New York City property owners know all too well how costly and difficult the COVID-19 pandemic was for many in the industry. Considering the double-whammy of inflation that swiftly followed, the financial toll has been a struggle for some.
Preliminary rates set
Now, the owners of approximately one million NYC rent-stabilized units await the final decision on annual rental rate increase numbers, which the NYC Rent Guidelines Board (RGB) will announce on June 21, to begin Oct. 1, 2023. At a May 2 meeting, the Board set preliminary rates of 2-5% for one-year leases and 4-7% for two-year leases.
Those rates would apply to rent-stabilized apartment leases entered between Oct. 1 and Sept. 30, 2024.
Earlier, the Board had suggested a 15.75% rental rate increase based on the findings in one annual report.
Property owners have real costs
Property owners generally favor rate increases to help cover maintenance and repair needs as well as to pay down ongoing debt. Maintenance is a real expense considering that more than half of rent-stabilized units were built before 1974, according to New York University Furman Center, as reported by the Amsterdam News. The article also notes that while Mayor Eric Adams recognizes the financial needs of landlords, he feels that a 7% increase is too much for renters.
However, Amsterdam News quotes Jay Martin, executive director of CHIP (Community Housing Improvement Program, an advocacy organization and trade association for owners and managers of multi-unit housing in NYC) as saying, “Even the highest end of these ranges will not put a penny in rent-stabilized building owners’ pockets … Every single cent of the proposed rent adjustment will go to property tax payments, maintenance, skyrocketing insurance, and mandatory upgrades to buildings.”
In the weeks leading up to the final rate announcement, many more public meetings will provide opportunity for input to the Board. Previous meetings have been contentious. We will carefully monitor all related developments for our property owner clients, and report the final decision on annual rate increases for one and two year leases.