Low-income tenants may find themselves swamped by pass-along rent increases as the result of a steep new hike in the taxes landlords pay on water and sewer lines.
On June 30, city building owners began paying a 6.5 percent increase in the fees, which are one of the most steadily rising housing expenses in New York City. This year’s hike follows a five percent increase just last year. Much of it is due to the upgrading of sewage plants in an effort to meet water quality standards, according to the Rent Guidelines Board. Although renters in regulated apartments will not face extra hikes immediately from sewer and water costs, people living in unregulated units and co-ops will pay most of the increase out of their pockets.
Ann Henderson, senior program director of the Urban Homesteading Assistance Board, said the low-income residents of limited-equity co-ops–rehabbed by the city and sold to tenant associations–will suffer the most. “Having this kind of trend has a significant impact on low-income people,” she said. “The people in the building’s incomes aren’t going up but the maintenance cost is.”
“Anytime you raise operation expenses in a building that is operating on a very narrow margin, you run the risk of the landlord not being able to maintain the building,” concluded Michael Schill, director of Real Estate and Urban Policy at NYU Law School. “If you can’t raise the rent, one way to save money is by cutting maintenance costs.”