Rent Freeze Leaves Some Tenants and Owners Feeling Left Out in the Cold

The Rent Guidelines Board has voted to freeze the rents on rent-stabilized apartments that are up for a one-year lease renewal between October 1, 2016 and September 30, 2017, and has agreed on a 2-percent increase for two-year leases. It’s the second year in a row that one-year leases will not face a rent increase– a move that had previously been unprecedented in the 47-year history of the board.
After months of public testimony from tenants struggling with rent payments, inadequate housing repairs, and even downright hostile landlords, the proposal passed yesterday with 7 votes in favor and 2 abstensions. The vote was met with heightened emotions, and the Great Hall at Cooper Union was filled with the protests of various tenant rights advocacy groups, who yelled out as Kathleen A. Roberts, the chair of the Board, read out the passed proposal.
“Two percent is two much,” the crowd chanted over Roberts, while others simply shook their heads in disappointment. Many tenants groups had been hoping for a rent break, with angry cries of “We want a rollback” bursting forth from the seats at frequent intervals during the final vote.
Harvey Epstein, an RGB tenant member, explained that he “appreciated the opportunity of a zero [increase] for a one-year lease,” adding that it sent a strong signal. “It’s not the rollback we wanted,” he said, “but it’s a message that says the situation in New York is a dire situation and that people are struggling.”
Epstein’s fellow tenant member Sheila Garcia echoed his statement, calling the proposal “a bold motion” and expressing her hope that it will lead to “a different conversation as a city.”
“They are listening to you and your stories. They are listening to the data. It might not always feel that way, like right now, but I do feel like you guys came by the thousands at these hearings. You testified, you have prepared to share your stories in unprecedented levels, and I applaud you guys for that, and this is actually possible because of your work,” she said amongst applause.
Nontheless, Epstein and Garcia, who both initially passed on the vote and then ended up approving the proposal, voiced concerns about the two percent increase. “That two percent, it really isn’t mirrored by the data,” Epstein said. “It doesn’t acknowledge the realities of New Yorkers and the struggles that they’re facing every day.”
Among some boos and jeers, Roberts described the data that informed the passed proposal. “This year, prices for all types of owner expenses increased, with the exception of a dramatic 41 percent drop in the cost of fuel to heat multi-family buildings,” she explained, which was responsible for the 1.2 percent decrease of the Price Index of Operating Costs (PIOP), whose drop was frequently cited as a justification for a rent rollback. That drop in fuel prices offset the increase in other expenses, she said.
“Because the underlying income is higher than the underlying expenses, the owners net operating income, the income remaining after costs, increased by 3.5 percent,” she acknowledged among shouts of outrage.
Nonetheless, Roberts didn’t believe that “one single abberational cost factor” was a good reason for justifying a rollback. “It is also important to consider how different owners are situated,” she said. “Especially for small owners, a rollback would challenge their ability to maintain their buildings, a factor we must consider as well as affordability.”
Roberts also cited projected maintenance costs for the next two years, which are predicted to rise again, as a significant factor in the decision to implement a two percent rent increase on two-year leases.
Many tenants were visibly disappointed after the results. Beverly Rivers, a Trinidadian immigrant and day-care worker who lives in Flatbush and is a member of the Flatbush Tenant Coalition, said: “Those judges just didn’t listen to the tenants, they just listened to themselves!”
Rivers, who is on disability, expressed outrage at the fact that her disability was less than her rent, which was the case for many other tenants as well, she said. “We are struggling!”
Redoneva Andrews, a mother of five who was sitting next to Rivers, nodded in agreement. “These increases put such a strain on you,” she said sadly.
Others were more resigned. Giralda Araquez, a resident of Bushwick and a member of the Bushwick-based non-profit Make the Road New York, shrugged her shoulders at the result. “We’re content,” she said in Spanish, adding that the most important thing was to show a united front. “It’s important to organize like this,” she said. “The union makes us strong. When they see us come out in such numbers, they have to listen to us.”
Araquez, who cleans houses for a living, said she was happy about the one-year freeze, and didn’t see much point in protesting the two-percent increase, since it already passed. “Look, what can we do? There’s no point in crying about it now.”
Mayor Bill de Blasio celebrated the decision. “This year, the facts demanded a rent freeze,” he said in a statement. “More than a million people will now have more security and a better shot at making ends meet. And the financial health of our buildings will remain protected because declining fuel costs have offset other expenses. In short, tonight’s decision by the Rent Guidelines Board reflects what’s actually happening in our neighborhoods.”
Nonetheless, landlords were not exactly thrilled with the results either. Mary Serafy and J. Scott Walsh, the two owner representatives on the board, abstained from voting after their proposal for a three percent increase for one-year leases and a five-percent increase for two-year leases was shut down in a 7-2 vote. Many landlords felt that the PIOP data did not fully represent the costs of maintaining their buildings, and that the drop was misleading.
Before the vote, the Rent Justice Coalition organized various tenant advocacy groups, including Make the Road New York and the Lower East Side-based GOLES to protest in front of Cooper Union and demand a rent rollback. Various elected officials were also present. City Council member Ben Kallos, who represents the 5th district, explained that 22 members of the council had written a letter to the RBG advocating for rent rollbacks, explaining that the drop of the PIOP should be taken into account when attempting to alleviate the pressure on rent-stabilized tenants, the majority of which are considered rent-burdened since over half of them pay about 36.4 percent of their income toward rent (affordable housing is classified as taking up less than 30 percent of a family’s income per month, Roberts had explained).
Wasim Lone, the community organizer for GOLES, explained that the constant increases in rent, coupled with stagnant wages and a low PIOP, indicated that it was “high time for tenants to get a break.”
When confronted with owner complaints that operational costs for small landlords were still significant, he said: “We’ll be more sympathetic to them once we see the books!”
Update, 10:30 a.m. State Senator Brad Hoylman, whose district includes parts of the East Village and Lower East Side, has issued the following statement:

I hear every day from hardworking families struggling to save for retirement, start college funds for their kids or even put food on the table because of skyrocketing rents. The Rent Guidelines Board’s own statistics show that while landlords continue to enjoy higher profits and lower costs, one in three tenant households in New York City are spending more than half their income on rent. And while I appreciate the RGB’s efforts on behalf of one-year leaseholders, the tragic failure to freeze two-year leases is a missed opportunity that will place undue hardship on thousands of vulnerable tenants. An historic affordability crisis demands equally historic solutions, and going forward lawmakers in both Albany and New York City must right this wrong by providing much greater protections and assistance to tenants.

Update, 10:45 a.m. City Council member Margaret Chin, whose district encompasses a good deal of Chinatown and the Lower East Side, has issured this statement:

Though I called for a rent rollback in my testimony before the Board, I am gratified that the Rent Guidelines Board voted to freeze rents for one-year lease renewals and for a 2 percent increase for two-year leases. This decision is an acknowledgement of the terrible burden facing New York City renters. It’s a positive move, but we must do more. Unless the burden on renters substantially lifts, I will be back next year to call on the Board to roll-back rents on New Yorkers who have absorbed most of the rising costs of living and doing business in our City – all while landlords have seen their profits rise to greater and greater heights.