Rents for 2 million New Yorkers will rise again this year

In 1974, Ahmad and Ann Shirazi moved into a rent-stabilized apartment on Manhattan’s Upper West Side, though the rent felt high for two bedrooms at $275 a month.

The Shirazis hoped to have children and thought their stay would be temporary. Nearly 50 years later, they’re still here, having raised two kids in a space they made work because it was affordable.

The story of the Shirazis — Ahmad, 84, a retired film editor who worked on the films “Scarface” and “The Bonfire of the Vanities” and Ann, 78, who worked as an illustrator for department stores such as Henri Bendel, reflects the experience of many of the city’s approximately two million rent-regulated tenants, nearly a quarter of the city’s total population.

As New York City became one of the most expensive places in the country, condos with regulated rents and guaranteed lease renewals offered respite to the working and middle class: The Shirazis now pay $1,025 a month, while a comparable unit in their building, which has not stabilized , renting for over $5,600.

As of Wednesday, the city’s huge inventory of rent-regulated housing, which has become one of New York’s main sources of low-cost housing, is about to get a little more expensive. A panel in New York City plans to raise rents in the city’s one million rent-stabilized apartments for a second straight year, citing high inflation and rising costs for property owners.

Last month, the panel, known as the Rent Guidelines Board, supported one-year lease increases of between 2 and 5 percent and two-year lease increases of between 4 and 7 percent, in a tentative vote.

It would be the second time during Mayor Eric Adams’s term — who nominates members of the panel and expresses sympathy for the problems landlords face — that the Rent Guidelines Board would allow stabilized rents to rise. Last year, the panel voted to increase rents for one-year leases by 3.25 percent in rent-stabilized homes and for two-year leases by 5 percent.

The Shirazis, who earn about $4,500 a month in retirement benefits, will find a way to stay afloat, they said. She and several other renters in the city — including higher income earners, retirees who have lived in their apartments for decades and newcomers — said incremental increases helped them find stability in New York City’s otherwise chaotic and unforgiving housing market.

But many also said the moment also reflects something deeper: how people of modest means are finding it increasingly difficult to live in New York City.

As expensive as it is to live in New York, no other U.S. city has such a comprehensive rent regulation system: More than a million apartments — half of the rental market and nearly 30 percent of all New York City homes — are governed by a system started in 1969.

The majority of rent-stabilized housing is in buildings built before 1974. For years, numbers fell as landlords left the program and took more income from higher rents.

However, since 2017, the total number has grown, according to the newspaper a census of units registered with the city and stateespecially as many new units and rehabilitated units were rent stabilized in exchange for tax breaks or subsidies.

While many of the newer units rent at a higher rate and there are no income restrictions associated with rent stabilization, the system mostly benefits those on lower incomes. According to a 2021 city survey, median household income in rent-stabilized apartments was $47,000, compared to nearly $63,000 in private, unregulated units. The median rent in stabilized apartments was $1,400, compared with $1,825 in private, unregulated apartments, according to the study.

The city’s “economic diversity is based on rent stabilization,” said Samuel Stein, a housing policy analyst with the Community Service Society, a nonprofit advocacy for lower-income New Yorkers.

But now the future of the program is less clear.

In the wake of the rental laws passed by leftist state politicians in 2019, property owners say they feel beleaguered and unable to make renting stabilized apartments financially viable. A group of New York City landlords has petitioned the U.S. Supreme Court to overturn the regulations, a case that has drawn the attention of several business groups, including the U.S. Chamber of Commerce, who are calling for rent controls to be lifted across the country. be withdrawn or relaxed. .

Michael Tobman, the director of membership and communications for the Rent Stabilization Association, an industry association, said the system forces private owners to provide a public benefit.

“All they have is rising costs, and this piece, Rent Guidelines Board increases — that’s badly needed,” he said.

The mayor has defended the panel’s approach as a way to protect landlords, at times noting that he is a petty landlord himself, even though he has called on the panel to stay away from the highest elevations.

“We just can’t put tenants in a position where they can’t pay rent,” he said last month.

But many landlords of rent stabilized buildings are large companies. They include developers such as Cammeby’s, Lefrak, L&M Development, each of which has several thousand rent-stabilized units in their portfolio, in addition to market-compliant units. The companies declined or could not be reached for comment.

John A. Crotty, a founding member of the Workforce Housing Group, which has about 1,500 rent-stabilized homes in its portfolio, said increases were warranted because during the tenure of the previous mayor, Bill de Blasio, the panel largely rejected large increases. landlords in a difficult position.

“If you fall below the real cost limit, and then you have a period of hyperinflation, how is this good?” he said. “No matter how great Adams’ increase, it won’t be enough.”

Peter Madden, the executive director of Westbeth Artists Housing, which has approximately 383 West Village condos, the vast majority of which are rent-stabilized, acknowledged the pressures property owners face.

But he also said rent stabilization is the “biggest, most affordable housing program the city has.”

In Westbeth, which also receives some grants from the city, rents for stabilized homes range from less than $1,000 to $2,300 for a three-bedroom home.

“Without rent stabilization, I don’t know how people would do,” Mr Madden said.

For some renters, rent stabilization is a lifeline, especially as the city experiences one of the most brutal rental landscapes in recent memory during a recovery from the worst of the pandemic.

The 2021 survey found that one-third of New York City renters spend more than half of their income on rent. For them, the impending hikes will lead to difficult choices about where else to cut spending.

“A rent increase this year would be about $80 a month more for me,” said Chen Ren Ping, 65, who shares a rent-stabilized apartment in Chinatown where he has lived since 2004. $80, we’d eat better, our lives would be better, we’d have a better quality of life.

Mr. Chen said he earns about $794 a month in Social Security payments. But he said his half of the rent for the two-bedroom apartment is $800, so he does neighborhood repairs to supplement his income.

Ann Shirazi said she was not happy about the upcoming raise for her own household. She is also concerned about the future of the city.

“It was a wonderful place to raise our children,” she said. “And now because of the wealth, it’s completely changed in my opinion.”