New York City tenants face third year of price hikes

NEW YORK: Tenants in New York City’s one million rent-stabilised apartments are on track to face the third year in a row of rent increases as renters and landlords grapple with rising costs.

The city’s Rent Guidelines Board has endorsed potential rent hikes of 2% to 4.5% for one-year leases and 4% to 6.5% for two-year leases. Price increases in those ranges are likely to be approved at a final vote in June.

New York City’s rent-stabilised apartment market has come under pressure in recent years.

Landlords argue that the rental income from stabilised units has failed to keep up with steep inflation and higher costs as interest rates soared. A 2019 rent law aimed at protecting tenants has also made the situation tougher for property owners.

The challenges have started to raise concerns at banks including New York Community Bancorp Inc.

The Hicksville, New York-based company and Signature Bank, which failed last year, were major lenders to the market.

The Community Housing Improvement Programme, which represents property owners, said the ranges approved on Tuesday would not go far enough to fund improvements for rent-stabilised buildings.

“A guideline near the highest part of the range is necessary in order to cause the least amount of damage,” executive director Jay Martin said in a statement.

At the same time, residents face a housing shortage that has pushed rents up in recent years.

Citywide, market-rate asking rents climbed 2.1% in February from a year earlier, according to StreetEasy.

Rent-stabilised tenant advocates have been pushing for a rent freeze, arguing that it’s not the responsibility of tenants to help owners turn a profit.

The board has approved rent increases in recent years, a shift from when Mayor Bill de Blasio was in office. If approved this year, rent hikes for the roughly two million New Yorkers who live in stabilised units would take effect for lease renewals that begin Oct 1 or later.

The Legal Aid Society, a tenant advocacy group, said: “We urge the board to listen to the cries of tenants and take into account how any rent increase will inevitably lead to higher rates of eviction, displacement and homelessness.” — Bloomberg