New York rent hearings grow rancorous with freeze under consideration

New York's Rent Guidelines Board will decide Monday about a rent freeze

Hisses filtered through the crowd as Loren Renz lamented the harsh winter's impact on her brownstone near Central Park, a building she bought 35 years ago.

She had spent more than $50,000 since January fixing problems related to months of icy weather, Renz told the Rent Guidelines Board, which has the power to decide how much she can charge tenants in her building.

"Poor baby," a woman sitting in the audience amid a group of renters muttered sarcastically.

Soon, it was the landlords' turn to sneer as the verbal slugfest pitting renters against landlords unfolded last week in a Manhattan auditorium. "Booooooo!" a building owner shouted as a city councilman urged the board to impose a two-year freeze on rents for the 1 million residences subject to regulation.

In a city where the average rent tops $3,000 a month, these annual hearings are never quiet affairs. But this year's have been more rancorous than usual, because for the first time since its creation in 1969, the board is considering a rent freeze, starting Oct. 1, when it makes its decision Monday.

It's a move landlords say would exacerbate the housing crisis by driving up market-rate rents to cover property owners' costs. But tenants say a freeze and even a rollback are crucial to preventing New York from being off-limits to all but the wealthy.

"If not for the rent stabilization, our neighborhood would transition to one which only the rich could afford," said Glenn Richter, a retiree who has lived in his rent-regulated apartment on Manhattan's Upper West Side for 42 years. "We would lose the diversity which is the strength of New York City."

Many politicians representing districts that have undergone rapid gentrification agree. "A rent freeze is the only responsible option," said Councilman Mark Levine.

More than 140 U.S. municipalities — including Los Angeles, Oakland and even Beverly Hills — have rent controls imposed in response to low vacancy rates and soaring rents. Nowhere is the issue as heated as in New York, where two-thirds of housing units are renter-occupied — double the national average.

According to the last citywide survey, from 2011, the vacancy rate for rental units was 3.12%, below the 5% threshold for ending rent regulation.

Small-building owners such as Renz say although they sympathize with working-class and poor New Yorkers, landlords are suffering under a system that has failed to take tenants' incomes into account as property taxes and maintenance costs soar.

"You can't live in paradise forever," Renz said of people in rent-regulated apartments, who often remain in them until death.

The last time Renz was able to bring one of her four rent-regulated apartments up to market-rate prices was in 2006, after the longtime tenant died. He was paying $450 a month when the neighborhood's median rent was about $1,200.

A few miles south, a penthouse apartment in the heart of Greenwich Village with a wraparound balcony and glorious views goes for $1,400. "That's a $7,000-a-month apartment," the building's owner, Jimmy Silber, said.

Silber said many tenants in the building, which has been in his family for decades, have weekend homes in the Hamptons and earn hefty, six-figure salaries.

"I don't resent them at all," he said of those lucky renters. "I resent the system. Why can't I be permitted to participate in the American dream and make a profit?"

Silber and Renz fear things will get worse for landlords under Mayor Bill de Blasio, who was elected in November on promises to create more affordable housing. He recently appointed six new members to the nine-member Rent Guidelines Board.

New York City's rent regulations have gone through several iterations over the decades. Apartments in buildings constructed between 1947 and 1974 may be subject to varying degrees of restrictions, depending on how long tenants have occupied them, how many major improvements landlords have made, and how much rents have increased as a result of hikes approved by the board.

Once an apartment's rent hits $2,500, it is not subject to rent restrictions. Tenants say the board's granting of price increases over the years has caused a steady erosion of affordable rentals since the 1950s, when the city had more than 2 million rent-controlled apartments.

In 2008, at the height of the recession, the board approved a 4.5% increase on one-year leases for rent-regulated apartments, and an 8.5% increase on two-year lease renewals. Last year's increase was 4% for one-year leases and 7.75% for two-year leases.

Housing experts say that in a densely packed, expensive city, building new housing is a challenge.

"This, combined with the city's growing economy and rising population, inevitably puts upward pressure on rents," said Mark Willis, executive director of New York University's Furman Center for Real Estate and Urban Policy.

The center's 2013 study on New York's housing situation said that 54% of the city's renters were "rent burdened," meaning 30% or more of their income went to rent.

Nobody, it seems, is immune to the lure of a rent-regulated apartment. Former Mayor Ed Koch kept his Greenwich Village apartment, which cost less than $500 a month, even after winning the right to occupy the mayoral mansion on the Upper East Side.

In 2011, a landlord sued actress Faye Dunaway, alleging she had lied about her primary residence to hold onto a rent-regulated one-bedroom unit in Manhattan. Dunaway, who had been paying $1,074 a month, denied wrongdoing but gave up the keys.

Tenants complain about landlords claiming major improvements — while making shoddy repairs — to justify raising rents beyond the $2,500 upper limit. One landlord resorted to murder. A jury in 2005 convicted the Queens man, Juan Basagoitia, of hiring hit men to kill two tenants to get them out of their rent-controlled apartment. The pair survived.

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