Council Member Ben Kallos Calls for Rent Rollback

Council Member Ben Kallos Calls for Rent Rollback
New York, NYToday, Council Member Ben Kallos (D-Manhattan) joined tenants, advocates and colleagues to call for a rent rollback in public testimony before the Rent Guidelines Board. The following is Council Member Kallos' testimony, as prepared for delivery:
New York City Rent Guidelines Board (RGB) Public Hearing and Comment on Proposed Rules
June 8, 2015

I am Council Member Ben Kallos, representing the Upper East Side, Midtown East, Roosevelt Island and El Barrio.

Good afternoon to the Rent Guidelines Board Chair Rachel Godsil, Public Members Flax, Joza, Rahman and Schaub, Owner Members Walsh and Willard, and Tenant Members Epstein and Garcia.  

To New Yorkers here today, and especially tenants, thank you for attending this hearing. I am proud to stand with you today. This year, I am calling on the Rent Guidelines Board to vote for a rent rollback. You can tweet me @BenKallos with the hashtag #RentRollback to show your support, and I will be sure to retweet.

Last year, the Board voted for a historic low 1% increase for one-year leases and 2.75% for two-year leases—but that did not correct for the disproportionately high increases of previous years.

Year after year, as rent goes up, tenants have shouldered an undue burden. Meanwhile, income cannot keep pace, and only crept up by 2.3% between 2005 and 2013 in real terms. The approved rent increases each year have largely been based upon the landlord’s operating costs, measured by the price index of operating cost (PIOC). This practice not only fails to consider tenants, but has also proven to be inaccurate: based upon data from the DOF, the PIOC has overstated landlord costs by 11% since 2005. This miscalculation led to unfairly high rent increases in past years, which must be corrected with a rent rollback.
Rent Guidelines Board increases have also far outpaced inflation and the consumer price index.  I have compared 20 years of RGB increases to the Consumer Price Index and found that the rent increases outpaced the Consumer Price Index by 14%. That means a $500 a month apartment in 1994 is now a minimum of $906.19 a month with an annual rent of over $10,874.22. Following inflation, that same unit would be $786.30 a month and $1,438.60 less a year. 

Those increases have come with consequences. A unit is considered affordable if the rent is no higher than 30% of their household income. The median rent-to-income ratio of tenants in rent stabilized apartment is 36.4%. By this standard, a majority of rent-stabilized tenants have units that are not affordable. The stress of financial insecurity takes a toll on New Yorkers every day.

To correct for these disproportionate increases, tenants must finally get a rent rollback.

A rent rollback is also economically feasible for landlords. Even by the slanted standards of the PIOC, operating costs only increased by a mere .5% this year. We have an opportunity to correct for years of high rent increases and subsequent burden on tenants, without greatly burdening landlords. After so many years of only considering landlord costs, it is time to consider the needs of our tenants. This is a city of renters, but we will only remain one if we vigorously protect the affordable housing we already have. 

The steady loss of rent-stabilized units, one of our most precious housing resources, is mostly due to high rent vacancy deregulation. Raising rents is both an enormous burden for tenants currently in their apartment and contributes to the overall loss of affordable housing. The city has lost 104,155 rent stabilized units in the past twenty years. The board should take into consideration the effect of this enormous loss.

The time is now for a rent rollback, for the 29,000 rent-stabilized units in my district and for tenants across New York City.