The rent-hike system is failing miserably — but there’s an easy way for Albany to fix it
Tuesday’s vote by the Rent Guidelines Board proved one thing: This more than 50-year process of setting increases for one- and two-year rent-stabilized apartment leases is broken — and state lawmakers are to blame.
But good news: They can fix it.
Over the past eight years, historically low RGB rent limits — freezes for three-and-a-half years, and an annual average rent increase of 0.75% — did little to promote affordability for the most income-burdened population. For providers of affordable housing, the system failed, too, even though it was clear what kind of rents building owners needed to keep pace with increased operating costs.
Though the rent adjustment Tuesday is the highest since 2013, the 3.25% and 5% hikes on one- and two-year leases, respectively, pale in comparison to the surge in buildings’ operating expenses over the last 12 months, including astronomical property-tax assessments, the largest water rate increase in a decade, off-the-charts inflation, the highest year-over-year increase in energy costs since 2005 and upticks in other expenses as well.
These rent increases should be an epiphany for lawmakers. The package of devastating housing laws they passed in 2019 created a system in which rent-stabilized property owners rely more heavily on the RGB’s rent adjustments to offset increases not only in operating costs but costs to repair and upgrade their 70-plus-year-old buildings.
This made the RGB’s mandate — balancing the financial needs of affordable-housing providers, on one hand, and the needs of one of the nation’s most income-insecure populations, on the other — even more important. It didn’t help that the previous mayoral administration created the misperception that the RGB is basically a tenant-affordability program.
Meanwhile, elected officials target RGB members, claiming anything less than a rent freeze will drive tenants out of their homes. Yet these politicians are the only ones with the power to protect tenants.
Building owners have become the city’s ATM machines, with constant increases particularly in property taxes and water bills. The only way owners can keep up, while ensuring that aging stabilized apartments are maintained, is through adequate rent adjustments. Yet the RGB failed to come through.
Lawmakers need to get back to the drawing board, but they need not reinvent the wheel: In 2015 and 2016, the state Senate unanimously passed a bill that would have granted subsidies to cash-strapped, low-income tenants to offset rent increases. That measure didn’t earn a single vote in the state Assembly either time.
It’s time to ask these lawmakers why they failed to support legislation that would’ve protected the most vulnerable renters.
A program like this would begin to solve some of the decades-old problems of the rent-regulation system. It would ultimately have a long-term impact on the RGB’s ability to set adequate rent adjustments for the future. Unfortunately, sound housing policy doesn’t synchronize with the political rhetoric and vitriol spewed by anti-owner elected officials and the tenant lobby.
When politicians choose not to offer subsidy and voucher programs that could aid severely income-burdened tenants, they are failing the same constituency they vowed to protect when they ran for office.
This broken system is failing rent-stabilized owners and tenants, and the city’s affordable-housing infrastructure. Relying solely on the RGB process is running affordable housing into the ground. It’s time for a different approach.
Instead of blaming their housing-policy failures on building owners and the RGB, lawmakers need to pass a sweeping housing-policy package that reforms property taxes (another broken system), addresses sharply rising insurance rates and other costs and — most importantly — creates a rent-voucher subsidy program that will cast a wider net in keeping the most vulnerable tenants in their homes.
Equally vital, it would provide the revenue flow that’s necessary for rent-stabilized apartment owners to deliver safe, quality, affordable housing to the 2.5 million renters they currently house and for generations to come.
Joseph Strasburg is president of the Rent Stabilization Association, which represents 25,000 diverse owners of 1 million rent-stabilized apartments in the five boroughs.