Historic rent freeze is a possibility

Tenants attend the preliminary vote of the Rent Guidelines Board on Monday night, hoping as always, for that elusive rent freeze. (Photo by Maria Rocha-Buschel)

By Maria Rocha-Buschel
The Rent Guidelines Board took an unprecedented step in its preliminary vote on Monday night in proposing a rent freeze for one-year leases on rent-regulated apartments. The vote took place at the U.S. Custom House on Bowling Green to the usual raucous crowd.
While the tenant members of the board initially called for a rent rollback for both one and two-year leases and the owner members proposed up to 5.5 percent and 9.5 percent increases for one and two-year leases respectively, the board ultimately voted on newly-appointed Chair Rachel Godsil’s proposal: a range of zero to three percent for one-year leases and 0.5 to 4.5 percent for two-year leases.
This was the board’s first vote with the members appointed by Mayor Bill de Blasio. In addition to Godsil, the mayor also appointed Sarah Williams Willard as an owners’ representative, Cecilia Joza and Steven Flax as public members and tenant representative Sheila Garcia, who received enthusiastic cheers from the crowd when her name was announced in the roll call.
“We’re here to simulate what’s fair for both landlords and tenants and the board has ignored its mandate to make a fair decision,” Garcia said when outlining the proposal from the tenants’ side, eliciting more cheering from the public. “It’s my job to make a balance. We’re calling for a rent roll back and it’s not as a favor to tenants but it’s to level the playing field.”
Garcia and the other tenant rep, Harvey Epstein, called for a roll back of negative six to zero percent for one-year leases and negative two to zero percent for two-year leases but this was shot down by a vote of six to three.
The subsequent proposal from the owner members, unlike that of the tenants, was welcomed with jeering from the crowd, causing the chair to call for order multiple times because the noise was drowning out Williams Willard as she outlined their suggestions.
Willard said that their proposal was based on data which has found that between 1990 and 2012, the price index for building expenses has gone up 5.1 percent and Real Property Income and Expenses (RPIE) have increased 4.3 percent annually while RGB increases have averaged 4.3 percent annually.
“Operating expenses have also gone up this year,” Willard added.
Based on this analysis, she said, the ranges the owner members thought were appropriate were a 3.6 to 5.5 percent increase for one-year leases and 4.3 to 9.5 for two-year leases with a 10 percent sublet allowance.
Epstein and Garcia both shook their heads in disbelief at the suggestions.
“I appreciate what you claim to be facts but I think we have different definitions of what facts are,” Epstein said in response to the proposal. “We look at data when coming up with our figures as well. What we’ve found is that owners are doing well and tenants are getting evicted. When you say that owners are ‘only getting a three percent profit,’ you have to remember that our job is to look at the balance.”
The only votes in favor of the owners’ proposal were the owner representatives themselves, after which Godsil presented her range of increases. The proposal passed, with the only member voting against it being Cruz. Epstein seemed reluctant to vote in favor of it but noted that he was only doing so because of the possibility of the “historic rent freeze.”
Although the RGB has held votes in the Custom House in previous years, the security to let the public into the federal building moved very slowly this time and the meeting, which was supposed to start at 6 p.m., didn’t get under way until after 6:45.
Before beginning the proceedings, Godsil noted that she preferred not to begin until all of the people who came to hear the meeting were allowed in but at that point, just before 7 p.m., there were still about 50 people who needed to go through security. In fairness to the attendees already in the auditorium, she said that she would have to begin the meeting even though members of the public were unable to get in.
Epstein expressed frustration at the system.
“The fact that 40 to 50 people weren’t able to get in for the start of the meeting is unacceptable,” he said. “This is something that we need to consider for future meetings and look for the most open and accessible spaces available.”
The final vote will take place on June 23 at Cooper Union’s Great Hall, where Godsil said she hoped security would move more quickly than at the Custom House. In the upcoming month before the final vote, there will be five more meetings, including four with the opportunity for public testimony.

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