Hiking The Rents

Let’s turn to a topic I imagine every renter has a well thought-out and unbiased opinion on: How much should your landlord be able to raise your rent?

Not much, I’m sure you’re thinking. The economy’s tanked, your salary’s stagnant and isn’t the housing market worse than it’s been in years? No one can reasonably expect you to pay much, if any, more in rent. Right?

Of course, the landlords have a different opinion. You might have heard a little something about the rising cost of oil, a commodity that not only runs your car, but very likely also heats your building. Property owners in the city are claiming up to 40% increases in their operating costs over the past several years, while rents have only gone up about 20%. So a larger increase might just be justified.

I ain’t no economist, so I can’t pretend to know what would really be “fair.” That’s why we have the NYC Rent Guidelines Board, a lovely committee that holds a raucous meeting to discuss and vote on the authorized rent increases for the more than one million Rent Stabilized apartments in NYC. They met last week, the results are in and…

They approved the largest increase in rents since 1989!

One year lease renewal increases are going up a point and a half to 4.5% and two year renewals to 8.5%. This means if you’re paying $1000 a month for your shoe box studio (and you’re very lucky if you are), your rent on a one year renewal will be going up $45. $90 if you’re paying $2000 (a little more likely). Ouch!

But in even bigger news, the Board also approved a supplemental increase for any tenants who have lived in their apartment for six years or more. Landlords can opt out of the percentage increase for these residents and hike the rent a flat $45 for a one year renewal or $85 for two. (FYI – a two-year renewal is almost never a good deal. Certainly not with these increases.)

So chalk one up for the landlords. And if you have a little extra money left over, go invest in real estate in the backwater areas of the outer boroughs. Because pretty soon, those are the only places any of us will be able to afford.

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