Rent Guidelines Board Votes Through Rent Increases for 1 Million NYC Apartments
Housing in the Bronx (photo: Michael Appleton/Mayoral Photography Office)
Update: On Tuesday evening, the Rent Guidelines Board voted 5-4 to approve rent increases of 3.25% on one-year leases and 5% on two-year leases for the roughly 1 million rent-stabilized apartments in New York City.
Many elected officials quickly condemned the decision, calling the increases too high, though they are lower than what the board's independent analysis showed building owners need to cover rising costs. Still, many rent-stabilized tenants live on fixed or low incomes and are struggling with their own rising costs given inflation, and it is the highest increase in nearly a decade.
“While we raised our voices and were successful in pushing the increases lower, the determination made by the Rent Guidelines Board today will unfortunately be a burden to tenants at this difficult time — and that is disappointing," Mayor Adams said in a statement Tuesday evening. "At the same time, small landlords are at risk of bankruptcy because of years of no increases at all, putting building owners of modest means at risk while threatening the quality of life for tenants who deserve to live in well-maintained, modern buildings."
“This system is broken, and we cannot pit landlords against tenants as winners and losers every year," the mayor continued, adding that he "will be fighting in Albany for additional support for tenants who are at risk of missing rent payments and landlords who are struggling to maintain and upgrade their buildings.”
Read much more in Gotham Gazette's story about the Rent Guidelines Board published Tuesday morning:
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On Tuesday, June 21, the New York City Rent Guidelines Board is set to vote on rent increases for the tenants in roughly 1 million rent-stabilized apartments across the five boroughs, home to about 2 million people.
Rent-stabilized housing units are generally considered among those built before 1974, with six or more units, inducted through the Emergency Tenant Protection Act (EPTA), though other units that are derived from affordable housing and tax incentive programs may also be considered rent-stabilized, according to New York City Department of Housing Preservation and Development (HPD).
The board decision comes after it undertook its usual annual process — but is the first since the end of the pandemic era eviction moratorium and under new Mayor Eric Adams, who has expressed more solidarity with landlords than his predecessor, Mayor Bill de Blasio, who exercised his power to help institute several years of rent freezes or very small increases through the mayor-appointed board.
According to the HPD’s 2021 New York City Housing and Vacancy Survey (NYCHVS) released in May of this year, there were 1,006,000 rent-stabilized housing units citywide, accounting for 44% of the city’s rental units, and 28% of the city’s overall housing stock. The survey also showed that the city’s overall rental apartment vacancy rate was 4.54% as of 2021.
It showed nearly 43,000 vacant units classified as rent-stabilized, raising questions about the status of that much-desired housing stock and how to get those apartments filled by tenants in need of affordable places to live.
In 2021, the median monthly rent for rent-stabilized units was $1,400. (For other renter-occupied units, the median was $1,500.)
After issuing its annual report and holding several public hearings, the board is making its final decision based on its own proposed rent increases in the range of 2-4% for one-year leases and 4-6% for two-year leases for rent-stabilized apartments. The decision is likely to mark the highest rent increases in nearly a decade, and will apply to leases signed between October 1, 2022 and September 30, 2023.
This year’s proposed rent increases by the Rent Guidelines Board have sparked controversy amid continued pandemic upheaval, significant inflation, and the rising costs of both providing and renting housing, as well as broader costs of living. The board is meant to take into account affordability for tenants as well as the costs for operating housing taken on by building owners and managers, including making repairs and upgrades. These and other factors, like the production of new housing falling far short of demand for many years, have been exacerbating New York’s ongoing housing crisis.
Many of the rules around rent-stabilized housing changed significantly in 2019 when the State Legislature passed and then-Governor Andrew Cuomo signed the Housing Stability and Tenant Protection Act, which removed mechanisms by which rent-stabilized units were regularly taken out of the stabilization system and put into the open market, as well as strict new limits on rent increases that landlords could assess outside of the annual Rent Guidelines Board process. Those changes, then followed by the pandemic, have made this year’s RGB decision additionally fraught.
This month, the Rent Guidelines Board has held four hearings to take testimony from the public about the possible rent increases before the final decision is made.
The board of nine, which contains two members appointed by Mayor Eric Adams and the rest holdovers of the de Blasio years, must make the decision by July 1, taking into account concerns from public officials, tenants, landlords, building owners, and developers, all while weighing data to decide what makes the most sense for the city.
The board has scheduled its decisive hearing for the evening of Tuesday, June 21, as a flood of testimony comes in from interested parties and stakeholders.
Rent Guidelines Board Make-Up and Recent History
The RGB is made up of nine mayor-appointed members, with two meant to represent tenants, two to represent building owners, and five to represent the general public. Those five are where the mayor’s perspective and appointments are often especially decisive.
For the pairs of members representing tenants and owners, one of the two serves a two-year term, and the other a three-year term. For those representing the general public, one member serves a two-year term, another for three years, and the remaining three serve four-year terms.
Two current members, Arpit Gupta, representing the general public, and Chrystina Smith, representing owners, are Adams’ own appointees made this year by the Democratic mayor who took office January 1.
Each year, the Rent Guidelines Board uses its Income and Affordability Study—released annually in April—and relevant data, such as real estate taxes, insurance and vacancy rates, and overall housing supply to assess the appropriate rent increases for rent-stabilized units.
Recent history has also included full (2020) and partial (2021) rent freezes on rent-stabilized units, as the Rent Guidelines Board took extraordinary measures influenced by the COVID-19 pandemic and other factors. Prior, the increases for both one- and two-year leases did not go higher than 2.5% from 2015 through 2019, a period that began in Mayor de Blasio’s second year in office, after he changed the constitution of the board.
The partial freeze in 2021 meant rent increases took place after six months.
This Year’s Process and Mayor Adams’ Role
In April of this year, the RGB voted through an initial set of proposed, unofficial ranges of increases of 2.7%-4.5% for one-year leases and 4.3%-9% for two-year leases. The high end of the two-year range, especially, set off a firestorm of criticism about the potential shock to renters, though the numbers were based on the board’s annual study.
After the board and Mayor Adams took considerable heat from tenants, activists, and elected officials, the board then decreased the ranges during a 5-4 vote by the RGB in May. Adams himself questioned the initial numbers, and took partial credit for influencing the board to decrease them to the percentages offered in the final unofficial proposed ranges.
“We must be fair here,” he said when asked by reporters at an April news conference. “Allow tenants to be able to stay in their living arrangements, but we need to look after those small mom-and-pop owners.”
But following the adjusted percentages proposed by the RGB, there has been continued discussion about the numbers being too high, with some claiming that increased rents could mean disaster for tenants who are already faced with other housing-related issues.
And though Adams was critical of the initial proposed potential increases by the Rent Guidelines Board, he has said he won’t interfere with the process.
“Independence is independence. That's an independent board. I made it clear that we have to find the right position to look after those small property owners, which is—they've been decimated by the increase in fuel, property taxes, so many other things,” he said during a later press conference in May, where he also stressed that there needs to be systems in place to keep the city’s property owners who were impacted by COVID afloat. “Because if we lose those small property owners, you're going to have major developers come in and then we're going to have a real problem.”
But Adams also expressed concerns for tenants, speaking as a small property owner and landlord himself. “I never raised the rent of my tenants since they lived in my building. When they signed a lease, they signed a lease with me signing I would never raise your rent as long as you're there,” he said. “So we can show the compassion. At the same time, I understand what the families are going through on both ends of the spectrum.”
On June 20, New York City Council Speaker Adrienne Adams, a Queens Democrat (and no relation to the mayor), released testimony ahead of the RGB vote, calling for the lowest rent increase possible by the board.
“We cannot afford to plunge hundreds of thousands of rent-regulated New Yorkers into the chaos of a housing market that already does not have sufficient supply to meet demand, especially when our city is in the midst of demonstrating remarkable resilience in its recovery efforts,” her testimony reads. “We cannot move forward if it means leaving our most vulnerable behind.”
More Debate Over This Year’s Decision
Between March and May, the RGB held six public hearings and meetings to discuss various housing-related reports, as well as take a good deal of testimony from invited tenant and owner groups about lease adjustments on rent-stabilized housing.
In June, the board hosted a series of public hearings to take testimonies from concerned parties about the adjusted rent increases proposed in May. The first of these hearings were on June 6 and 8, dates that were added after complaints that the board would only be offering in-person hearings the week after.
A majority of testimony at the first two hearings in June was from tenants who live in rent-stabilized units, speaking in favor of lowering the percentages of the rent increases, or calling for a rent freeze in light of the pandemic and other economic issues.
At that second hearing, Manhattan Borough President Mark Levine testified on behalf of himself and eight New York City Council members representing parts of the borough, calling for a rent freeze, citing homelessness and the pandemic as prominent reasons as to why the proposed increase could be catastrophic for tenants.
Several people testified in favor of the proposed rent increases, some stating that the RGB should vote at the higher end of the percentages, and others claiming the numbers were still too low, including building owners and landlords. They cited inflation rates, costs of maintenance, increases in property taxes, and the costs of oil and water rates as their reasons for supporting the increases.
Some tenants who testified said that their landlords have been holding out on maintenance, and that they do not believe the income from the proposed increases would be allocated toward repairs, claiming that there has not been any urgency to use revenue from tenants’ rent payments for maintenance.
Among those testifying against the proposed rent increases were members of the tenant advocacy group Neighbors Helping Neighbors, and tenants from Stuyvesant Town-Peter Cooper Village, a very large set of Manhattan developments with thousands of rent-stabilized apartments. Both highlighted the challenge the proposed rent increases would pose to low-income households, older tenants, and others impacted by the pandemic and ongoing housing crisis.
Among some of the other public officials who testified at the final in-person hearing and spoke in support of tenants, as well as called for an enactment of a rent freeze, were State Senator Robert Jackson of Manhattan, Assembly Member Jeffrey Dinowitz of the Bronx, and City Council Members Tiffany Cabán of Queens and Althea Stevens of the Bronx.
“The Rent Guidelines Board should pass a rent hike of no more than zero percent. That is a modest compromise,” said Cabán at the close of her testimony, on the heels of stating that anything other than a rent freeze would be unfair to New Yorkers who are struggling to make ends meet otherwise.
Bronx City Council Member Pierina Sanchez, chair of the Council’s Committee on Housing and Buildings, also spoke at the hearing. “I am more certain than ever before that the urgency of a rent freeze is most critical today. This is corroborated by the daily experience of speaking to neighbors visiting our office who are drowning in the housing crisis facing New York City, with a vacancy rate lower than 1% in the Bronx,” she said in her statement on the impending RGB vote.
Jay Martin, executive director of The Community Housing Improvement Program (CHIP), an association made up of about 4,000 owners and managers of over 400,000 rent-stabilized housing units, has argued in favor of the proposed rent increases, and expressed his concerns that the numbers are still too low given the costs owners are facing and the artificially low decisions of the RGB during the de Blasio years.
In preparation for the upcoming vote, Martin—who also submitted testimony to the RGB—said on a recent episode of Gotham Gazette’s Max Politics podcast that he expects the board “to understand that they have a duty to look at the expenses and try and balance what is a reasonable, proportional rent adjustment based on those rapidly-increasing expenses on rent-stabilized properties.”
Like others in favor of the rent increases on the higher side of the percentage range, Martin expressed concerns about inflation, property taxes, and costs of maintenance. He also connected the RGB vote, the 42,000 vacant rent-stabilized units, and the city’s larger housing crisis.
“We need more housing. We absolutely need more housing. We need to be incentivizing development of new housing and getting new housing back on the market,” he said. “We need to be getting these units that need proper renovation back on the market.”
Martin said that tens of thousands of those 42,000 vacant rent-stabilized units are offline because they need major repairs and due to the 2019 state law there is not enough incentive for building owners to fix those apartments up and get them rented.
The final meeting where the board is set to vote will be live streamed via YouTube on June 21 at 7:30 p.m.
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Natalie Rash, Gotham Gazette
@GothamGazette
New City Budget Incrementally Expands Composting Programs as Council Considers Citywide Mandate
Community composting (photo: William Alatriste/City Council)
When Mayor Eric Adams was running for City Hall, he pledged to expand the city’s incipient residential curbside composting program. But despite a push for more by some City Council members, the recently approved $101 billion budget for next fiscal year, beginning July 1, only marginally increases funding for other composting programs while halting the promised expansion of residential curbside composting.
The city’s voluntary curbside composting program has moved forward in fits and starts. Organics account for about a third of the city’s waste and are a major source of greenhouse gas emissions. Unless diverted for composting, the waste is trucked out to landfills where it decomposes and releases methane, which is about 25 times more potent than CO2 in warming the planet.
The curbside composting program launched in 2013 and, under former Mayor Bill de Blasio, was expanded to seven community districts in total – four in Brooklyn, two in Manhattan, and one in the Bronx – out of 59 in the city. But it was put on hold in 2020 as de Blasio made cuts to city spending because of the pandemic, along with initiatives including the school composting and food scrap drop-off programs, which all resumed last year.
De Blasio had originally promised that the curbside program would eventually be expanded citywide as part of the goal he set in 2015 of sending zero waste to landfills by 2030 (which was part of the de Blasio administration’s larger OneNYC 2050 strategy aimed at achieving carbon neutrality by the half-century mark).
But the Adams administration expressed concern that low participation in the program didn’t justify the cost of running it, and that a citywide expansion required further study.
Consequently, the program received no new funding in the budget agreement between the mayor and the City Council, which included about $32 million in total for organics collections programs – including about $12 million for curbside collection, $7 million for organics drop-off sites (an increase of $3.5 million), and $9.2 million to expand the school organics collection program to every school in the city over the next two years and add 100 “Smart Bins” near schools for the public to drop off organics waste, and $2.9 million for the Zero Waste Schools Educational Program & Stop’N’Swap programs.
Sanitation, including restoring and expanding the composting program, was a major budget issue in the City Council this year, and several Council members mounted a full-court press to urge the administration to provide adequate funding for it. For those members, it was not only a quality of life and cleanliness issue but also a public health, climate, and environmental justice issue, and one that was intrinsically tied to the city’s zero waste goal.
While the city is making little progress toward the zero waste goal, the City Council is considering a package of legislation to help get there.
Council Member Shahana Hanif, a Brooklyn Democrat, has introduced legislation to create a citywide curbside organics program for residential buildings. Council Member Sandy Nurse, also a Brooklyn Democrat and chair of the Council’s sanitation committee, has introduced bills to enshrine the zero waste by 2030 goal into law and require regular reporting on progress by the administration. And Council Member Keith Powers, a Manhattan Democrat, has introduced bills to mandate that the Department of Sanitation establish at minimum one community recycling center and at least three organics drop-off sites in each community district.
Nurse believes that mandatory composting would address the administration’s concerns about the viability of a citywide program. “We think that's the better route to go rather than continuing to then spend months advocating for money to expand the program that really does need some rethinking,” she said in a phone interview. Nurse is a co-sponsor of Hanif’s bill, which also has the backing of a supermajority of the Council.
As Nurse noted, some of the issues around participation stem from the previous administration’s faltering steps to expand the program. “We had a program that started and stopped, started and stopped, and then was gutted during the pandemic. So we have an inefficient program that has very low participation,” she said. She decided that a legislative solution would be far better and immune to the vagaries of mayoral administrations.
A mandatory program, she said, would require building managers to provide composting services in residential developments where they would otherwise be hesitant to opt-in to a voluntary program. And it would force a change in culture, making it a habit for New Yorkers (like required recycling of glass, aluminum, and other materials), raising awareness of the program and allowing fines for failure to comply.
The New York City Independent Budget Office estimated in an October 2021 report that a universal composting program could, in fact, save the city money over time. Collection and composting costs would rise by about $39 million in total in the first three years, over the $775 million annual cost of collecting and disposing of refuse, recycling, and organics waste in 2019. But, the expansion would begin to generate savings four years out and, eventually, the city would save about $33 million every year, the IBO estimates.
The savings would come from larger amounts of refuse being collected in the same truck runs (which have fixed costs) and from reducing the number of truck runs as organic waste is diverted from the waste stream. The city would also have more leverage to negotiate lower costs with organics processing companies if the program is scaled up.
In a recently-released survey about city sanitation services, conducted by Comptroller Brad Lander’s office, about 67% of more than 3,000 respondents said that they wanted their organic waste to be collected and composted by the city.
“The legislative route, I think, is the best option,” said Nurse. “It is a very costly program if we don't have people using it to the degree that we need to justify it.”
At a Council hearing on the zero waste bills on Wednesday of last week, the mandatory nature of the proposed program became a point of contention as Council members heard testimony from sanitation officials.
“I believe that you have to give people voluntary access to curbside food waste collection, and allow them to develop the muscle memory of separating out their food waste material before we contemplate mandatory programs,” Sanitation Commissioner Jessica Tisch, an appointee of Mayor Adams, said at the hearing. “Food waste separation requires complex cultural change that cannot, in its first instance, be strictly punitive.”
Tisch shared the Council’s urgency around reaching the zero waste goal, but said it appears unlikely on the 2030 timeline. She noted that the city's waste diversion rate has only increased from 17.8% in 2015 to 20.8% this year, placing the city far off track in bridging the gap to achieve 100% diversion in the next seven years. “We are simply not on a path toward zero waste by 2030 on our current trajectory, nor do we have enough time left, in my opinion, before 2030 for me to sit here today and genuinely tell you that I think that the goal is achievable,” she said.
Tisch’s statements are echoed in data trends seen across DSNY Waste Characterization Studies from 2005, 2013, and 2017 (the commissioner also noted a new study would be produced by 2024 using funding from the fiscal year 2023 adopted budget). While in 2017, DSNY found that waste generated was declining in comparison to 2005 and 2013, the decrease was not sizable. At 3.1 million tons of waste in 2017, and an only 400,000 ton decrease over 12 years, the road to zero waste appears blocked but for drastic measures.
Hanif said at the hearing that an opt-in program doesn’t meet the moment. “An opt-in system that is disproportionately available to higher-income and whiter neighborhoods is not economically sustainable, and fails to reach the environmental impact that the current crisis moment demands,” she said.
Besides the curbside program, the Council also wants to expand other aspects of organics collection. Powers’ bills, which he has dubbed the Community Organics and Recycling Empowerment (CORE) Act, would address the need for more organics drop-off sites and community recycling centers.
There are currently 223 drop-off sites across all five boroughs, aimed at providing easy local access to composting for community members. They allow communities to dispose of organic waste, such as food scraps (excluding meat, fish, and dairy), at designated bins. But those bins are not equally distributed across the city’s 59 community districts. Large parts of Queens, Brooklyn, and the Bronx, for instance, don’t have drop-off sites.
In Astoria and Lower Manhattan, high-tech drop-off composting sites exist as part of the Smart Bins pilot program which was launched in the fall of 2021 and is being expanded under the new city budget. The sites are open 24/7 and do not require staff. The bins are only for use by community members, a measure upheld by lock systems on the bins that can only be opened with DSNY-issued key cards or a mobile app.
The majority of drop-off sites, however, have limited hours, some only running on a seasonal basis. Many other sites are not located close enough for community members to easily access by walking, instead requiring travel by car, deterring would-be composters from making the trek towards sustainability.
At the hearing, Tisch said that, with the rollout of 100 additional smart bins this year, the city would meet the requirements of Powers’ bill to put three drop-off sites in every district by the end of 2022.
“I do think a hundred is insufficient," Powers responded, "but I'm glad we're starting."
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Jiada Valenza contributed to this story.
New City Budget Includes Some Added Funding to Implement Landmark Building Emissions Law
A rally for green jobs outside City Hall (photo: Jeff Reed/City Council)
In 2024, New York City will begin capping emissions from the city’s largest buildings – which are its worst polluters – under Local Law 97, which was approved as part of the city’s Climate Mobilization Act of 2019. The law requires buildings to be retrofitted with energy-efficient and sustainable systems – upgrading heating and cooling systems, possibly installing solar energy, for instance – to significantly reduce their carbon footprint to meet those emissions caps, or otherwise face hefty fines.
But the city has just over six months to issue rules and regulations for property owners and managers to follow, and activists and officials say that the recently approved city budget falls short of what the city’s Department of Buildings will need to accomplish that task.
There are 50,000 buildings in the city over 25,000 square feet each, which in sum account for about 71% of the city’s emissions. Local Law 97 will require that those emissions are cut by 40% by 2030 and by 80% by 2050, a major step in reaching the long-term overarching goal of a net-zero carbon city.
The first set of caps, for about 20% of the city’s biggest buildings, will be effective starting in 2024, and stronger limits will be instituted in 2030, affecting 75% of those buildings. Besides cutting pollution, the law will directly lead to thousands of jobs from construction to building design and renovation — part of why it has been billed by some as a key part of the city’s version of a “Green New Deal.”
Elected officials and activists spent months pressing Mayor Eric Adams, a first-year Democrat, to wholly commit to implementing and enforcing the law, in particular by providing funding for additional staff at the Department of Buildings (DOB), which will play a key role. The law created a new Office of Building Energy and Emissions Performance at DOB, tasked with calculating emissions formulas and setting emissions limits, among other roles, much of which will require formal rulemaking through a public review and input process that has not yet begun. (The city also has a separate program called Property Assessed Clean Energy which helps property owners finance energy upgrades and renewable energy projects).
Officials and activists argued that the new office would be unable to do its job effectively unless its current complement of six full-time staff was boosted by another 10-15 workers.
Asked about that demand on Earth Day, April 22, Adams said, “We're still in the budgetary talks, still in conversation. So many people will say, ‘Well, you know what, Eric is not going to be aggressive about that.’ Wrong. I'm going to be extremely aggressive about it. I did not start as mayor talking about improving our environment. This is something I'm committed to, I'm going to continue to do so.”
The final $101 billion budget for the 2023 fiscal year, which begins July 1, agreed upon by Adams and the City Council includes $400,000 in additional funding for five more staff members at the Office of Building Energy and Emissions Performance (BEEP). According to the mayor’s office, that allocation was based on DOB’s assessment of its staffing needs. The mayor’s office also said the budget added $2 million to support the BEEP office’s work, which includes monitoring building energy use and emissions, creating an online portal for the submission of building assessments, auditing assessments and inspecting buildings, among other responsibilities.
The mayor and his administration have raised several concerns about the building emissions law, especially its penalty structure, which they say could be overly punitive even as building owners attempt to comply with it. He has said his goal is to see compliance, not fines.
But, to activists, the mayor has been parroting allies in the real estate industry, which has similarly argued against the enforcement mechanisms of the law and questioned the timeline of the mandates. A group of property owners and managers have already filed a lawsuit against the city over the law, calling it “ill conceived and unconstitutional” and its penalties “draconian,” according to a City Limits report.
“What we're continuing to see is the administration double-talking about the implementation and enforcement of the law, which is really disappointing and echoes the real estate industry’s talking points,” said Pete Sikora, climate and inequality campaigns director for New York Communities for Change, a nonprofit advocacy group that pushed hard for the passage of Local Law 97.
Sikora said the addition of five staff to BEEP was a “minimal” step towards implementing the law.
“The mayor needs to disabuse himself of the notion that he can satisfy the real estate lobby and produce jobs and cut pollution,” he said. “You can't square that circle. You're either on one side or on the other side, and it is time to pick the right side for working people in the city.”
At an April 13 hearing on Local Law 97, the city’s Chief Climate Officer and Commissioner of the Department of Environmental Protection Rohit Aggarwala told the City Council, “We have no intention of giving anyone a free pass or letting anyone off the hook. But we also see no benefit to the environment in punishing someone who is actually doing everything possible.”
Adams has also insisted that the city needs to make it easier for building owners to retrofit systems and make energy upgrades. “Fines don’t serve the goal of GHG reductions, but retrofits and upgrades create jobs,” a mayoral spokesperson told Gotham Gazette in March. “That is why [the mayor] has supported City subsidies to assist property owners in need with the cost of retrofitting and called for significant investment in retrofitting the City’s own buildings as part of a broader strategy to ensure NYC is a national leader in reducing carbon emissions and in creating a green economy.”
Comptroller Brad Lander, who co-sponsored Local Law 97 when he was a City Council member, has also been calling on the administration to continue increasing funding for its implementation. “I am encouraged to see some additional funding in place for the implementation of LL97 at this critical time, but we have a long road ahead towards ensuring effective implementation and compliance,” he said in a statement to Gotham Gazette. “As we move closer to the first compliance period in 2024, it is critical that the city continue to expand the resources to implement this landmark law and enhance programs that can support building owners in their compliance.”
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by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
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