Inside Prospect Acquisitions\u2019 Investment Strategy<\/a><\/p>\nBeginning Oct. 1, the proposed range for rent hikes on two-year leases for rent-stabilized apartments will be 0 percent to 4 percent, and 0 percent to 2 percent on one-year leases for rent-stabilized units.\u00a0<\/p>\n
The decision impacts roughly 1 million apartments across the five boroughs, or 40 percent of the city\u2019s rental housing stock, and set off a firestorm within the real estate industry in America\u2019s largest city.\u00a0<\/p>\n
The vote came hours after Christina Smyth, a landlord representative and a member of the Rent Guidelines Board since 2022, resigned from her seat and issued a critical resignation letter. Smyth accused the board of ignoring the law and voting to appease the preferences of the new mayor, rather than follow facts supported by public testimony and data.\u00a0\u00a0<\/p>\n
\u201cThis year\u2019s [Rent Guidelines Board] order was decided last year on the campaign trail,\u201d Smyth wrote. \u201cEverything since has been theater. The hearings, the reports, the public comment, the data. None of it was ever going to change the result.\u201d<\/p>\n
Mamdani, who took office in January, promised during his campaign \u2014 in which he defeated former New York Gov. Andrew Cuomo \u2014 to freeze rents on New York City\u2019s rent-stabilized units.\u00a0<\/p>\n
The 34-year-old Democratic Socialist, who won the mayor\u2019s race running as a Democrat, appointed six of the nine members to the board over the last six months.\u00a0<\/p>\n
The Rent Guidelines Board is typically made up of five members among the general public, two landlords representatives, and two tenant representatives, with mayors generally having latitude over its makeup.\u00a0<\/p>\n
On Thursday, Mamdani welcomed the decision, calling it \u201ca historic victory for New York City tenants,\u201d in a statement issued by his office.\u00a0<\/p>\n
Thursday\u2019s vote creates an unprecedented situation in New York, as this is the first time the board has ever chosen to freeze rents for one- and two-year leases since the board began issuing rental-rate guidance in 1969.\u00a0<\/p>\n
Moreover, rent freeze is a relatively new phenomenon in New York City. The Rent Guidelines Board first voted in 2015 to freeze rents, and voted for two more freezes during the mayoralty of Bill de Blasio, including once during the emergency of COVID-19.\u00a0<\/p>\n
In each case, the freeze applied only to one-year leases. Normally, the board has voted on either small or substantial changes in rental rates, and has often been a lightning rod for controversy across the political spectrum of city affairs.\u00a0<\/p>\n
But with New York City\u2019s vacancy rate sitting at a mere 1.4 percent, Mamdani\u2019s administration made lowering rents a priority for the first-term mayor.\u00a0<\/p>\n
\u201cI\u2019ll continue working to deliver a more affordable city by building and preserving affordable housing, lowering building operating costs like insurance, and ensuring tenants know their rights,\u201d Mamdani said in a statement Thursday.\u00a0<\/p>\n
But not everyone is happy with the decision or the mayor\u2019s priorities.\u00a0<\/p>\n
With an eye toward increased costs at a time of high interest rates, as well as rising insurance and energy costs, advocates for the real estate industry responded with blistering denouncements, noting that a rent freeze will hamper operations for the city\u2019s landlords.\u00a0<\/p>\n
James Whelan, president of the Real Estate Board of New York, accused the Rent Guidelines Board of ignoring its own data and called the vote \u201ca terrible decision,\u201d in a statement.\u00a0<\/p>\n
\u201cOlder rent-stabilized buildings are already struggling under rising operating costs, yet the board chose to disregard those realities,\u201d said Whelan. \u201cThis decision will mean less investment in maintenance and repairs, accelerating the deterioration of the housing stock that millions of New Yorkers call home.\u201d\u00a0<\/p>\n
Even the Community Preservation Corporation, a nonprofit that works to improve affordable housing across New York City, noted that a rent freeze likely won\u2019t improve living conditions in rent-stabilized buildings.\u00a0<\/p>\n
\u201cRegardless of an RGB decision to freeze or raise rents, the outcome won\u2019t solve the underlying issues of rental affordability for tenants, or the financial and physical distress plaguing rent-stabilized buildings,\u201d said Rafael E. Cestero, president and CEO of the CPC, who added that these issues need to address the costs landlords face \u201cto keep housing safe, stable, and livable.\u201d<\/p>\n
In her strident resignation letter, Smyth used even more biting language to describe the vote and fact-finding process.\u00a0<\/p>\n
\u201cI cannot in good conscience validate a process I believe is completely unjust,\u201d Smyth wrote. \u201cOwners and tenants deserve better.\u201d<\/p>\n
Brian Pascus can be reached at bpascus@commercialobserver.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"A freeze is on the way this summer across the Big Apple. The New York City Rent Guidelines…\n","protected":false},"author":2,"featured_media":278912,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[58541,48036,9,56,63,65,64,107175,82],"class_list":["post-278911","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york-city","tag-christina-smyth","tag-james-whelan","tag-new-york","tag-ny","tag-nyc","tag-nyc-headlines","tag-nyc-news","tag-rafael-e-cestero","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/278911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=278911"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/278911\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/278912"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=278911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=278911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=278911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}