A New York City panel that regulates the rents for roughly one million rent-stabilized apartments approved the highest increases in almost a decade on Tuesday, after property owners said they were being pinched by taxes and rising expenses.
At a raucous meeting at Cooper Union in Manhattan, the Rent Guidelines Board voted 5 to 4 to raise rents on one-year leases by 3.25 percent in rent-stabilized homes, and on two-year leases by 5 percent.
Many tenants argued for a rent freeze or rollback, while landlords were seeking even higher increases, but the panel had signaled its intent to support a middle-ground approach at a meeting last month. The increases affect roughly two million New Yorkers.
New York City, already one of the most expensive places to live in the nation, has seen the cost of living rise amid a rebound from the worst of the pandemic. Soaring inflation has hit tenants and property owners, and the effect on landlords’ ability to maintain buildings was one of the major factors that the board considered. But the vote also intensified concerns about the shortage of affordable housing and the sustainability of the city’s recovery.
The auditorium on Tuesday was filled with dozens of people wearing brightly colored orange and yellow T-shirts that declared their membership in different tenant organizations. Their piercing whistles, pounding on chairs, screams and chants of “housing is a human right” reverberated throughout the room, at times completely drowning out the board members’ voices.
As the board chair, David Reiss, outlined the reasons behind the increases, dozens of people stood up, turned their backs to him and chanted, drowning him out.
The annual vote is always fraught and draws intense protests and lobbying from advocates for both tenants and landlords. But this year’s meeting came after tens of thousands of renters lost their jobs and struggled to make payments during the pandemic.
It was also the first vote to take place during Mayor Eric Adams’s administration, and the board took a different approach than it had under his predecessor, Bill de Blasio. The panel is effectively controlled by the mayor, who appoints all nine members — five representing the public, and two each for tenants and landlords. While Mr. Adams has said that he lobbied the board to adopt lower increases, he has also expressed sympathy for small property owners who need rental income to compensate for rising expenses.
“The determination made by the Rent Guidelines Board today will unfortunately be a burden to tenants at this difficult time — and that is disappointing,” Mr. Adams said in a statement after the vote.
“At the same time,” he added, “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.”
Mr. de Blasio had focused more on renters’ costs. During his tenure, the highest annual increases approved by the board were 1.5 percent on one-year leases and 2.75 percent on two-year leases. Inflation was also relatively low during his administration.
The last time there was a significant increase — 4 percent on one-year leases and 7.75 percent on two-year leases — was in 2013, when Michael R. Bloomberg was mayor.
The increases approved on Tuesday will apply to leases that begin on or after Oct. 1.
New York City’s rent-stabilization system, first put in place in the late 1960s, remains a crucial source of affordable housing.
The median income for people living in rent-stabilized homes is about $47,000, compared with $62,960 in unregulated homes, according to a recent city survey. The median monthly rent for rent-stabilized apartments is $1,400, according to the survey, compared with $1,845 for unregulated homes.
And stabilized rents stand in stark contrast to the exorbitant prices seen in recent months in some part of the city: The average rent on an apartment newly leased in Manhattan in May was $4,975 a month, a 22 percent increase from the year before, according to a report by the real estate firm Douglas Elliman.
The outcome on Tuesday was a blow for tenants, many of whom were struggling to pay their rent even before the pandemic. Housing advocates had lobbied aggressively in the last several weeks for the board to reverse course and support a rent freeze or rollback.
Mei Xia Yu, who has lived in her two-bedroom rent stabilized apartment in Chinatown for 15 years, said after the vote that her “heart is very unsettled.”
“It added way too much,” she said. “No one can afford it.”
Adán Soltren, who was appointed to the board this spring by Mr. Adams and is one of two tenant representatives who voted against the increases, called the decision to support them “unjust.”
“Your decision will result in millions of people suffering while corporations and investors continue to profit,” he said.
At the panel’s public hearing last week in the Bronx, more than 60 of roughly 70 speakers were tenants, tenant advocates and elected officials who argued for a rent decrease or a rent freeze. Many of the speakers grew emotional during their testimony, expressing hopelessness in the face of any increases and frustration over the poor conditions in their homes.
The increases approved on Tuesday also disappointed landlords, who said that buildings would deteriorate without additional rental income to make up for the increased expenses.
“We are risking the decay of rent-stabilized housing,” said Christina Smyth, one of two members representing landlords who had supported a higher increase, but ended up voting with the majority.
Landlords have said they are being squeezed by tough new laws passed in 2019, which restricted their ability to raise rents when an apartment became vacant or was upgraded.
Bryan Liff, a landlord who testified at the meeting last week, pushed for rent increases of at least 8 percent, and said rental income was already too low to bring many units up to livable standards. But he said he was “demoralized” by what appeared to be a foregone conclusion on behalf of tenants, and that “decisions seem to be based on who screams the loudest.”
Both Mr. Adams and landlord groups have keyed in on the difficulties experienced by “mom and pop” landlords when arguing in favor of rent increases.
But because existing laws make it difficult to determine who actually owns any given building, it is not clear how many of the owners of rent-stabilized homes are actually smaller property owners versus landlords with much larger and more diversified portfolios.
One rough analysis conducted by the staff of the board in June 2020 suggested that more than 61 percent of rent-stabilized units were owned by landlords that owned 10 units or fewer.
But a separate analysis of property records released last week by the group JustFix.nyc, a technology company that tracks property ownership, suggested just the opposite: that more than 60 percent of rent-stabilized homes are owned by landlords with portfolios of more than 1,000 units overall. In contrast, about 1 percent of rent-stabilized units are owned by landlords that own fewer than 10 units overall.
“The data unequivocally shows that large landlords own the vast majority of rent-stabilized housing in New York City,” the group said last week.
Tea Kvetenadze contributed reporting.