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On Tuesday, the Rent Guidelines Board will be meeting to establish preliminary increases for Rent Stabilized apartments 2024-25 lease renewals.
Each year, I am surprised the stabilized increases for newer apartments (most specifically 421a buildings) are not in a completely different category than RS apartments built decades ago. It seems to me, the rent guidelines board needs to start separating/categorizing these in some way.
1) Does anyone know where I can find factual data on the average costs for RS apartments in NYC? It appears to be $1555 per month. Rent for newer stabilized units is considerably more than that average - actually double that based on the latest lotteries. A 5% increase in newer RS buildings buildings is much more significant, and more of a burden, than a 5% increase for New Yorkers paying the average RS rent of $1555.
2) In newer 421a buildings, the market rate rents have not increased significantly in recent years. If the board increases rent for the stabilized units, the cost for the stabilized units will creep up toward the same cost of the market rate units in the very same building. Right?
3) A building with 100% RS apartments and no market rate apartments should have different rules than a building that is 75% MR and 25% RS; especially if the building is very old. Doesn't that make more sense? An older building cannot continue to operate with minimal increases for the grandchildren of the original renters; it will just be abandoned. It's sad, but its true.
The needs of buildings, renters and landlords in the apartments built in 1924 vs. 2024 are vastly different. It is not logical for the Board to be trying to establish single guidelines for these needs all commingled together as one group. I must be missing something since I have never seen comments or articles about this.
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You seem to have combined Rent Control units with Rent Stabilized units. They are different animals. It can get complex as I recall. For example a Rent Control unit can become a Rent Stabilized unit but.not the other way around. You can look that up.
Today’s Rent Control units are grandfathered in. The number of Rent Control units declines over the years even if the unit itself survives and becomes Rent Stabilized, as I recall. You might consider, excluding Rent Control units from your investigation.
The typical term used to refer to both types of units is “rent regulated”.
I suspect many local universities have studied such rent regulation issue for decades. Also, various groups pro and con have published on it.
Your post has generated a thought problem in my mind. Have tenants ever found a reliable way of contributing funds in excess of regulated rent towards improvements in the building? For example, a fund for a better or new laundry room or to improve the elevator.
RS laws do not break down units between older buildings versus new; it's one set of increases in rent for all units under RS system.
Owners of older buildings would love to have things broken down as their costs are higher. But majority of poor, busted and others RS tenants who are financially stressed often live in such buildings. They're usually ones every year calling for rents to be frozen or rolled back. Thus any system that would impose higher increases on such older units won't fly in current political climate. If people can't afford 2%-4% increases per year, they'd lose their minds at 5% to 8% or even 10%.
How fast RS units reach market rate in lottery "affordable" or "low income" housing would depend on spread between market rate rents and how steep yearly increases are for RS units.
Unit renting for $1500 that otherwise would go for $3900 would take decades of increases at between say 5% to 8% to catch up. Since RGB rarely has approved such increases in recent memory, going with 2% to 4% won't get that RS rent anywhere near market for ages.
Understand what you're saying, and plenty of RS professionals and LLs agree, but it won't happen with current political climate in Albany, NYC and other parts of state.
Too many people have a vested interest in portraying *all* RS tenants as poor, busted and distressed. They exclude those who aren't as outliers and want system to remain as is; one cohesive set of laws for all RS tenants. Separating out those who live in older buildings versus new would largely be dividing the poor (so called) from better off (or in case of lottery tenants, lucky) from everyone else. It just won't happen....
On Tuesday, the Rent Guidelines Board will be meeting to establish preliminary increases for Rent Stabilized apartments 2024-25 lease renewals.
Each year, I am surprised the stabilized increases for newer apartments (most specifically 421a buildings) are not in a completely different category than RS apartments built decades ago. It seems to me, the rent guidelines board needs to start separating/categorizing these in some way.
1) Does anyone know where I can find factual data on the average costs for RS apartments in NYC? It appears to be $1555 per month. Rent for newer stabilized units is considerably more than that average - actually double that based on the latest lotteries. A 5% increase in newer RS buildings buildings is much more significant, and more of a burden, than a 5% increase for New Yorkers paying the average RS rent of $1555.
2) In newer 421a buildings, the market rate rents have not increased significantly in recent years. If the board increases rent for the stabilized units, the cost for the stabilized units will creep up toward the same cost of the market rate units in the very same building. Right?
3) A building with 100% RS apartments and no market rate apartments should have different rules than a building that is 75% MR and 25% RS; especially if the building is very old. Doesn't that make more sense? An older building cannot continue to operate with minimal increases for the grandchildren of the original renters; it will just be abandoned. It's sad, but its true.
The needs of buildings, renters and landlords in the apartments built in 1924 vs. 2024 are vastly different. It is not logical for the Board to be trying to establish single guidelines for these needs all commingled together as one group. I must be missing something since I have never seen comments or articles about this.
As a broad statement, there should be a way to pump more money into older buildings to maintain them. But tell the individual tenants that will likely get a hearty version of I can't/won't pay more, even while complaining/pointing out the deficiencies.
Another overwhelming issue is the difference in rents within an individual building. I can easily say why should someone at 60 AMI pay that much less for the same space/appliances/services as 130 AMI or market rate in the same line? % rent increases mean that one persons $35/month increase is another's $85/month increase.
As a broad statement, there should be a way to pump more money into older buildings to maintain them. But tell the individual tenants that will likely get a hearty version of I can't/won't pay more, even while complaining/pointing out the deficiencies.
Another overwhelming issue is the difference in rents within an individual building. I can easily say why should someone at 60 AMI pay that much less for the same space/appliances/services as 130 AMI or market rate in the same line? % rent increases mean that one persons $35/month increase is another's $85/month increase.
Nigh on impossible to solve in this forum.
Prior to 2019 rent law changes there was; LL's could recoup money spent on their property via MCI capital increases. New laws give LLs peanuts in return for money spent, so they don't bother any longer.
"The needs of buildings, renters and landlords in the apartments built in 1924 vs. 2024 are vastly different. It is not logical for the Board to be trying to establish single guidelines for these needs all commingled together as one group. I must be missing something since I have never seen comments or articles about this."
Oh, the rental lobby will talk to you about this. I'm not sure why, if you yourself are actually a renter, you'd think this was a good idea, unless you're slow-witted.
"New laws give LLs peanuts in return for money spent, so they don't bother any longer."
What is this even supposed to mean? The MCI cap is lower (2% vs. 6%), but it's only meant to recover costs anyway, not to increase returns. If you're actually holding onto the building, you'll still recover the money. If you're buying a building to jack up the rents with inflated renovation "costs" in the hopes of selling it on to a bigger fool in three years, I guess it's less convenient.
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