For some time, over one million New Yorkers have benefited from rent stabilization for their apartments. Unfortunately, they’ll soon be saying sayonara to those deals, as rent rates are headed up. Though this seems like a bad rap for tenants, there are two sides to every story. Make sense of rent control and its many complications in the text below.
Understanding rent control in New York City
To understand rent control, you’ve got to understand New York City. For starters, New York City is the only big city in the U.S. with strong rent control laws. The rent control program is also the longest running in the country.
Uncontrolled rent rates in New York City are also some of the highest in the country. Hands down, it’s a popular place to live.
Because of these steep prices, rent control in New York City started in 1943 under the administration of the federal government. In 1950 it became the responsibility of New York state government, and it has remained there ever since.
Rent control is not as widespread in the city as most people think. Few apartments even qualify for rent control. Regulations state that tenants must have been living continuously in an apartment since July of 1971. On top of that, most units that fall under the guideline of rent control had to be built prior to 1947.
The new rates for NYC rent-controlled apartments
The New York City Rent Guidelines Board decided recently to raise rates on one- and two-year leases. Why raise the rent rates? It’s an effort to stabilize rental prices. The purpose of the Board’s decision is to find a happy medium between the fixed income of most tenants and the financial needs of apartment building owners.
This year, one-year leases will see a rent hike of 3% while two-year leases have been assigned a 6% increase. This boils down to minimum increases of $30 – $60 per month for most tenants.
Many tenants thought the intense recession that settled over the country in the past year would provide a rent freeze on the substantial fees they pay to live in the Big Apple. Instead, the Rent Guidelines Board decided to continue its long history of raising rents. Throughout its 40-year history, the Board has in fact never agreed to freeze rents.
Representatives from the Rent Guidelines Board state their number one goal was to balance the needs of apartment owners with the needs of their tenants. They stipulate that housing stock is currently quite healthy and that tenants by and large can afford to pay an increase.
Most of the New Yorkers who will be affected by the rent hike are currently on tight budgets, often living paycheck to paycheck. Others are on fixed incomes. In such situations, even a $30 monthly increase is tough to swallow.
An alternative approach
As it turns out, several landlords disagree with the current system of uniform rent increases. Some say the system should be replaced by one that evaluates tenants on a case-by-case basis. One avenue for accomplishing this is to pass legislation that creates rent standards based on a person’s income.
Which side is hurting more?
Much of the touchiness relating to rent increases comes down to the argument of who has been hurt more by the recession: tenants or landlords. Associations that represent landlord interests say that group is reeling because of the recession. They point out landlords who are having trouble covering their own bills and taxes.
On the other hand, tenants are having a tough time finding decent apartments and making ends meet enough to put food on the table. They claim landlords are still making sizeable profits at the expense of their residents.
Time will tell
On the bright side, this year’s rent increases are lower than in previous years. Last year alone saw increases of 4.5% and 8.5% on one-and two-year leases, respectively. And even without any increase, both tenants and landlords – along with the rest of the country – will continue to struggle through their expenses. Only time will tell whether the recent rent hikes were a wise choice.
