Let’s make one thing clear off the bat: Raising rent by any amount, anywhere, hurts renters, especially lower-income tenants who are already struggling with rising costs of living. The impact of even modest increases is deeply felt by those for whom every dollar is arduously allocated — especially now that, with inflation skyrocketing, those dollars aren’t going nearly as far as they used to at the pharmacy or the grocery store.
Still, those same rising prices are driving up the cost of maintaining rental properties. After about a decade of very low stabilized rent hikes or outright freezes ordered up by Mayor de Blasio, never mind the economic indicators, a more significant bump up now is not so much a money grab as a correction. In voting to allow stabilized apartment rent raises of 3.25% for one-year leases and 5% for two-year leases, the Rent Guidelines Board correctly recognized these competing demands.
There’s no doubt that a significant chunk of the stabilized rental properties are held by institutional investors eager above all to maximize profits; they could absorb a rent freeze. Yet there’s a large chunk of smaller operators for whom the margins are thin and the rental income goes to the mortgage and maintenance. Unfortunately, the board’s determinations are a blunt instrument that must try to maximize utility across a mammoth system encompassing more than a million units with vastly different circumstances for tenants and landlords alike.
We’re operating in a fundamentally different environment than before the 2019 rent reforms, which hugely restricted the circumstances under which stabilized rents can be raised, making the board’s decisions much more impactful. Political leaders should recognize that it’s a delicate moment for renters and — while they work to produce more housing, the most important long-term fix — help those at risk of eviction. More tenants are eligible for state and city housing vouchers than before, and the vouchers are worth more than they used to be.
But in its own narrow mission, the board picked the most reasonable of bad options.