De Blasio: “the rent freeze speaks for itself”. Really?

Democratic mayoral candidate Bill De Blasio has maintained his call for a rent freeze on one million stabilized apartments next year. A De Blasio spokesman told Crain’s New York, “the rent freeze speaks for itself”.

But De Blasio was FOR a rent increase before he was AGAINST a rent increase. During this year’s Rent Guidelines deliberations, De Blasio was quoted as being in favor of a rent increase for small property owners. After being pummeled by the other Democratic candidates for his stance, De Blasio switched his position and called for zero rent increases across the board. Bill De Blasio is a smart man and his initial position on rent increases probably recognized the fact that most property owners would need a rent increase as long as city taxes, oil, insurance and other operating costs continue to escalate. If De Blasio is elected Mayor, we will soon know whether he remains mired in campaign rhetoric or whether he has the courage to stand up to his supporters and do what is necessary to maintain affordable housing in New York City.

Rent-Freeze Pledge Chills Landlords

De Blasio Proposal Would Affect More Than One Million in Stabilized Apartments

By JOHN SURICO

Among the policy proposals pushed by Democratic mayoral nominee Bill de Blasio to make New York City more affordable is one that would affect more than one million residents: a moratorium on rent increases in rent-stabilized apartments.

A so-called rent freeze hasn’t happened in the 44-year history of the Rent Guidelines Board, a body of nine mayoral appointees that sets monthly rates for a million apartments. The idea is opposed by Republican nominee Joe Lhota and the city’s real-estate community, with which Mr. de Blasio is friendly.

The next mayor will have significant leverage over the rent board when he takes office on Jan. 1, with power to appoint four new members. Mr. de Blasio has said he would select what he described as pro-tenant, pro-stabilization board members.

A spokesman said Mr. de Blasio would push the board to not increase rent in June, when it votes annually. The rent-freeze would then start in October for one-year leases and two-year leases being renewed.

“In the short term, with wages stagnant and tenants struggling to pay the rent, Bill de Blasio has called for a one-year rent freeze for people living in rent-stabilized apartments,” De Blasio spokesman Dan Levitan said. “I think the rent freeze speaks for itself.”

A spokesman for the Rent Guidelines Board declined to comment.

[image]Landlords said they would fight a rent freeze. Jack Freund, vice president of the Rent Stabilization Association, an organization that represents thousands of city landlords, said a rent freeze should be accompanied by a freeze on municipal sewer and water charges and no increases in property taxes. (Messrs. de Blasio and Lhota have pledged to not raise property taxes.)

“Bill is not too smart backing this,” Mr. Freund said. “I’m not sure if this is campaign rhetoric but he will recognize the reality if and when he takes office.

In an interview, Mr. Lhota also said a rent freeze is hard to imagine with rising utility costs and property taxes.

“There’s no equity there. If you’re telling me that that’s going to be controlled, sure, I’d be for a rent freeze,” Mr. Lhota said. “But if that’s not proven, I can’t agree to a freeze because it’s not fair.”

Mr. Lhota said he would work to control rents by reducing property taxes and what the city charges landlords for utilities such as water and sewage.

“This is how mayors can get directly involved,” Mr. Lhota said.

Messrs. Lhota and de Blasio have also both advocated for the power to change rent regulations to return to City Hall. The rent-stabilization laws are currently set by the state Legislature and the governor in Albany.

The mayoral campaign is taking place after a nine-year period during which rent-stabilized rents went up faster than market-rate rents.

From 2002 to 2011, the median gross rent of a rent-stabilized apartment went up 66%—from $703 to $1,160—under increases approved by the Rent Guidelines Board, according to the New York City Housing and Vacancy Survey. At the same time, the median gross rent of market-rate apartments went up 60%, from $942 to $1,510, according to the survey.

This year, the Rent Guidelines Board voted to increase rent by 4% for one-year leases and 7.75% for two-year leases. The increases went into effect Oct. 1.

Manhattan and Brooklyn have been deemed the two most expensive places to live in the country, as New Yorkers doled out nearly 33% of their incomes in 2011 to pay to live in these parts of the city.

Neither Mr. de Blasio nor Mr. Lhota have revealed whom they would appoint to the Rent Guidelines Board.

Tenant advocacy groups have long called for a rent freeze but have never found themselves with an advocate such as Mr. de Blasio, who has made reducing income inequality a central theme of his campaign.

City Council Speaker Christine Quinn and Comptroller John Liu, two of Mr. de Blasio’s opponents in the Democratic primary, also supported a moratorium. Mr. de Blasio hasn’t spoken much about the rent-stabilization issue since he moved on to the general election.

“[A rent freeze] would bring a great deal of relief to renters in rent-stabilized apartments, while having negligible impact on landlords,” said Michael McKee of the Tenants PAC, a group that advocates for renters.

A version of this article appeared October 10, 2013, on page A22 in the U.S. edition of The Wall Street Journal, with the headline: Rent-Freeze Pledge Chills Landlords.

 

Source: Wall Street Journal

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