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Possible rent freeze at issue in New York

Rent-stabilized tenants in New York City could see a rent increase as high as 4.5 percent or no increase at all. In a move with the potential to bolster Mayor Bill de Blasio's intention of freezing rents for rent-stabilized tenants, the Rent Guidelines Board approved a number of options, including the following:

  • Rent for one-year leases could see no increase at all or an increase of up to 3 percent.
  • Rent for two-year leases could see an increase between .5 percent and 4.5 percent.

Hundreds of people gathered for the recent preliminary vote. Many attendees carried signs and loudly urged the board members to vote one way or another. The preliminary vote was 8-1 in favor of the proposed options. However, an executive with the Rent Stabilization Association, which represents about 25,000 managers and owners of rent-regulated residential properties, characterized the possible rent freeze as "a disaster for the mayor's housing plan."

Landlords say a rent freeze would lead to a reduction in affordable housing, as landlords would choose to disinvest. The landlords also referred to data indicating that costs for owners had increased by 5.7 percent in roughly the last year.

Board members who represent tenants pointed to the reduction in tenant incomes in the last several years, along with an increased number of eviction proceedings.

So far the board has held four public hearings, and a final vote on possibly freezing rent for rent-regulated tenants has been scheduled for June 23.

Our real estate law website has more on issues related to rent-regulated properties.

Source: The Wall Street Journal, "Rent Board Eyes a Freeze," Josh Barbanel, May 5, 2014

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