Are members of the city's rental guidelines committee aware that inflation is currently at 8.6%? If so, what were they thinking when they limited therent increaseto 3.25% on a one-year lease and 5% on a two-year lease on Tuesday?
Certainly, the upper limit applied to apartments with stable rents of 1 million in the city does not match the actual market conditions, so it can cause serious harm to both tenants. There areandlandlords.
The majority of the five members of RGB may have thought they were in good balance. Tenant activists wanted a low cap, while landlords wanted a high cap. However, it was apoliticalcalculation, anddid not take into account the economic implications.
After all, how are landlords supposed to earn income when costs are rising faster than rent income because of such restrictions? And this is after the yearof De Blasio, where rent was actually frozen, or limited by a minimum rent increase, and during the pandemic, owners did not earn any rent income. Only a few months later, thanks to the moratorium of eviction of peasants.
Yes, big business landlords may be able to survive this latest hit (although new and affordable, especially after Albany imposes significant taxes). Don't expect to sink a lot of new money into priced homes, breaks that mean spurring such home development will expire this year).
But moms and pop owners don't. They struggle to expect relief, but in the meantime, they probably refrain from repairs or upgrades. It is reminiscent of the 70's and 80's when the landlord collapsed or abandoned the building.
Progressivists ridiculously sought to freeze morerents, but are now dissatisfied with hiking too expensive. Don't worry about tenants' generous COVID unemployment allowances and stimulus checks, and higher wages currently paid when the labor market is tight. And because there is no means test for these apartments, many rent-controlled tenants are actually quite wealthy.
Even Mayor Eric Adams, the proposed hike, nevertheless. He expressed "disappointment": higher rents "burden the tenants", he lamented.
At least Adams acknowledged the difficulties for moms and pop owners and the possible consequences for tenants. The life of a tenant worthy of living in a well-maintained modern building. This system is broken.
He's right! Gotham has been rent control for 80 years, during which time he has never spent a day without a shortage of housing. Fair market rent, on the other hand, promotes housing development and guarantees sufficient income to maintain the building properly. Alas, in 2019Albany withdrew even an attempt to phase out some high-end rent-stable apartments.
Don't expect a broken system to be fixed soon.
