Activate It's Time for a Rent Rollback by Ilana Maier
New York’s affordability crisis is at a breaking point and it hinges on rent.
On June 24th, the Rent Guidelines Board (RGB) will vote to determine how much landlords can increase rents for 2.5 million New Yorkers living in regulated apartments. Rent regulation is New York’s largest affordable housing program and it includes over one million families and almost half of the city’s rental apartments.
This year, a coalition of advocates, tenants and elected officials are calling for a rent rollback. After decades of unnecessary and destructive increases, New York City is facing a terrible housing crisis with record high homelessness and a consistently low vacancy rate. The RGB must act now to rectify their role in forcing tenants out of their homes by decreasing rents. At the preliminary RGB vote, the tenant representatives proposed a four percent and two percent decrease for one and two year lease renewals, respectively. Even though the board rejected this proposal, it is still possible for the board to support tenants and vote for a rent freeze at the upcoming final vote.
"For too long, rent increases have outpaced inflation, wage growth and landlord expenses. Now, we have the opportunity to right those wrongs through a rent rollback. As landlord costs have gone down with fuel prices, now is the moment to provide much-needed relief to tenants. I am proud to stand alongside hardworking New Yorkers in calling for a rent rollback this year," said Council Member Ben Kallos.
New York has a severe and persisting housing shortage that distorts and destroys any notion of a competitive, fair market. For over two decades, vacancy rates in the city have remained around three percent. The 2014 vacancy survey is no less frightening than in past years; the vacancy rate for rent stabilized apartments is only 2.12 percent and the vacancy rate for low rent apartments ($800 per month) is a mere 1.8 percent.
During the recent recession, while rents decreased around the country, New York tenants faced excessively large, unwarranted and ultimately destructive increases. The previous administration did not hide their disdain for rent regulation or their desire to turn New York into a luxury City. The RGB members chosen by Bloomberg fought to increase rents, relying on faulty data that vastly overestimated landlord costs, even though tenant incomes declined and homelessness skyrocketed. In 2008 alone, in the midst of the recession, rents increased 4.5 percent and 8.5 percent, even though operating costs remained virtually unchanged.
Working families are still recovering from the recession and any rent increase threatens to force more New Yorkers onto the streets and out of the city.
Tim Collins, a tenant attorney and former executive director of the Rent Guidelines Board, explains, “by any reasonable measure, since 1990, the RGB has hiked rents significantly more than necessary to keep owners whole, in terms of operating costs and the effects of inflation on net income, at least 30% more. Most of the excess came during the recession when tenants were badly hurt by stalled or declining incomes.”
The drastic and unnecessary rent increases are not surprising to tenant advocates, the increases are merely another front to the real estate industries battle to end rent regulation and create a city exclusively for millionaires.
“The rent increases adopted by the RGB from 2008 through 2013 can only be described as an illegitimate attempt to hasten the end of rent stabilization” Collins says. “The only way to repair that damage is to adopt a series of modest rent rollbacks until this unwarranted landlord windfall is eliminated. There is no good policy reason to delay that process.”
Tenants around the city are struggling to remain in their homes, more than half of regulated tenants are paying over thirty percent of their income towards rent and thirty percent of tenants are paying over half of their income for rent. This extreme rent burden is unsustainable. New York cannot continue to grow without homes that are affordable for young professionals, service workers and public employees. New York relies on a diverse workforce to build and sustain the city’s infrastructure and services.
The RGB should not exist to deregulate the city and it should not be a tool for the real estate industry to force working families out of their homes.
“Without a rent rollback, I don’t know how I will continue to pay the bills. I’m worried that I will need to rip my kids out of their school and we will lose our community. I’m not asking for a handout, I just want to stay in my home,” says Jamaica Taber, a rent stabilized mom living in East Williamsburg. “If our rents increase, we will lose our home in more ways than one.”
For too long, the Rent Guidelines Board has been an instrument of the real estate industry. This year, they need to really consider the data and the testimonials. If they do that, they will undoubtedly vote for a rent rollback. It’s the ethical decision, it’s the smart decision and it’s the right decision.