The Rent Guidelines Board in action (photo: William Alatriste/NYC Council Media Unit)

Last week, the New York City Rent Guidelines Board raised rents by 3% for one-year leases and roughly 4.5% for two-year leases for 1 million rent-stabilized apartments. Meanwhile, the Nassau County, Westchester County, Rockland County, and Kingston Rent Guidelines Boards approved either rent freezes or much smaller increases. What gives?

Part of the answer is that there are unique features to the New York City Rent Guidelines Board structure that need to be rethought.

Every April through June, the New York City Rent Guidelines Board (RGB) spends three months deciding if, and by how much, rents will go up for 2 million New Yorkers. This decision-making process is punctuated by the publication of eight (dry, data-driven) reports and at least four (boisterous) public hearings. 

These three months uniquely bring the intricacy of government processes to the foreground. There aren’t many institutions like the RGB, which makes major dollars-and-sense deliberations in public each year. And while RGB members and staff work hard to ensure the process is fair, the Board is in dire need of reform.

First, the RGB carries an air of impartiality, with its mission ostensibly to “consider research from staff, and testimony of owners, tenants, advocacy groups and industry experts” to arrive at its decisions. Unfortunately, it is naïve to pretend that any body with decision-making power over real estate profits – and particularly one whose members are selected by a single politician – could function without political influence.

New York City’s RGB is structurally beholden to the mayor, who appoints all nine members. Historical rent adjustments have tracked political allegiances of New York City’s mayors over time. Consider, for example, the cases of the RGB under Mayors Bloomberg and de Blasio: under Bloomberg, the average rent increase for a one-year lease was about 4%; under de Blasio, it was less than 1%.

Second, the Rent Guidelines Board’s staff, advocates (like us at the Community Service Society), and many others generate a ton of data each spring, all to help the Board to make a “fair” call about rent adjustments. But a ton of data doesn’t necessarily yield a better-informed decision, especially when the data is out of date or of questionable provenance. RGB staff are forced to rely on two- to three-year-old data, because of reporting lags.

Last year, the Board agreed to unreasonably high rent hikes, justified by housing market numbers from 2020, underscoring how stale data can lead to questionable decision-making. Further, some of the Board’s most crucial numbers rely on landlord self-reporting. When the Board last audited these filings, in 1992, they found that landlords were inflating their data by 8%. 

Most crucially, the data analyzed by the Board generally skews toward maintaining landlords’ profits. While the RGB’s staff does publish the latest income, employment, and human services data in an annual Income and Affordability Study, that data only has an impressionistic impact on the Board's deliberations. Early in the process, the RGB publishes what are called “commensurate rent adjustment formulas,” based in part on a “price index of operating costs” methodology that no other Rent Guidelines Board in the state uses. This shows what kind of increases are necessary to keep landlords’ net operating income steady compared to the previous year. These formulas set the ground for the conversation, without consideration for tenant conditions. In fact, there is not a comparable, easy to quote, tenant number for Board members, the public, and the press to latch onto.

And while tenant demonstrations at the public RGB hearings generally make the news, how much of an impact do tenants’ testimonies and protests really have on how much their rents will ultimately increase? The public hearings are always scheduled after the Board takes a preliminary vote, where they set the parameters for what the annual rent hikes may be. This year, in early May, the RGB approved a maximum rent increase of between 2% and 5% on one-year leases and 4% and 7% on two-year leases. After they set the parameters for a rent increase, they heard from hundreds of tenants about why the rent shouldn’t rise at all.

Most needed improvements to the New York City RGB require state action. Next year, Albany lawmakers should:

-Institute a measure of checks and balances, by giving the City Council confirmation powers over RGB appointments. The RGB’s set-up is fairly unique. Other Rent Guidelines Boards in other parts of the state and other politically-appointed boards in New York City do not concentrate appointment and oversight power with one individual in the same way.

-Move the RGB process – and therefore also the effective date for rent adjustments – to the fall, when more recent NYC Department of Finance data is available for the Board Staff to analyze.

Meanwhile, the NYC RGB staff should:

-Modernize its commensurate adjustment formulas and develop a comparable tenant formula.

-Regularly audit data provided by landlords and institute tougher penalties for falsifying data or failing to register apartments.

We cannot keep trying the same thing and expecting different results. If the RGB cycle remains the same next year, we will go through the same motions but will face all the same structural challenges. Yes, the data will be different; there may even be some new faces on the Board. But does anyone truly believe the outcome will be dramatically different, as long as all the other conditions remain the same? If lawmakers want a better outcome, they must change the process. 

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Oksana Mironova and Samuel Stein are Senior Policy Analysts at the Community Service Society. On Twitter @OksanaMironov & @CSSNYOrg.