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Mayor Bill de Blasio flipped off landlords one last time Wednesday when he had the Rent Guidelines Board freeze rents at regulated apartments for another six months and cap increases at 1.5 percent for the following half-year.
The RGB, which he controls, approved the arrangement for one-year leases, along with a 2.5 percent hike cap for two-year leases, after having kept hikes to just .75 percent on average for the past eight years. Yet landlords have seen expenses soar 3.6 percent and property taxes 5.8 percent every year over the same period. Building revenue is now dipping for the first time in two decades.
Rental income “goes right back into [owners’] buildings for maintenance and upkeep and pays property taxes and water bills,” explains Rent Stabilization Association chairman Aaron Sirulnick. The mayor doesn’t “quite understand that.”
Sure, tenants in the city’s nearly 1 million rent-stabilized apartments love their below-market rents. But many are actually well off and can afford market-rate hikes. Low-income tenants, meanwhile, have gotten hefty help from the government over the past year, with stimulus checks, jobless benefit bonuses and even rent subsidies.
Landlords? Bupkis. Indeed, Gov. Andrew Cuomo extended the state’s eviction ban until Aug. 31, making their cash flow even dicier.
Pols like de Blasio and Cuomo think building owners are rolling in dough and can easily make ends meet despite rent freezes and pauses, as during the pandemic. They don’t realize they’re actually worsening the housing market.
When building costs outpace rent hikes, landlords might bump up market rents to keep up with maintenance costs and taxes and to provide for their own families, hurting other tenants. Or they may skip some non-essential maintenance or upgrades altogether.
“Rent freezes, woefully low increases and the so-called rent reform laws of 2019 have stripped building owners of their financial ability to re-invest in their properties, which has a negative ripple effect on affordable housing,” says Sirulnick.
The city lived through the worst consequences of that during the ’70s and ’80s, when owners simply walked away from decaying buildings, blighting whole neighborhoods. Unless Gotham’s next mayor takes a different approach, the city may be headed for an awful déjà vu all over again.
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