RGB Likely to Extend Rent Freeze for One-Year Leases
On May 5, in a preliminary vote, the Rent Guidelines Board (RGB) voted 5 to 4 to consider freezing rents on one-year leases or letting owners raise them up to 2 percent. If the RGB votes to keep rents as is for another year, it would effectively extend the rent freeze RGB approved last summer. For two-year leases, the RGB is considering rent increases of 1 to 3 percent.
If the rent freeze is approved, it would be the fourth freeze in seven years. Last year, the board approved a rent freeze for rent-stabilized tenants with one-year leases. And for two-year renewal leases, a 1 percent increase was allowed during the second year. This year, the board’s final vote for the rent guidelines is scheduled for June 23.
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.
Scott Walsh, an owner representative, proposed increases of 2.75 percent for one-year leases and an increase of 5.75 percent for two-year leases. The board dismissed his proposal with a 2 to 7 vote. In his remarks, Walsh noted the tumultuous times for owners. "The impacts to owners over the past 15 months have been historically unprecedented. High vacancy, century record-breaking collection losses, and higher operating costs, all in the context of an economy with growing inflation that is already cited by the Federal Reserve to be further increasing over the coming months. These are not economic mysteries. These are warning signs that housing needs increases above inflation levels just to tread on water," stated Walsh.
On the other side, tenant representative Sheila Garcia proposed that the range for one-year leases start at negative 3 percent and end at 0 percent. For a two-year lease, she proposed starting at 0 percent and ending at 1 percent. This proposal was dismissed in a 2-7 vote. In her remarks, Garcia discounted the federal relief tenants received, saying it was premature to assume the beneficiaries of the tenant relief program would be able to get the necessary relief. "For folks who were making less than $15,000 a year, the stimulus checks just got them above water," Garcia stated.
How to Comment on Proposed Guidelines
Anyone can comment on the proposed guidelines. The deadline to submit comments is June 17, 2021. 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 email@example.com.
- 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 testimony webpage at https://rentguidelinesboard.cityofnewyork.us/testimony/.
- 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 testimony webpage.
- 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. 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 to speak began May 17, 2021. You can register online on the registration webpage (https://rentguidelinesboard.cityofnewyork.us/registration/), by email at firstname.lastname@example.org, or you can sign up to speak by calling (212) 669-7480 from 9 a.m. till 5 p.m., Monday through Friday.
Remaining Virtual Meetings and Hearings Schedule
- Thurs., June 3, 9:30 a.m. (Public Meeting): RGB staff report 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 using a telephone by dialing (646) 558-8656, then when prompted, entering Meeting ID: 828 8426 6962; when prompted for Participant ID, pressing #; then when prompted, entering Passcode: 680822.
- Tue., June 15, 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 prior to the hearing. The public may participate in the hearing online by going to https://us02web.zoom.us/j/83877223517 and entering Passcode: 403700 (video) or by telephone by dialing (646) 558-8656, then when prompted, entering Meeting ID: 838 7722 3517; when prompted for Participant ID, pressing #; then when prompted, entering Passcode: 403700. 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 17, 5 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 prior to the hearing. The public may participate in the hearing online by going to https://us02web.zoom.us/j/84907708770 and entering Passcode: 848480 (video) or telephone by dialing (646) 558-8656, then when prompted, entering Meeting ID: 849 0770 8770; when prompted for Participant ID, pressing #; then when prompted, entering Passcode: 848480.
The public may also view, but not participate in, the hearing via livestream from YouTube at: https://youtube.com/RentGuidelinesBoard and by listening on the phone by dialing the number above and when prompted, entering the above Meeting ID.
- Wed., June 23, 7 p.m. (Public Meeting): Final Vote on lease adjustments for rent-stabilized apartments via a Zoom webinar. To watch the meeting, it may be livestreamed from YouTube at: https://www.youtube.com/RentGuidelinesBoard. The public may also listen to the meeting using a telephone by dialing (646) 558-8656, then when prompted, entering Meeting ID: 851 7665 3671; when prompted for Participant ID, pressing #; then when prompted, entering Passcode: 814706. There will be no public testimony at this meeting.
Highlights of 2021 Price Index of Operating Costs
On April 22, the RGB released its annual Price Index of Operating Costs (PIOC). The PIOC measures changes in the cost of purchasing a specified set of goods and services (market basket) used in the operation and maintenance of buildings that contain rent-stabilized units in New York City. The PIOC consists of seven cost components: Taxes, Labor Costs, Fuel, Utilities, Maintenance, Administrative Costs, and Insurance Costs. Here are the report's highlights:
- The PIOC for buildings that contain rent-stabilized apartments increased 3 percent this year;
- Costs in natural-gas heated buildings increased 3.8 percent, while costs in fuel-oil heated buildings increased 1.6 percent;
- The “Core” PIOC, which excludes the changes in fuel oil prices, natural gas, and steam costs, rose by 3.5 percent this year;
- Fuel costs decreased 3.3 percent and administrative costs fell 0.7 percent, the only decreases of any PIOC component;
- Real estate taxes increased 3.9 percent, primarily due to a rise in assessments for Class 2 properties;
- Insurance Costs rose by the greatest proportion, increasing 18.8 percent;
- The Utilities component increased by 2.1 percent, due to a rise in electricity costs.
- The Labor Costs component increased by 2.8 percent, due to increases in both union and non-union labor;
- The Maintenance component increased by 3.1 percent; and
- The PIOC for buildings that contain rent-stabilized apartments is projected to increase 1.3 percent next year.
2021 Mortgage Survey Report Highlights
On April 22, the RGB released this year's Mortgage Survey Report. This report discusses the cost and availability of financing for owners. The RGB research staff surveys lending institutions that underwrite mortgages for multifamily rent-stabilized properties in NYC.
The survey provides details about the city’s multifamily lending market. It includes questions on financing terms, financial characteristics of “typical mortgages,” factors influencing mortgage decisions, and the number and dollar value of loans made to owners of stabilized buildings. Here are the report's highlights:
- Average interest rates for new multifamily mortgages decreased 24 basis points, to 3.76 percent, the lowest rate ever recorded in this survey;
- Average service fees for new loans rose from 0.22 points last year to 0.38 points this year;
- Average maximum loan-to-value ratios rose from 73 percent last year to 74.1 percent this year;
- Vacancy and collection losses increased from 2.17 percent last year to 2.83 percent this year.
- A total of 470 buildings containing rent-stabilized units were sold citywide in 2020, a 28 percent decline from the prior year.