Public Hearings Must Be Well Attended by RSA Members
As building operating costs continue to rise under the current Administration, the de Blasio-appointed Members of the Rent Guidelines Board (RGB) continue to ignore their mandate that requires them to consider appropriate rent increases based on increased costs of rent-stabilized property owners.
At the Preliminary Vote on May 7th, the RGB approved the following Preliminary Rent Guidelines for rent-stabilized apartments and lofts for leases commencing between October 1, 2019 and September 30, 2020:
- For a one-year lease, a range between 0.5% and 2.75%
- For a two-year lease, a range between 1.5% and 3.75%
- A sublet allowance of 10%
- A Special Guideline for decontrolled apartments equal to Maximum Base Rent (MBR) + 39%
- A 0% increase for all classes of hotels, rooming houses and Single Room Occupancies (SRO’s)
The proposal by newly-elevated Chairman David Reiss, passed by a vote of five to four, with all votes in favor coming from Public Members on the Board. The Owner Representative proposal, which called for ranges of 3.75% to 5.75% for a one-year lease and 4.75% to 6.75% for two-year leases, failed by a vote of seven to two.
As we have seen over the last six years under this Administration, the RGB has severely under-compensated building owners with rent increases for one-year guidelines of only 3.75% (including two straight rent freezes) and total operating cost increases of 21.2% (including this year’s calculations).
To further prove that this Board prioritizes a tenant-friendly agenda, the Board Members continue to deliberately ignore the RGB research staff’s recommended commensurate ranges that are provided in the annual Price Index of Operating Costs (PIOC) report. In this year’s report, based on this year’s 5.5% operating cost increase and a small 0.4% net operating income (NOI) increase, the recommended guideline increases began at 3% for one-year leases and capped out at 9.25% for two-year leases. As you can see, the high-end of the approved one-year range, which was 2.75%, was below the Board’s own recommended starting point of 3%.
Last year’s one-year guideline of 1.5% was the highest since Mayor de Blasio took office and this year’s numbers provided by RGB data support an even higher increase. If you could not attend our special membership meeting on May 29th, this issue of the Reporter serves as a critical resource for preparing testimony for the June public hearings.
In the midst of all that is unfolding in Albany, it is absolutely vital that owners do whatever it takes to secure the highest possible guidelines this year for their rent-stabilized units. RSA members must come out in numbers to testify and support other owners who testify at the four public hearings. It is absolutely critical that you join RSA in all of our battles throughout the month of June! (see pages 3-5 of the June 2019 RSA Reporter for more information on the RGB hearings).
NOTE: The Rent Guidelines Board reserves the right to cancel or reschedule public meetings and amend meeting agendas.