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On June 21, the nine-member Rent Guidelines Board voted 5-4 to raise rents by 3.25% for year-long leases and 5% for two-year leases, the most significant increase for rent stabilized apartments in nearly a decade.
Neither landlords nor tenants are satisfied with this rent hike; tenants favor reduced rent, whereas landlords, many of whom are facing increased property maintenance costs, are demanding even higher rates.
The survival of New York tenants has become quite tricky in light of the rent rate hikes – they impact more than a million apartments in the state. Let’s look at the decision to increase rent and how it will continue to affect New Yorkers.
New York landlords demanded a 4.5% increase in one-year apartment leases. However, the Rent Guidelines Board decided that the rental rate for one-year leases would instead only increase to 3.25%. Similarly, two-year apartment leases would increase to 5%. These increases go into effect in October 2022.
Before the Board’s vote, rent rate increases had been frozen since 2020 due to the pandemic. To put the increase into perspective, the average year-long rent increase was 2%. This meant a tenant who paid $350 rent in 1960 would now pay $1,500.
Tenants have actively protested the Board’s decision to approve higher rent rates. Some of the protestors believe the rate hike will be troubling. Especially for the middle class and Black and Brown tenants. Tenants who live in regulated apartments typically have a limited income. So even a slight rent increase could pose significant financial issues.
This rate increase is forcing 2.4 million low-income tenants to leave their apartments in favor of alternative housing because their housing is no longer affordable.
Landlords also expressed concern about the rate hikes. Some landlords claim they cannot afford the taxes and the burden of building maintenance at these rent rates. Maintenance is a big issue in New York, and the rent alone generally is not sufficient enough to cover landlords’ expenses. Landlords would like a 4.5% rate increase because, for some property owners, the 4.5% increase is the only way to avoid losing money.
The Board’s decision was also controversial in Mayor Eric Adam’s view. He disagreed with the rate hike decision, calling it the work of an“ incompetent administration.” “We have to find a new middle ground,” he said.
The world is still trying to move forward after being in the grips of a pandemic; everyone is in crisis. As the world recovers, no one should be forced to choose between housing or putting food on the table.
This rate increase couldn’t have happened at a worse time, especially as inflation makes getting life’s necessities a challenge. Further rent increases will lead to a major crisis that will put the middle class at risk and possibly displace them. The current rent system is unacceptable, and we must find a better way to ensure people have access to affordable housing even as inflation becomes more prevalent.