RGB Favors Rent Freeze in Preliminary Vote

In a preliminary vote held on May 7, the NYC Rent Guidelines Board (RGB) proposed guidelines for rent-stabilized apartments effective Oct. 1, 2020, through Sept. 30, 2021. The board voted 5-4 to endorse freezing rents on one-year leases and the first year of two-year leases signed on or after Oct. 1, 2020. During the second year of two-year agreements, rents would rise 1 percent under the proposal.

The RGB has approved a rent freeze on one-year leases twice so far in de Blasio’s term, in 2015 and 2016. Last year, the board approved a 1.5 percent increase for one-year leases and a 2.5 percent hike for two-year leases. This year, the board’s final vote for the rent guidelines is scheduled for June 17.

Landlord and Tenant Proposals Rejected

While not binding, preliminary votes indicate what proposals can gain the support of a majority of the nine-member board. The public members of the board rejected the proposal of the two landlord and two tenant representatives.

At the meeting, the board’s two landlord representatives called for an increase, citing reports that showed owners’ revenue declined for the first time since 2003. In its own reports, the RGB projected that increases of 2.5 percent and 3.5 percent for one-year leases and 3.3 percent to 6.75 percent for two-year leases would be needed to maintain net operating income for owners of rent-stabilized buildings. According to the Income and Expense report, net operating income declined by 0.6 percent from 2017 to 2018 to $535 monthly per apartment.

The landlord representatives’ proposal was to increase rents 2 to 3 percent for one-year leases and 4.75 to 5.5 percent for two-year leases, with a stipulation that no increase could be collected before Jan. 1, 2021, due to the pandemic.

The two tenant representatives, on the other hand, proposed a rent rollback of -3 to 0 percent for one-year leases, and -2 to 0 percent for two-year leases. They pointed to the economic hardships renters are currently feeling as a result of the pandemic. As noted in the yearly Income and Expense report, the data is from 2018 and doesn’t reflect the current economic climate during the pandemic.

Hope for Vacancy Increases

The Housing Stability and Tenant Protection Act (HSTPA) of 2019 eliminated the statutory vacancy rate and doesn’t permit the RGB to establish a separate vacancy rate. This action eliminated the vacancy bonus that allowed owners to hike the legal rent up to 20 percent on new leases for stabilized apartments. But, according to the DHCR, a one or two-year lease guideline may be applied and added to the previous tenant’s legal rent, but only if explicitly authorized by the RGB.

The most recently enacted rent guidelines in effect in NYC since the effective date of HSTPA, Apartment and Loft Order #50 (effective Oct. 1, 2018, through Sept. 20, 2019) and Apartment and Loft Order #51 (effective Oct. 1, 2019, through Sept. 30, 2020), don’t authorize these guidelines to apply to vacancy leases.

But in approving the preliminary guidelines, the board indicated that landlords could hike the rent on leases for vacant units as much as they could for leases on occupied apartments. This was achieved by changing the wording on the RGB’s preliminary order. In prior years, a key heading in the document stated, “proposed adjustment for renewal leases.” This year the heading has been changed to “proposed adjustment for leases,” a shift that means the adjustment applies both to new leases on vacant apartments and renewal leases on occupied units.

Leah Goodridge, a supervising attorney with the Housing Project at Mobilization for Justice and one of the board’s tenant representatives, has stated that the freeze would be a major win for tenants. However, she voted against the proposal because it would apply to leases signed after a vacancy, allowing the rent to rise by 1 percent in the second year of a two-year lease.

At a discussion toward the end of the RGB’s preliminary vote meeting, Goodridge said, “The rent-reform law is very clear that there shall be no more vacancy bonuses, and my misgiving is that we’d be using this vote to circumvent that and treat vacancy bonuses the same as renewal leases when the law is very clear.

Patti Stone, one of the landlord representatives on the RGB, countered, “The law actually rescinded the statutory vacancy increase but said that it’s really up to – that there’s no vacancy [allowance] unless granted by the Rent Guidelines Board,” meaning that the RGB retained the power to grant them.

This year, the change has minimal impact, since rents are likely to be frozen. But in future years, should the RGB permit rents on renewal leases to rise, the rent on vacant apartments would, too.

But it’s important to note that RGB rent hikes typically are in the single digits, so it’s unlikely the vacancy allowance would ever get as high as the former 18 percent to 20 percent range. And since the elimination of vacancy decontrol, a mechanism that removed vacant apartments from the stabilization system once a certain rent level was reached, as a result of HSTPA there is no longer any possibility that the vacancy bonus would, by raising the rent, help push an apartment out of the system altogether.

How to Comment on Proposed Rent Guidelines

Anyone can comment on the proposed guidelines. The deadline to submit comments is June 11, 2020. The following are the available methods to comment on the proposed guidelines:

• Website. You can submit comments to the RGB through the NYC Rules website at http://rules.cityofnewyork.us.
• Email. You can email comments to board@nycrgb.org.
• Mail. Due to the current COVID-19 health crisis, the RGB offices are closed and staff don’t have access to mail on a daily basis. Materials can be mailed to the office of the RGB at 1 Centre Street, Suite 2210, New York, NY 10007, but the office can’t guarantee that they’ll get to the members of the board in a timely manner.
• Audio. You can leave a voicemail comment at (929) 256-5472. You can also submit prerecorded audio comments up to two minutes in length. Instructions to upload your audio file can be found on the RGB’s website, nyc.gov/rgb.
• Video. You can submit prerecorded video comments up to two minutes in length. Instructions to upload your video can be found on the RGB’s website, nyc.gov/rgb.
• Speaking at the Hearings. If you want to comment on the proposed rule at RGB’s virtual public hearings you can sign up to speak. There’s a limited number of slots for registration. If there’s time at the end of each hearing, after all of those who have registered have been heard, the RGB will hear from other attendees at each virtual hearing. Registration will begin on June 1, 2020, at 9 a.m. and will end on June 9, 2020, at 12 p.m. Speakers can attend and participate in a hearing by two different methods. You can use a phone to dial in to the meeting or join the meeting online. Speakers can register online through the RGB website at https://rentguidelinesboard.cityofnewyork.us/registration/. Or you can sign up to speak by email at csuperville@nycrgb.org or by calling (212) 669-7480 from 9 a.m. till 5 p.m., Monday through Friday.

Remaining Virtual Meeting and Hearings Schedule

Because of the ongoing COVID-19 public health concerns, the RGB has been convening virtual meetings. With the vote on the proposed rent guidelines, a notice and comment period, public hearings, and a vote on the final rent orders follows.

The final virtual meeting to adopt final rent guidelines will be held on Wed., June 17, at 7 p.m. Here’s the schedule of remaining RGB meetings and hearings:

• Wed., May 27, 9:30 a.m. (Public Meeting): RGB staff presentations and board discussion of data via Zoom webinar. There will be no public testimony. To watch the meeting, it may be livestreamed from YouTube at: https://www.youtube.com/RentGuidelinesBoard. The public may also listen to the meeting via telephone by dialing (646) 558-8656, then entering Meeting ID: 894-3807-1306.
• Wed., June 10, 4 p.m. - 7 p.m. (Public Hearing): Virtual Zoom Public Hearing where the public can testify live. The public can also submit written, video, and voice comments before the hearing. The public may participate in the hearing online by going to https://us02web.zoom.us/j/87476147429 (video) or by telephone by dialing (646) 558-8656, then entering Meeting ID: 874-7614-7429. The public may also view, but not participate in, the hearing via livestream from YouTube at: https://www.youtube.com/RentGuidelinesBoard and by listening on the phone by dialing the number above and when prompted, entering the above Meeting ID.
• Thurs., June 11, 6 p.m. – 9 p.m. (Public Hearing): Virtual Zoom Public Hearing where the public can testify live. The public can also submit written, video, and voice comments before the hearing. The public may participate in the hearing online by going to https://us02web.zoom.us/j/82699250495 (video) or by telephone by dialing (646) 558-8656, then entering Meeting ID: 826-9925-0495. Directions on how to register to speak can be found below. The public may also view, but not participate in, the hearing via livestream from YouTube at www.youtube.com/RentGuidelinesBoard and by listening on the phone by dialing the number above and when prompted, enter the above Meeting ID.
• Wed., June 17, 7 p.m. (Public Meeting): Final Vote on lease adjustments for rent-stabilized apartments via a Zoom webinar. The public can view the meeting via YouTube feed or listen via telephone. It will be livestreamed from YouTube at www.youtube.com/RentGuidelinesBoard. The public may also listen to the meeting using the telephone by dialing (646) 558-8656, then entering Meeting ID: 825-7511-2356. There will be no public testimony at this meeting.