Prices have increased 6.2 percent for owners of rent stabilized buildings in the last year, a study released by the Rent Guidelines Board last Thursday found.
RGB executive director Andrew McLaughlin said that one of the main factors for this increase was a 24.6 percent increase in fuel costs due to the year’s winter weather, which was reportedly colder than average.
However, RGB tenant member Harvey Epstein expressed concern and confusion about the reported increase in fuel costs, noting that 2016 was one of the hottest years on record. McLaughlin explained that the winter was 18 percent colder than the previous year, based on comparing each month to those in the previous year, and there were more days in which the average temperature was lower than 65 degrees.
The increase in fuel costs from 2016 to 2017 contrasted sharply with prices from the previous year, when fuel cost decreased 41.2 percent and by 21 percent the year before that. The decrease in last year’s fuel costs contributed to the negative price index in 2016, at -1.2.
Tenants in front of the CUNY graduate center before the vote on Wednesday evening. (Photo by Maria Rocha-Buschel)
Rent freeze still a possibility for one-year leases
By Maria Rocha-Buschel
Tenants hoping for the possibility of a rent rollback this year were disappointed at the Rent Guidelines Board preliminary vote last night, despite the possibility of a rent freeze for one-year leases. The de Blasio-appointed board approved a range that will be voted on at the end of June, from zero to two percent for one-year leases and from 0.5 to 3.5 percent for two-year leases.
The nine-member board faced the passionate crowd at CUNY’s Proshansky Auditorium in Midtown for the vote, which was preceded by a tenant rally in Herald Square a block away.
On Thursday, The Rent Guidelines Board released its annual report on landlord operating costs, which revealed that landlords only experienced a 0.5 percent increase last year, making it the smallest increase since 2002.
Mike McKee of TenantsPAC pointed out that in that year, operating costs were actually in the negatives but the chair at the time had been appointed by Mayor Michael Bloomberg.
“He said that he didn’t care what the price index showed and that we couldn’t have rent increases below 2 and 4,” McKee said. “And that’s what the increases were that year.”
In contrast, the current board that will vote this year was appointed entirely by Mayor Bill de Blasio, who made getting a rent freeze for rent stabilized tenants one of his campaign promises.
The study released last year reported that operating costs had increased by 5.7 percent in 2013, but the board had five new tenant-friendly members and set record-low increase of one percent for one-year leases and 2.75 percent for two-year leases.
The notably small increase in landlord costs in this year’s study is due primarily to a 21 percent decrease in fuel costs throughout last year. The study also noted that there was a 4.2 percent increase in taxes, 7.2 percent increase in insurance costs and 1.2 percent increase in utilities, but these were still outweighed by the drastic decrease in fuel costs.
While the report looks promising for tenants, advocates are still fighting to change the process because they say that the price index is deceptive and shouldn’t even be used as part of the RGB’s process.
If landlords’ costs are inflated, roll back the rents
Re: Bill would change how RGB calculates landlords’ costs,” T&V, Jan. 29
To the Editor:
Okay, let’s see if I got this right. Since the 1990s the Giuliani/Bloomberg/de Blasio administration’s hand-picked, nine-member Rent Guidelines Boards have voted 5-4 in favor of rent increases every year. Now in 2015 we learn that the method used to determine and calculate these rent increases, “the Price Index of Operations Costs (PIOC), does not accurately reflect the costs and revenues accrued by landlords, causing unfair increases for tenants” and “overestimates landlord’s expenses by as much as one third and doesn’t measure income” at all.
Does this mean that for over 20 years the mayor-appointed RGBs gave unfair annual rent increases to landlords based on overestimating their expenses by 33 percent and not including their income into the calculation at all? If so, the only honest thing for the city to do would be to roll back those unfair rent increases for the past 20 years. But “Honesty is the best policy” is not the policy of New York politicians so another way to correct this injustice is needed.
I’m not surprised that it took over 20 years for one lone City Council member out of hundreds to uncover this devious trickery, make it public and introduce a bill that “would change how RGB calculates landlords’ costs.” What were the other hundred Council members doing for the past 20 years? Perhaps writing “Thank You!” notes to their constituents in the real estate industry for campaign contributions? Certainly not working to make the dream of affordable housing for rent-stabilized tenants a reality.
T&V reports that one RGB member cheering “What do we want? Rent freeze!” has “urged the mayor to pass the legislation because of the need for accurate data for rent stabilized tenants.” I say NO! We don’t need no stinkin’ band aids! What we need is major surgery. Since tenants have been paying more rent than legally required for over 20 years due to the city RGB’s devious, landlord-friendly methods of calculation, don’t you think tenants deserve something to make up for over 20 years of injustice?
I suggest that the mayor appoint an RGB that will be as friendly to tenants as it has been to landlords, one that will vote 5-4 for a rent freeze every year. That’s the only just thing to do, since I doubt the city is going to roll back those increases. Anything less would make this news just another joke about the various ways that New York politicians pay back their campaign contributors.
“Please don’t be offended if I preach to you awhile/Tears are out of place in eyes that were meant to smile.” Now join me in singing, “Look for the Sheldon Silver lining!”