NEW YORK, NY – September 28, 2012 – (RealEstateRama) — On Monday, October 1st, new rent increases approved by the New York City Rent Guidelines Board will begin going into effect, raising the cost of housing for millions of rent stabilized tenants. For many tenants, these rent increases will be a severe hardship, and will further heighten the effects of the economic recession.
The New York City Rent Guidelines Board is a 9-member panel appointed by the Mayor that has tremendous power: the power to decide every year whether or not rents in rent stabilized apartments should be increased, and if so, by how much. Unlike the Rent Guidelines Boards in the suburban counties, which have a different appointment process, the New York City RGB has never frozen or rolled back rents, regardless of the economic circumstances.
In June, 2012, the Rent Guidelines Board voted to increase rents by 2% for one year leases, or 4% for two year leases for renewal leases that go into effect on or after October 1, 2012. At the same time, the Board voted for a “supplemental rent increase.” This is an additional charge imposed on tenants who can least afford it: those who live in apartments renting for under $1,000. The RGB allowed landlords to raise rents for these tenants, who tend to be low-income people who simply cannot afford higher rents, by $20 per month for one year leases or $40 per month for two year leases. This may not sound like a lot to some more affluent New Yorkers, but for those New Yorkers who are struggling to make ends meet, this kind of increase can mean having to make difficult choices between paying the rent and buying other essential items for their family, such as food or medicine.
According to the city’s 2011 Housing Vacancy Survey, over 80% of low rent apartments are occupied by poor or near-poor households.[1] The RGB’s “supplemental rent increase” amounts to a regressive rent hike for those who can least afford it: low income households, senior citizens, and long-term residents.
The rent increases that begin going into effect on October 1st hit tenants as recent data has emerged showing that poverty, inequality and homelessness are reaching record levels in the city. With poverty rising to 21% in the city, income inequality rates rivaling sub-Saharan Africa, and homelessness facing almost 46,000 New Yorkers, this is an incredibly difficult time for working New Yorkers to have to face a rent increase, let alone one that disproportionately hurts the city’s most vulnerable populations. While New York City’s wealthiest residents (including Mayor Bloomberg- net worth $25 billion- who appointed every member of the Rent Guidelines Board) continue to prosper, the city is facing an affordability crisis.
Tenants & Neighbors has consistently opposed rent increases that disproportionately impact low-rent tenants. Tenants & Neighbors was a plaintiff in a lawsuit, Casado v Markus, challenging the New York City RGB’s decision to approve a minimum rent increase in 2008 and 2009. The New York State Supreme Court ruled in our favor in January 2010, and the Appellate decision did the same in June 2010, but unfortunately in March of 2011 the Court of Appeals reversed those earlier rulings, which made the minimum increases approved last week possible.
This past legislative session, Tenants & Neighbors fought hard to try to pass two pieces of legislation that would have reformed the Rent Guidelines Board, and made these regressive rent increases illegal. Assembly bill A06394/ Senate bill S0741, sponsored by Assembly Member Brian Kavanagh and Senator Daniel Squadron, would have reformed the RGB in several simple and pragmatic ways. The bill would have allowed the New York City Council to review the Mayor’s RGB appointments, broadened the criteria for entry to the Board, and allow unpaid members of tenant organizations to serve on the Board. Tenants & Neighbors also strongly supported another piece of legislation, Assembly bill A7234/ Senate bill S5603, sponsored by Assembly Member Linda Rosenthal and Senator Adriano Espaillat, which would have banned the kind of supplemental rent increases that the RGB passed this year. The RGB would no longer be able to approve higher rent increases for one particular class of rent stabilized tenants. Though these important reform bills were passed through the Assembly, they unfortunately did not come to a vote in the Senate.
Sam Stein, rent regulation campaign coordinator at Tenants & Neighbors, called these rent increases a “poor tax.” “The rent hikes that start going into effect October 1st are targeted at those who can least afford to pay them. New York City can’t afford another year of regressive rent increases; we need RGB reform now.”
Cynthia Allen, a Tenants & Neighbors member and a rent stabilized tenant in Harlem who is subject to the RGB’s “supplemental rent increase,” called attention to the impact of these rent hikes on low income tenants. “I think it’s unfair for me and other tenants like me to be penalized for being long term tenants. My salary has not increased in over four years, yet I have been hit with the supplemental rent increase twice. When my lease expires on October 31st, I will be paying close to 90% of my salary on rent. It’s not just the retired and disabled who are living on fixed incomes- it is also the working class, or working poor. If the rent laws are not reformed we will have no where else to go but to the city shelters.”
[1] The HVS defines poverty as earning less than 100% of the federal poverty level; a “poor” household of two adults and a child makes $17,552 or less. “Near-poor” is defined as between 100% and 200% of the federal poverty line; a family of two adults and one child makes $35,104 or less.
Contact:
Sam Stein, 212-608-4320 x316
Maggie Russell-Ciardi, 212-608-4320 x310
