proposal).

Christine Quinn scolded the Rent Guidelines Board for squandering its opportunity to protect tenants by subjecting “New Yorkers to disruptive rent hikes” and called on the board to hold public hearings in all five boroughs—a dig at the board’s decision to hold hearings only in Manhattan this year. (Although, as The Observer reported last week, most of the rent stabilized tenants in the outer boroughs do not feel the direct impact of yearly increases because their rent is significantly lower than rent stabilization allows.)

Bill de Blasio, meanwhile, blasted the board for driving the middle classes out of entire neighborhoods and thereby threatening the foundation of the city.

“At a time when nearly half of the city is living at or close to poverty, the Board has chosen to sharpen the economic inequalities dividing our city. Tenants desperately needed a rent freeze,” Mr. de Blasio wrote in a release.

Earlier, Ms. Quinn, Mr. de Blasio and John Liu all called for a rent freeze—a move that smacked of political grandstanding given the obvious unlikelihood of that ever happening under the board’s current operational methods. Invariably, the board votes for rent increases because such increases are determined by balancing the very concrete and ever-rising costs incurred by building owners—taxes, water, sewer, etc.—with the general economic outlook and the vague, anecdotal accounts of middle-class renters. And every year the board determines how much landlords’ costs have gone up, then knocks that number down a little bit in consideration of the renters’ plight.

If the next mayor really wants to change things, he or she should actually start studying how the city can reform the board’s operation. Rather than permitting the closed-door meetings and mysterious calculations that keep a major public policy decision veiled in secrecy, why not establish what criteria the board can and should consider in determining rent hikes, then set guidelines for when and if an increase is appropriate? And while the next mayor’s at it, how about mandating that the board detail how it arrived at its decision? Why should New Yorkers be left to puzzle together what the board was thinking—as The Times wrote, “the chairman of the board alluded to higher water and sewer charges for property owners and a stagnant economy and high unemployment rates for tenants in putting forth the new increases.” A public board making a policy decision that affects more than a million people owes them more than hints of what might have been. New Yorkers deserve at least a brief breakdown of its decision.

So Much for Rent ‘Stabilization’: Guidelines Board Approves Hefty Rent Hike