The body that sets rents for more than two million New York residents signaled Wednesday that it could freeze rents again for some of them. This would be a boon for renters but a blow to landlords as both camps get past the coronavirus pandemic.
The body, the Rent Guidelines Board, agreed 5 to 4 to consider leaving rents for one-year leases unchanged or having property owners increase them up to 2 percent. This would essentially extend a rental freeze that the board approved last summer. The rents for two-year leases could increase by 1 to 3 percent.
Wednesday's vote was preliminary. A final decision by the board, which sets the rents for around half of the city's rental housing stock, will come in June and come into effect in October. It would cover 1.2 million regulated units; Market-based rents would not be affected.
Any board-cleared freeze would be the fourth in seven years, a remarkably stagnant period for state-regulated rents and a sign of officials' concern that tenants cannot afford to live in one of the most expensive housing markets in the US.
"For the people in the Bronx and across the city struggling before the pandemic, the fight just continues," said Sheila Garcia, a board member who represents tenants' interests.
This year's Board of Directors deliberations finds a particularly challenging time for renters and landlords as New York City is still emerging from its worst recession in decades.
Although the local economy appears to be gradually recovering as restrictions imposed due to the pandemic continue to be relaxed, many people are still dependent on unemployment benefits and are falling behind on many of their bills, including rent.
The unemployment rate in New York City was 11.2 percent in March, about half what it was in June last year but almost three times what it was in March 2020 before the pandemic broke out in full force.
All members of the rental committee were appointed by Mayor Bill de Blasio, a Democrat. In addition to Ms. Garcia and a second member who represents tenants, two members represent landlords and five represent the general public.
In many ways, the panel's decision on Wednesday is likely to disappoint those who pay rent as well as those who cash it.
Tenant groups have been trying in the past few weeks to gather support to reduce rents, something the board has never adopted in its 52-year history. Black and Latin American residents, who have lost significant jobs due to the pandemic and have not yet found new ones, have particular problems affording their current rents, according to proponents of residential real estate.
Ms. Garcia and the second tenant representative on the board hoped to remedy this by proposing a 3 percent reduction in rents for one-year leases. The proposal failed with a 7-2 vote.
A certain degree of relief is already emerging for the tenants. Legislators recently approved a $ 2.4 billion rental assistance program designed to help tenants cover re-leases and unpaid utility bills for up to a year. The grant has not yet been distributed, but tenants can apply for it later this month.
New York State recently extended an eviction moratorium on residential and commercial tenants to August 31. The initiative also protects small landlords from foreclosure proceedings if they cannot make their mortgage payments.
On the property owner side, the New York Real Estate Board, an influential lobby group, and other landlord groups had called for a 3 to 5 percent increase in one-year leases, which would be the biggest jump since 2014. An increase is necessary to pay rising property taxes and to keep buildings in good condition, according to landlords.
In a report, the chamber found that spending on rental-controlled buildings had increased 3 percent over the past year, with insurance, labor and maintenance costs increasing.
At Wednesday's meeting, Scott Walsh, a board member who represents property owners, proposed a 2.75 percent increase for one-year leases and a 5.75 percent increase for two-year leases.
"The impact on owners over the past 15 months has been historically unprecedented, with high vacancy rates, record-breaking collection losses and higher operating costs," said Walsh. His proposal, like the one offered by the tenants, failed with 7 to 2 votes.
The owners criticized the board's vote on Wednesday, saying that government aid to tenants should come from the state and federal levels, not a local facility.
"Tenants financially affected by the pandemic have received thousands of dollars in incentives, increased unemployment benefits and other government benefits," said Joseph Strasburg, president of the Rent Stabilization Association, the landlords with approximately one million rental-regulated units represents New York City. He added, "Landlords have not received any assistance."
However, the state rent relief program will help the owners as the subsidies it gives to tenants are paid directly to landlords.
Ahead of its vote on Wednesday, the board released its latest snapshot of rental costs in the city for 2019. The report, due out next year, will focus on 2020. In 2019, the median monthly rent for regulated apartments across the city was $ 1,300, $ 40 more than the previous year. In Manhattan it was $ 1,970.