Board Approves Rent-Stabilized Hike of 2.75%

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The New York Sun

Despite the boos and chants of an unruly audience, the Rent Guidelines Board voted yesterday to allow rent increases of 2.75% for one-year leases and 5.5% for two-year leases for the year beginning October 1.


For tenants who must provide their own heat, maximum hikes are 2.25% and 4.5%, the same increases that will apply to lofts. The decision, which affects about 1 million households in the five boroughs, came after hours of protesting and debate between tenant and landlord activists.


More than 100 of the tenant supporters – by far the more vocal group present – gathered outside Cooper Union at 4:30 p.m., holding signs with messages such as “Bloomberg to Tenants: Drop Dead” and “Hey Mike – Keep your Promise.” The crowd marched and chanted nonstop until the doors opened 45 minutes later, then filed into the historic Great Hall, continuing to cheer and wave signs.


Throughout the meeting, board members were often drowned out by the crowd. The two board members representing landlords, Harold Lubell and Steven Schleider, could rarely be heard over their critics.


The small group representing landlords formed an island to one side of the auditorium, holding signs that said “Help Small Owners.”


A board member representing tenants, David Pagan, made a motion for 0% increases on both one- and two-year leases, which was struck down, but earned the vote of a public member, Martin Zelnik.


“I feel right now that this process is inherently unfair to the tenant side of the equation,” Mr. Zelnik said, to loud cheering.


Another proposal by Mr. Lubell was also struck down before the board voted 6-3 to pass the motion proposed by its chairman, Marvin Markus.


Passions ran high on both sides of the issue, with intraboard arguments reflecting the louder battle in the audience.


“From 1989 to 2003, landlords have seen their net income increase,” a tenant member of the board, Adriene Holder, said, “despite the fact that working New Yorkers have not seen an increase in their income, and there has even been a wage erosion.”


Mr. Lubell called the request for a rent freeze ridiculous, saying the city might as well freeze real-estate and oil prices as well. He also asked the audience to bear in mind that landlords have experienced an 8.7% loss in net operating income, as presented in the board’s 2005 Income and Expense Study of the 2002-03 season.


“Expenses continue to escalate,” Mr. Schleider said, adding that operating costs have outweighed rental income year after year.


The intensity of the debate stemmed largely from the board’s decision, for the second year in a row, not to offer specific recommendations during its preliminary vote, held on May 3. Instead, board members proposed a range of increases for rent-stabilized apartments: between 2% and 4.5% for one-year leases and between 4% and 7% for two-year leases.


The motion also stipulated that there would be no vacancy allowance, supplemental adjustment, or equalization allowance. A sublet allowance was set at 10%. Mr. Markus defended the motion by saying the job of the board is to “make an informed judgment balancing the needs of both landlords and tenants.” His comment was met with loud booing.


The New York Sun

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