Mayor Wants Freeze, But Rent Guidelines Board is Meeting Online

Amid a pandemic and despite the mayor’s support for skipping this year’s rent-setting process, the New York City Rent Guidelines Board is beginning its annual consideration of how to adjust rents in the city’s nearly 1 million stabilized apartments.

The first online meeting was at 9:30 a.m. Thursday.

Additional online meetings are planned for April 30, May 5 and May 7. Details on additional meetings are still to come. Last year, as is typical, the board held five meetings in Manhattan through April and May, then four hearings in four boroughs in June, before taking their final vote in late June.

Mayor de Blasio has called for a rent freeze on stabilized tenants this year in light of the public-health emergency, and proposed that be accomplished by simply skipping the RGB process. He called for the state to suspend the RGB’s activity, but that has not yet occurred.

Right now, the only protection in place for tenants is a 90-day moratorium on evictions for failure to pay. But any rent not paid during the 90 days would be due immediately afterward.

The decision to hold at least the first meetings online upset tenant advocates.

“With almost 2.5 million rent stabilized tenants across the city, a rent increase could result in mass housing court evictions cases and displacement in communities across NYC once the historic eviction moratorium is lifted,” the Rent Justice Coalition said in a statement on Wednesday night. “Tenants have expressed concerns about their ability to participate in this year’s public process if hearings were to be held online.”

The RGB is a nine-person board whose members are all appointed by the mayor; two members explicitly represent tenant interests, and two others represent landlords. The board is supposed to take into account the economic conditions affecting tenants and the financial situation of landlords in issuing its annual guidelines for one- and two-year lease renewals occurring during the year beginning the following October.

The six RGB rent decisions so far under de Blasio are the six smallest hikes approved by the board in its 52-year history. After a record-low 1 percent hike on one-year leases in 2014, the board implemented a rent freeze for the next two years, before OKing a 1.25 percent hike in 2017 and 1.5 percent increases the past two years.

The relationship between the RGB’s hikes and the rents tenants face has never been simple, however. Landlords, primarily those in neighborhoods with softer rental markets, might charge less than the legal rent. Major capital improvements (MCIs) can lead to larger rent increases in particular buildings.

Last year’s rent reforms curtailed the extra increases landlords might impose, and early evidence suggests the number of those increases has shrunk. According to the state Division of Homes and Community Renewal, the number of new MCI applications from October 2019 through February 2020 was less than half of what came in the same period a year earlier. Over the 2019-2020 period, DHCR approved 57 percent fewer MCI applications, and denials nearly quintupled.

The impact of the new rent laws on landlord finances will not be known with any precision for another year or two. RGB relies on data with a lag to make its decisions. According to that research, landlord’s net operating income dropped slightly in 2017-2018 (by 0.06 percent)–the first drop since right after September 11.

While the mayor has called for a rent freeze, other officials are backing the cancellation of rent through a state or an order of the governor.

De Blasio’s proposed freeze would cover the entire year, not just 90 days. It would not, however, shield tenants who cannot afford any rent now because they’ve lost a job or income, and it wouldn’t apply to non-stabilized apartments.

Meanwhile, tenant advocates are pushing for complete elimination of MCIs and the rollback of MCI charges imposed over the past seven years. They argue that last year’s changes did little to help low-income tenants who have already been pushed to the brink by past MCI increases, which are embedded in their legal rents forever.