By Maria Rocha-Buschel
The City Council member representing Greenwich Village, Corey Johnson, has called on the mayor to reform the Rent Guidelines Board and eliminate the price index from the calculations used to determine the annual rent adjustments for stabilized tenants. Elected officials and tenant advocates joined Johnson at City Hall last Thursday to support his legislation on the matter because they say that the Price Index of Operating Costs (PIOC) does not accurately reflect the costs and revenues accrued by landlords, causing unfair increases for tenants.
The price index doesn’t measure what owners actually spend running buildings but instead estimates their costs based on changes in prices for goods and services, like utilities, without taking changes into account, like the weather. The price index also doesn’t measure any of the income received on the properties.
“The PIOC overestimates landlords’ expenses by as much as one third and doesn’t measure income,” Johnson said. “Tenants deserve a fair shot. The 2.5 million rent-stabilized tenants in New York deserve a metric that accounts for actual income and expenses.”
Mike McKee of TenantsPAC said that the price index study is “an enormous amount of work” and that there is nothing in the law that requires the board to use the data from the study in their decision.
The RGB does receive landlords’ income and expense data from annual filings with the Department of Finance, which shows that the price index overestimates owners’ operating costs, but the information is 15 months out of date.
“What the mayor should do is instruct them not to do a price index study this year and he should instruct the Department of Finance to provide current income and expense data,” McKee said.
McKee also noted that the Rent Guidelines Boards for Westchester and Nassau County do not use a price index in their calculations, and both boards have frozen their rents before, while the RGB in New York City never has. Westchester and Nassau requires landlords to file income and expense reports with the state Division of Housing and Community Renewal for the current year, while the data that the NYC RGB gets from the Department of Finance is old.
“It would be a tight timeframe but they could do it,” McKee said, noting that former DOF Commissioner Martha Stark had testified to the RGB that they would be able to get more current data if required. “Even landlords are always saying that the numbers are out of date.”
RGB tenant members Sheila Garcia and Harvey Epstein were at the rally in support of the legislation, with Epstein leading a cheer that was popular prior to the historically low increases last year: “What do we want? Rent freeze! When do we want it? Now!”
Epstein, who is associate director of the Urban Justice Center, urged the mayor to pass the legislation because of the need for accurate data for rent-stabilized tenants.
“Unfortunately, the price index and current income and expense data does not provide us good information,” he said. “These resolutions, including getting rid of the price index, will provide the RGB with more accurate data to serve the needs of all New Yorkers by setting rent increases to owners’ actual income and expenses as well as tenant needs.”
Johnson also recently introduced legislation that would require owners to submit income and expense statements to the Department of Finance for residential properties with six to 10 units. Currently, owners only need to submit data for buildings with 11 or more units but tenant advocates said that since rent stabilization can apply to buildings with six units or more, the requirements should reflect that.