HOST INTRO: If you’re a tenant in New York City, you probably don’t pay the water bill. But there’s no such thing as a free shower. Your landlord’s footing that bill, and since 2007, it’s been growing: Water rates in the city have gone up by seventy-seven percent over the past five years.
Now, the city’s proposing another rate increase. It’s the lowest in five years, and that’s good news for landlords, sort of. Acacia Squires reports.
SQUIRES: Everyday more than one billion gallons of fresh water makes its way from upstate New York to the city’s five boroughs. Some of that water ends up here, in a backyard garden in the Greenpoint neighborhood in Brooklyn.
AMBI: Sounds of chickens
Katrina Mauro has co-owned this four-unit building since 2007.
Mauro: The garden definitely takes a lot of water, as you can see we have a lot of planters here.
She and her tenants share the vegetables, but not the bill. Like most landlords in New York, she pays the water for the entire property. She says she never really thought about her water bills — she just rolled them into the cost of owning a building. It wasn’t until she started really looking at the rate that she realized how much it’d gone up.
Mauro: You know, 200-300 when I first moved in. Then the next few years it was 300 to 350, and now I am looking at it and my last bill was 498 dollars, so that’s a major increase in five years.
The rising cost of water may not be obvious to landlords of properties this size, but big landlords say they’ve definitely noticed. Steven Lavelle works for Ventura Land Corp in Flushing Queens. The company owns nearly 1,000 units across the city.
Lavelle: I pulled out a bill here. 2008, here is a property. I paid for a three month bill almost forty-seven hundred dollars. Two years later, 10,683 dollars. So, I go from paying roughly 18,080 dollars a year, to 42,800 a year.
Every year the Department of Environmental Protection, or DEP, which runs New York City’s water system, takes a look at it books. Then it proposes how much the cost of water will probably be. This year, it asked for an increase of just over seven percent – the lowest since before the price of water started to take off. But, Lavelle says with all of the year-on-year increases, inflation in energy isn’t the only thing that catches his attention anymore.
Lavelle: To me trying to combat the rising cost of oil was always more important than the rising cost of water. But, that’s not the case anymore. The numbers are staggering, the increases never cease and clearly they are not coming down.
The DEP says it needs to raise rates to pay off its debt. The Department issued a lot of bonds about five years ago in order to pay for improvements it needed to comply with federal environmental mandates. Now, landlords in New York are paying that bill, and a lot of them aren’t happy.
Jain: Landlords have a case to be made there.
Rahul Jain keeps track of the DEP at the nonpartisan watchdog group, the Citizen’s Budget Commission. He says the cost of water has shot up in part because, the department severely underestimated how much it would cost to fix its environmental problems, so it had to borrow more money than it originally intended.
Jain: Then the question is about, what has contributed to the cost overuns? And that’s kind of an argument about if they have been managed as well as they should have been or the expertise there weren’t able to surmise that these things were going to run over budget.
That means it’s likely water rates are going to continue to increase. Landlords say they have to pass that cost onto tenants. Steven Lavelle of Venutra Land Corp says if they can’t do that, for example, with those tenants protected by rent control, his company may have to get rid of those buildings.
Lavelle: Every dollar that is produced has to used to pay the bills of the building. If we don’t get a handle on the rates, it may make more sense for us to walk away from it.
Lavelle says that while his company has that option, smaller landlords like Katrina Mauro in Greenpoint will have no choice but to raise rents.
Lavelle: There are a lot of smaller property owners who, pardon the pun, are going to be soaked with these bills, and unless we are about to do something about it, we are going to see more properties distressed, and people might even lose their properties.
While landlords here think the situation is bad, the cost of water is actually half it is in Seattle and Atlanta. New York is ranked 12th among major US cities. DEP will hold public hearings over the next month in each borough. The New York City Water Board, which oversees rates, will vote on the proposed increase in May. If approved, the rate hike will go into effect in July.
Acacia Squires, Columbia Radio News.