In October, New York City enacted the lowest rent increases in the 46-year history of the City’s Rent Guidelines Board. The only positive result to come out of last year’s Rent Guidelines process was the evasion of a rent freeze that many thought was inevitable. In Teaneck, New Jersey however, a rent freeze was not avoidable.
As a result, many property owners are seeking legal action to nullify the rent freeze that the city has imposed. One particular owner has called the rent freeze “arbitrary, capricious and unreasonable, and otherwise contrary to the laws and standards applicable to rent control regulations.” Owners have rejected the notion of a rent freeze for obvious reasons: building operating costs are not being frozen and are actually continuing to rise. Some of the Teaneck City Council members have admitted that they were motivated to vote for a rent freeze simply as a result of sympathy for tenants while others, rejected a motion for a rent freeze with the understanding of rising costs for owners.
As we approach another Rent Guidelines process, we patiently await as Mayor Bill de Blasio is expected to make new appointments to the City Rent Guidelines Board. Last year, Mayor de Blasio appointed five new members to the board, including the chairperson. It is expected that Mayor de Blasio will once again campaign for a rent freeze this year. Avoiding a rent freeze this year will be much more difficult, considering the possibility that all nine members of the RGB could be influenced by the Mayor’s requests.
Should these predictions become reality, it will be a much bigger battle than last year to avoid a rent freeze. As a result, we could end up in a very similar situation as property owners in Teaneck. If operating costs continue to rise, the RSA and the entire housing industry will have a legitimate argument that will justify the need for rent increases.