Thousands of Rent-Stabilized Buildings Will Fail Without 6.25% Increase For One-Year Leases
RGB data clearly shows that a rent adjustment of 6.25% on a one-year, and 9.75% on a two-year is needed to prevent the further defunding of rent-stabilized buildings
(New York, NY) – Today the New York City Rent Guidelines Board released the Price Index of Operating Costs (PIOC) detailing the skyrocketing cost of running rent-stabilized apartment buildings. The report clearly states that a rent increase of 6.25% on a one-year lease is necessary to prevent further deterioration of the current rent-stabilized housing stock.
“Nobody wants to raise rents. But buildings have costs and this data articulates what those costs are. If rents aren’t adjusted, then building quality declines. It’s that simple,” said Kenny Burgos, CEO of the New York Apartment Association.
“The PIOC also tells us that government controlled-costs like property taxes, water and sewer, and administrative costs associated with rent stabilization continue to be the biggest expenses for rent-stabilized buildings. Elected officials could do something about this if they wanted to make the city more affordable,” Burgos added.
Last week, the NYU Furman Center presented testimony citing the severe distress facing pre-1974 buildings that are highly stabilized, i.e., buildings with high proportions of rent stabilized units (80-100% of units in the building are stabilized). In their testimony, they expressed concern that the distress could grow exponentially.
“This is not about renters or property owners. This is about sustaining the largest block of privately-owned affordable housing in the city,” said Burgos. “The RGB needs to do its part, but elected officials also need to step up and make changes to preserve this vital housing stock.”
According to the Price Index of Operating Costs (PIOC), overall costs increased 6.3% in the last year. This was nearly 2% more than the projections by the RGB, which miscalculated the rise in fuel, insurance, and utilities. The RGB projection for next year is 4.8%. In recent years the board’s projections have averaged 1.25% below actual costs.
The RGB research reports are available here.
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