A preliminary Rent Guidelines Board report last week raises the possibility of an eye-popping 8.25% hike for roughly 1 million rent-regulated units.
The City Council’s Progressive Caucus is howling, yet anything less than the suggested 8.25% rise for one-year leases (15.75% hike for two-year ones) would be another blow to affordable housing, deepening the city’s housing crisis.
Those figures simply reflect the rising costs faced by property owners, such as a whopping 19% jump in the cost of fuel for heating and an 8.1% spike in building maintenance costs.
And that comes on top of expensive renovations required by Local Law 97’s climate mandates and a state law that’s forcing older units (too costly to renovate) off the market.
Not to mention all the landlords screwed by tenants who used the long pandemic ban on evictions as a license to not pay rent for over a year.
All across the city, smaller landlords are on the ropes, their life savings tied up in buildings that cost all of the rental income (or more!) to maintain. Hundreds are deeply under water.
If the RGB doesn’t allow them to hike rents to cover their increasing costs, they’ll have to save somewhere.
Many will have no choice but to cross their fingers and defer necessary building maintenance.
And some honest landlords (especially the many minority and immigrant ones) will see no choice but to sell to more unscrupulous types.
All of which means the city’s existing affordable-housing stock will deteriorate.
Lefty “tenant activists” have been setting New York’s political agenda for years now; under Mayor Bill de Blasio, they got the RGB to set rent hikes at zero for multiple years. (And they’re now pushing statewide rent control via the so-called Good Cause Eviction bill.)
They’ve also stymied Gov. Kathy Hochul’s drive to promote new housing construction in this year’s budget.
We didn’t agree with all of her agenda, but she’s getting none of it. And it looks like the Legislature will punt on doing anything.
Meanwhile, the Real Estate Board of New York reports a sharp drop in newly proposed building projects in this year’s first quarter, down 45% from 2022 and 24% below the average since 2008.
This even though market-rate rents have been soaring.
If the politicians don’t stop catering to the extremists, and start letting market forces work, the city’s housing crisis will only deepen.
All the progressive noise about a “right to affordable housing” is worse than meaningless when providing housing becomes unaffordable.