Opinion: Fixing rents and making enemies

By former Assemblymember Steven Sanders

It is said that a good deal is one in which neither party is entirely satisfied. More about that in a moment.

Rent regulations in New York City has been a thorny issue for decades. So a little recent history. The Rent Guidelines Board (RGB) was established in 1969 and modified by the passage of the Emergency Tenant Protection Act of 1974. There are nine members of the RGB all appointed by the mayor. Of the nine, two are from the real estate industry, two representatives of tenant groups and five “public members.”

The RGB will meet on June 26 to set rent increases for leases that will expire beginning on October 1 through September 30, 2019. Currently, increases are set at 1.25 percent for a one-year lease and two percent for a two-year lease. Based on the proposals that have been recommended for public comment by the RGB, next year’s guidelines will be similar. There have been years where the rent increases rose into the double digits and there have been years that rents have been frozen. Generally speaking whatever the RGB decides, both tenants and owners cry foul. This year will be no different.

The fact is that try as they may, the RGB satisfies nobody. Moreover, it is difficult to do any planning because nobody knows what the rents will be set at from year to year. It is also a very dubious claim that the decision by the RGB is tied to any real economic data in terms of owners’ costs or profits and certainly not taking into consideration the financial burdens on tenants. In short, it is an arbitrary and often political process.

Bill de Blasio campaigned for mayor in 2013, embracing the idea that there ought to be a rent freeze. And wouldn’t you know it, for two years the RGB did exactly that, for one-year leases.

There is no ideal process for setting rents. Owners must have enough operating capital in order to maintain buildings in decent repair. And since owning a building is not a charitable enterprise, they also need to realize some profit. If not, existing building stock will deteriorate and be abandoned. And tenants need to have access to affordable rents. Government bears some responsibility to make those two imperatives balance out, best as possible.

After studying this imperfect system for about 40 years serving on the Housing Committee in the State Assembly, and before that as president of the Stuyvesant Town-Peter Cooper Village Tenants Association, I know there will never be a system that will satisfy everyone or even most. But reliability is important and equity for all parties should be the goal. So here is a proposal that nobody will like, but might ultimately be fair, simpler and understandable.

First, abolish the Rent Guidelines Board. Then establish dependability, simplicity and end unnecessary bureaucracy by eliminating all lease renewal paperwork. Keep all the tenant and owner protections contained in those initial leases. Adjust rents by 2.5 percent bi-annually. If that is insufficient to adequately operate their building, require owners to open their financial records to show that their revenue is insufficient. End permanent rent increases associated with Major Capital Improvements so that the rent surcharge is eliminated five years after the MCI project cost has been recouped. Expand the Senior Citizen/Disability Rent Increase Exemption to include families with very low incomes under defined circumstances and index the income eligibility ceiling to the inflation data bi-annually.

Of course this proposal would be criticized by both sides. But perhaps that means it is good?

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6 thoughts on “Opinion: Fixing rents and making enemies

  1. For those who attend the public hearing at which tenants and owners testify (such as the one held on June 19 at Cooper Union), it is clear that owners of small buildings face problems that major property owners don’t. In fact, in the last several years, owners of large complexes never bother to show up because whatever the RGB decides makes little actual difference by virtue of sheer magnitude. Steve Sanders is correct: the RGB’s decisions satisfy no one. The system doesn’t work either for tenants or small-building landlords for whom a modest increase could spell disaster. The entire rental system needs an overhaul. Landlords, as business people are entitled to a profit to allow them to maintain buildings in good repair — but not to harrass and gouge renters; renters are entitled to a home and should not worry from year to year about whether they can pay for a roof over their heads. I would love to imagine a world where we can achieve housing balance…but I’ll probably be on the wrong side of the grass before that happens.
    Susan Steinberg
    President, STPCV Tenants Association

    • Your books Susan. Open the TA books.

      Oh, and what good is fighting the rent increases when this place has become unbearable to live in? How about you fight noise, and the commercialization of this property??

      How about showing up for more than just one thing every year – the RGB vote?

        • Notice how Susan has to write President, STPCV Tenants Association after everything she writes. That’s because the overwhelming number of tenants have no idea who she is because there really isn’t a PCVST tenants association anymore just the arm of management headed up by Susan. The PCVST TA is to tenants rights like the rent stabilization association is to rent stabilization. They are both dangerous to the group/policy that their names portend they are for.

  2. Susan Steinberg and Steven Sanders are two of the most incompetent people ever and yet the T&V props them up like people care about what they have to say. I continue to get this horrid supposed newspaper in my mailbox weekly despite asking to have it discontinued for years now. I have never paid for it. It never even makes it into my apartment, it gets dumped right into the junk mail garbage can. I guess they cant give it away, I can see why.

  3. Crickets, just as I expected.

    The law doesn’t let corruption (by individuals or groups) slip by anymore. Just ask the hundreds of thousands of politicians, individuals, and organizations that thought they would get away with their corruptive ways and are now behind bars. Your day will come Susan, and the thousands of tenants you have screwed over during your tenure will cheer.

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