Landlord incomes climb in NYC, touching off annual battle over rent increases
The board that decides on lease adjustments for millions of rent-stabilized New Yorkers held its first public meeting of the year on Thursday in which they set the stage for the fraught annual battle between landlords and tenants over rent hikes.
The nine-person Rent Guidelines Board (RGB) — whose members are appointed by the mayor — met to discuss the findings of a new report from their staff analyzing the business side of rent-stabilized homes based on numbers from 2022, the most recent year data is available.
It found that, citywide, landlords whose buildings contain rent-stabilized units saw a 10.4% annual rise in net operating income, or the revenue left over once they’ve paid operating expenses.
It was the first such increase in three years, with revenues exceeding operating costs “in nearly all buildings,” according to the study.
But that growth was concentrated in Manhattan buildings, specifically in the “core” area below West 110th Street and East 96th Street, where net operating income skyrocketed 42.3%. That’s compared to a 0.3% bump in the rest of the city and a dramatic 14% drop in the Bronx.
Landlords collected an average monthly rent of $1,578 per unit, a 7.4% increase from 2021.
At the same time the proportion of distressed properties — where maintenance costs outpaced gross income — rose by a single percentage point to 9.8%, with 44.3% located in Manhattan.
The Legal Aid Society said the report “underscores the bleak reality that New Yorkers in rent-stabilized housing face on a daily basis.”
“While more than half of residents across the City are rent burdened, paying more than 30 percent of their income towards rent, landlords continue to reap huge profits,” the organization said in a statement. “By landlords’ own logic, if a decrease in the NOI justifies a rent increase, then an increase in the NOI — particularly as high as this year’s — should justify a rent freeze.”
But the landlord lobby immediately seized on the data to essentially argue for the opposite, pointing to the dire Bronx stats and uptick in distressed buildings.
“This data is from 2022. Things got worse in 2023,” said Jay Martin, executive director of the Community Housing Improvement Program (CHIP). “If something is not done immediately, these buildings will fail and tenants will suffer.”
It comes as New Yorkers are grappling with an ongoing housing shortage and affordability crisis. Last month’s Housing and Vacancy Survey found that just 1.4% of rental apartments are available, a nearly 60-year low.
The rent guidelines board will take Thursday’s study and other research from their staff, plus expert and public testimony, into account when deciding whether or not to greenlight rent hikes this year. A final vote in the summer is typically preceded by public meetings across the five boroughs where tenants ask the board not to raise rates.
Last year the board — which consists of public, landlord and tenant representatives — okayed a 3% rise for one-year leases and increases of 2.75% and 3.2% over the span of two-year leases.
