On Tuesday, June 26th, the City Rent Guidelines Board (RGB) voted in favor of the highest rent increase since Mayor Bill de Blasio took office with 5 votes in favor and 4 against.
This modest rent increase does not come close to covering the large increase in operating expenses that property owners have incurred over the last year. Since 2014, owner operating costs have increased 16% while rents have now gone up only 3.75%.
Despite this, the Board has approved a higher rent increase than last year. RSA will carry this momentum into next year's deliberations and continue working with the Board Members to ensure that they understand why larger, more adequate rent increases are needed in order for building owners to maintain their buildings.
Below is a summary of Rent Guidelines Order No. 50 for leases commencing between October 1, 2018 through September 30, 2019:
1.5% for one-year leases
2.5% for two-year leases
A sublet allowance of 10%
Special Guideline Maximum Base Rent (MBR) + 39%
A vacancy allowance of 19% for one-year leases*
A vacancy allowance of 20% for two-year leases*
*With regard to vacancy allowance increases, as a result of amendments to the rent stabilization laws which took effect June 15, 2015, where the tenant who vacated the apartment was paying a preferential rent, the vacancy allowance is as follows:
5% if the last vacancy lease commenced less than two years ago,
10% if the last vacancy lease commenced less than three years ago,
15% if the last vacancy lease commenced less than four years ago, and
20% if the last vacancy lease commenced four or more years ago. The vacancy allowances are applied to legal regulated rent, not the preferential rent.
We will have additional information on this year's RGB process in the upcoming July/August edition of the RSA Reporter.