New York, NY – April 20, 2012 – (RealEstateRama) — The New York State Tenants & Neighbors Coalition today joined with elected officials and allied organizations at a rally and press conference in support of critical legislation to protect seniors in rent controlled housing, A1892/S5699 (Rosenthal/Espaillat).
Tenants & Neighbors’ Rent Control Tenant Leadership Committee, made up of seniors living in rent controlled housing, organized this event as a follow up to an earlier rally with Assembly Member Linda Rosenthal. Both rallies were organized as part of the tenants’ intensive campaign in support of A1892/S5699. In this campaign, tenants are focusing on the unaffordable 7.5% rent increases forced on many rent controlled tenants under the current Maximum Base Rent/Maximum Collectible Rent System.
At the rally, the Rent Control Tenant Leadership Committee performed a satirical version of “Seven and a Half Cents” from the musical The Pajama Game. The re-written lyrics included the chorus: “Seven and a half percent really takes a hell of a lot/ Seven and a half percent really takes our dough!”
Under the Rosenthal/Espaillat bill, the Rent Guidelines Board would be given the authority to set rent adjustments for rent controlled tenants whose landlord has gotten HCR authorization to increase the rent.
The Rent Control Tenant Leadership Committee is pushing for the state legislature to pass the bill this legislative session. The Real Rent Reform Campaign, which has endorsed their campaign and added the bill to its legislative agenda, is supporting their organizing and advocacy efforts.
“The vast majority of rent-controlled tenants are seniors, many of whom lived on fixed incomes. Rent increases of up to 7.5% a year are a crippling drain on their resources and puts serious displacement pressure on elderly folks who have lived in their homes for decades. That’s why we’re fighting to eliminate the MBR system and instead have rent increases determined by the Rent Guidelines Board. At least that way tenants might have a fighting chance to stay in their homes and their communities,” said Maggie Russell-Ciardi, Executive Director of the New York State Tenants & Neighbors Coalition.
“The problem with the MBR system is that it never stops going up. Rent controlled tenants are mostly seniors, and if we don’t die first, we will be forced to move,” said a member of the New York State Tenants & Neighbors Coalition Rent Control Tenant Leadership Committee.
Senator Adriano Espaillat (D – Manhattan/Bronx) said “Owners of rent-controlled apartments are entitled to automatically raise rents up to 7.5 percent each year. Raising rents at this rate drives New Yorkers from their homes. That is why I have introduced legislation to put an end to these exorbitant hikes by requiring increases in rent for rent-controlled apartments to be calculated by the same formula used for rent-stabilized units.”
“Rent-controlled tenants are, on average, seniors over the age of 70 with a median household income under $30,000 a year. Because of antiquated regulations, these low-income seniors are facing 7.5 percent rent increases, year after year, outpacing even their rent-stabilized neighbors. Doing away with this system and having the Rent Guidelines Board calculate increases the same way it does for rent-stabilized tenants will restore a measure of fairness and help these seniors afford to stay in their own homes” said State Senator Liz Krueger (D-Manhattan).
“My bill, A.1892, concerning rent control, would eliminate the antiquated Maximum Based Rent (MBR) system and require the Rent Guidelines Board to calculate rent increases for rent-controlled tenants in the same way that it does for rent-stabilized tenants. It is unconscionable that rent-controlled tenants are subject to a 7.5% rent increase every year,” said Assemblymember Linda B. Rosenthal (D/WF-Manhattan). “In addition to these steep rent increases, these tenants also pay fuel pass along costs, which further compounds the inequity of the system. The system of determining the rents for rent-controlled tenants must be scrapped. Together, with the dedicated advocates at Tenants and Neighbors, I will work towards passage of my bill, to ensure that all rent controlled tenants in this City are treated fairly and equitably.”
Background about Rent Control
There are approximately 38,000 rent controlled tenants in New York City. The average rent-controlled tenant in New York City has a median income of $24,000 and pays 30% of his or her income toward rent. In addition, the vast majority of rent-controlled tenants are senior citizens living on low, fixed incomes. Despite this, under the current Maximum Base Rent system, many rent-controlled tenants are ordered to pay increases of up to 7.5% every year, which is often higher than the percentage increase paid by rent-stabilized increases, whose rent adjustments are determined by the Rent Guidelines Board.
Background about the Maximum Base Rent System
The rents in rent controlled apartments in New York City are governed by the Maximum Base Rent (MBR) system. This system is based on a formula for computing the maximum rent levels for each controlled apartment. The MBR represents an approximation of the income required to operate the housing unit under current costs, including an 8.5% return on the equalized assessed value. The MBR is adjusted every two years to reflect changes in economic conditions. This year, it was adjusted by 7.8 percent. In the last cycle, it was adjusted by 12.9%.
For every rent controlled unit, there is also a Maximum Collectible Rent, which is the rent the tenant actually pays. The owner is permitted to increase the Maximum Collectible Rent up to 7.5% per year until the MBR is reached. But since the MBR is adjusted every two years- often by very significant amounts, many tenants never reach the MBR, and continue to pay 7.5% increases every year.
Under the MBR/MCR current system, in order for owners to receive rent increases for rent controlled units they must file applications and the HCR must determine that they qualify for an MBR Order of Eligibility. In order to be eligible to adjust the MBR factor, the building must meet all MBR certification requirements. The owner must be providing all essential services and the building must have no outstanding NYC Department of Housing Preservation and Development’s (HPD) Division of Code Enforcement (DCE) rent-impairing code violations. In addition, owners must spend specified amounts of the building’s rental income on operation and maintenance expenses. These protections would be continued under the Rosenthal/Espaillat bill.
Contact:
Katie Goldstein, Tenants & Neighbors, 212-608-4320 ext. 400, kgoldstein (at) tandn (dot) org
Maggie Russell-Ciardi, Tenants & Neighbors, 212-608-4320 ext. 310, maggie (at) tandn (dot) org
