In 2016, landlords made more money than ever. This, despite the record number of new affordable units and two years of rent freezes on rent stabilized apartments which make up nearly half of the apartments in New York City.
Rent stabilized tenants are calling for a rent rollback this year, asking for rent cuts as much as seven percent. To no surprise, landlords would like an eight percent raise.
Last month, the Rent Guidelines Board held a preliminary vote to set the maximum amount which landlords are allowed to increase the rents. The meetings are often raucous events with angry tenants, and this year was no different. Whitney Kimball reports.
KIMBALL: I’m standing outside Cooper Union where about sixty people are juggling umbrellas and signs against the gusts of wind and rain. The signs say “rollback.”
During the Bloomberg era, the Rent Guidelines Board often allowed between four and seven percent raises every year. Tenants feel that it’s time to undo the damage.
KIMBALL: The rules for rent stabilized apartments generally apply to units under $2,500 per month in buildings built up to 1974. But tenants argue that landlords find all sorts of ways around the rules.
Hunnuh, a woman in her early thirties, remembers moving into her first apartment in Crown Heights just after college. The previous tenant was an old woman who had died. All of her belongings were out on the street.
HUNNUH: And now I’m like oh, I know what that new tenancy did to the apartment, and I know the landlord probably the landlord overcharged us to jack up the stabilized price of the apartment and didn’t tell us it was stabilized… and we didn’t know anything about stabilization.
KIMBALL: Carlos Ortiz, of Catholic Migration Services in Queens, stands on the fringes watching the protest. I ask him what he would say to a landlord who needs to replace a boiler. Wouldn’t they need to be compensated for those costs?
ORTIZ: When you speak of a boiler, the useful life of a boiler is 20-25 years. A lot of landlords will attempt to change the boiler before its useful life has expired and they will get away with submitting that rent increase to the Department of Housing and renewal where people will start seeing a 50% increase per month.
KIMBALL: That would be called an MCI, or Major Capital Improvement, which a landlord can use to file for rent raises.
Standing on the steps of Cooper Union are Sheila Garcia and Harvey Epstein–the members of the Rent Guidelines Board whose job is to represent tenants. They watch the protest. They look weary. Garcia is well aware of the MCI scam.
GARCIA: Sometimes it’s boiler, painting a whole building, doing a whole roof, changing all the windows. The boiler or the hot water completely not working. And they’re supposed to write receipts evidencing that work.
KIMBALL: She adds that renters should look up their building’s rent history so that they don’t end up in a situation like Hunnuh’s–where the previous tenant dies, and the new tenants are oblivious to the stabilization.
The scene is similar inside Cooper Union’s auditorium, where the Rent Guidelines Board sits on the stage. Protesters young and old, with “rollback” signs and matching union shirts, have children in tow. Meanwhile, a group of middle-aged men in suits look on from the entrance. I ask several of them whether they are landlords or tenants, and they say no.
Finally Jack Freund is fetched from the audience. He is the vice president of the Rent Stabilization Association. The group represents 25,000 landlords.
FREUND: There’s a stereotypical view of the landlord, a large owner of property, characterized by greed, avarice, disdain for humanity.
KIMBALL: Earlier this year, Freund’s organization lost a lawsuit against the Rent Guidelines Board, which, they claimed, did not fairly account for expenses like sewer charges and repairs when it froze rents.
But he says that’s not really what keeps rents up.
FREUND: The prime reason is real estate taxes, that is what drives rents up. If we want to have rent freezes, it’s a very simple proposition all the mayor has to do is freeze real estate taxes.
KIMBALL: He believes that rent stabilized apartments should be phased out for the good of the city. The regulation is the problem, he says.
FREUND: We would have much more housing if we didn’t have as much regulation as we have.
KIMBALL: Do you think that the free market would take care of affordable housing simply if we have more units?
FREUND: No we definitely need more units, but there are always going to be people who are too poor to afford rent, no matter how low that rent is…for those people the answer is not low rent or rent freezes, it is income supplementation..That’s the way to go.
AMBI: Estamos aqui
KIMBALL: Back in the auditorium, the tenants’ representatives Sheila Garcia and Harvey Epstein make their case for a rollback. According to Epstein, 43 percent of the people entering the shelter system come out of rent stabilized apartments.
But the Rent Guidelines Board votes against the rollback. In the end, they approve a modest raise of one to three percent on a one-year lease and two to four percent on a two year lease.
AMBI: Boo! You’re fucking over New Yorkers!
KIMBALL: That’s just the range; they’ll decide the final number in June. And the maximum raise of 4 percent may not seem that high, but if rent is $1,000 per month, then you lose $40 in groceries. After years upon years of rent raises, that adds up.
On the way out of the meeting, I meet Gladys, 53, who lives in Bushwick. She tells me that it’s coming down to a choice between rent and food.
GLADYS: My rent is keep going higher. My salary is staying the same for 18 years. …so now with this raising, I’m not going to be able to afford it. I’m going to be a homeless person.
KIMBALL: Gladys says that if worst comes to worst, she can always stay with her daughter. But many in New York City don’t have that option.
This is Whitney Kimball, for Uptown Radio.