The Rent Guidelines Board did it again!! At the end of June they voted on how much rents in NYC’s stabilized units would rise or fall or if they would stay the same. The board of nine (made up of 2 tenant reps, 2 landlord reps, and 5 members of the public) voted 7-0 (two abstained) in favor of a freeze on 1-yr leases and a 2% increase on those wishing to sign a 2-yr lease. This repeated the unprecedented decision they made last year.
There was some disappointment on both sides of the spectrum. Tenant’s advocates weren’t as happy as one might think. They had hoped for a rollback citing 2015 showed an operational cost decrease for landlords. Landlords were hoping for as much as a 3% & 5% increase on 1-yr & 2-yr leases respectively, so no applause for the plan there.
Landlords have other ways to get a rent increase to pass on their costs to their stabilized tenants. The MCI (Major Capital Improvement) is at their disposal to impose a building-wide increase for their costs incurred in replacing windows, boilers, roofs, etc. For instance, tenants in a rent stabilized building on Bedford Avenue face a $5 per room increase if their landlord’s MCI application is approved. Because the MCI increases are permanent and continue after the improvement has been paid off, Mayor de Blasio has proposed MCI’s should become temporary, “Costs from increased services or improvements to individual apartments would be spread over 10 years, while building-wide or system improvements could be spread over 7 years. Long-term rent would be unaffected, and would reset after the fixed period.” Until this proposal becomes law, tenants can question the increase by commenting to the Division of Housing and Community Renewal before the DHCR has made their decision on the MCI application. Many community organizations, like St. Nicks Alliance’s Community Preservation, will assist tenants in this capacity.
The rent freeze is refreshing news to many. Their only quandary is whether to sign on to the 1-year or 2-year lease. The question has been posed why would you sign a 2-yr lease when that option has an increase? This would be the strategy for those speculating rents within the next 2 years could increase by a percentage that would make 2% the smarter deal. The 0% and 2% rates cover rent stabilized leases that expire between Oct. 1, 2016, and Sept. 30, 2017.