RGB Approves Historically Low Rent Increases, but Rejects Rent Freeze Backed by Mayor De Blasio

A historic Rent Guidelines process has finally come to an end. Although the process typically begins in March, it felt as if this year’s RGB process began last summer when Mayor Bill de Blasio, then Public Advocate, promised to fight for a rent freeze while campaigning. Mayor de Blasio kept a low profile throughout the entire Rent Guidelines process this year until one week before the vote when he stated that the members of the Rent Guidelines Board should “look at a lot of information and decide what makes sense first and foremost based on the actual facts, the actual numbers.” On June 23rd, the morning of the Final Vote, the Mayor disregarded his previous statement and once again came out supporting a rent freeze, urging the members of the RGB to approve zero rent increases. Despite the pressure from the Mayor and dozens of City elected officials, the RGB voted 5 to 4 in favor of the following rent increases:

For a one-year lease: 1%

For a two-year lease: 2.75%

Yes, the increases are the lowest in the 46-year history of the Rent Guidelines Board, but a rent freeze seemed imminent for a board consisting of six members appointed by Mayor de Blasio earlier this year. The proposal for these guidelines were submitted by RGB Public Member Steve Flax, a de Blasio appointee, and were then placed on the table for a vote by Owner Member Magda Cruz. Despite being outraged that his proposal was suggested by the Owner Members, Flax went with “his conscience” and voted in favor of the increases.

The four members of the board who voted against the hikes, which included RGB Chair Rachel Godsil, stormed off of the stage in disbelief as tenants and tenant advocates made their way to the front of the room to protest the decision. Immediately following the vote, Mayor de Blasio released a statement declaring that although a rent freeze was not approved, the lowest increases in City history was a step in the right direction for tenants. Just two days later, however, the New York Post reported that de Blasio was “furious” that the RGB was not able to vote in favor of a rent freeze with a spokesman stating the Mayor was “off the wall” over the decision.

Tenants, many of whom thought the vote for a rent freeze was locked up, were also livid with the vote despite receiving the lowest rent raises in City history. What tenants and the Mayor continued to ignore were the rising costs for owners that was summarized by a 5.7% increase in total building operating costs. Avoiding a rent freeze is in fact a victory, but we must remember that these miniscule percentage increases do not come close to the rising costs that owners face when maintaining their buildings. So while small property owners are going to continue to struggle maintaining their buildings with rising costs and tiny rent increases, Mayor de Blasio, who is preparing to move into Gracie Mansion, is planning on renting out his Park Slope home while he lives on the taxpayer’s tab for at least the next three and a half years. According to a source, de Blasio could receive at least $5,000 per month while renting his home and possibly much more. Not only will de Blasio collect rent payments on his actual home, but will continue to collect rent on a two-family rental that he owns. According to the article, annual rental income on that property rose from $47,500 in previous years to $52,000 last year. For at least the next year, owners of rent stabilized units will struggle to preserve the City’s affordable housing stock with 1% increases while the Mayor continues to benefit from unlimited market rents.

So while owners are subject the smallest rent increases in City history, we must not forget that tireless efforts from the RSA, its members, other organizations and owners in the housing industry made to dodge the City’s first ever rent freeze. The politicking by Mayor de Blasio this year is a clear indication that he will continue to fight for a rent freeze in future Rent Guideline processes, especially since all nine members of the RGB will be his appointees beginning next year. Because of this, the fight to earn reasonable rent increases for owners next year has already begun. The RSA will not take a back seat after this recent victory and neither should RSA members.