(New York, NY) — This evening, the NYC Rent Guidelines Board approved a rent adjustment of 3.25% for one-year leases and 5% for two-year leases. The final vote was 5–4. This rent adjustment falls dramatically short of the adjustment necessary to keep up with operating costs, which was calculated at 4.5% in the RGB’s Price Index of Operating Costs (PIOC). The PIOC calculated the necessary increase when inflation was only 4%. Nationally it is now over 8%.
“The data is clear. The adjustment approved by the RGB today will not put a penny of profit in the pockets of small property owners. The RGB has simply taken steps to limit their losses for the next year,” said Jay Martin, Executive Director of the Community Housing Improvement Program (CHIP).
“If the RGB continues to defund rent-stabilized buildings year-over-year, then the consequences will be dire for renters and their housing providers. It is expensive to operate rent-stabilized buildings that are more than 80-years old. If the rents aren’t going to pay for it, the government needs to find other ways to lower the costs,” said Martin.
Earlier this year the NYU Furman Center issued a comprehensive report detailing the consequences of failing to provide adequate rent adjustments that keep up with inflation and other costs. In that report, they suggest removing political pressures from the process and creating a more data driven approach to calculating rent adjustments. In their conclusion, they argue that the overly politicized process that has led to smaller than necessary adjustments has “long-term negative repercussions for tenants…”
“It is clear that this process is broken. Instead of pitting renters against their housing providers, we should be working together with elected officials to address rising costs and provide targeted relief to tenants in need,” said Martin.
Some of the cost increases detailed in this year’s PIOC include: fuel at 19.6%, insurance at 10.9%, maintenance at 9.2%, and utilities at 5.8%. Its projections for next year, based on methodology that keeps inflation at 4%, suggests that all costs will go up 4.7%. This projection also is based on fuel costs declining 1.7%, which seems unlikely based on NYSERDA’s tracking data, which reports that fuel costs have gone up 60% since January. Additionally, Con Edison has warned that electricity costs will go up by roughly 12% this summer due to the rising price of natural gas. The PIOC also predicts that utilities will only increase 2.4%, which seems unlikely since the NYC Water Board raised rates by nearly 5% starting on July 1.