[theme music]

Protesters: [chanting] Freeze the rent. Freeze the rent. Freeze the rent. Freeze the rent. Freeze the rent.

Brigid Bergin: It's The Brian Lehrer Show on WNYC. I'm Brigid Bergin in for Brian Lehrer today. A little sound from last night's Rent Guidelines Board meeting. Freeze the rent has become a repeated refrain this political season. It was one of the key planks in Democrat Zohran Mamdani's mayoral platform. Now, he was only talking about the roughly two million tenants in rent stabilized apartments. Last night the Rent Guidelines Board met to adopt rent rates for one and two year leases, and there will not be a rent freeze this year.

Rents are going up by more than the minimum amount, but less than the max they could have gone up. Rents will rise 3% on new one year leases and 4 1/2% on new two year leases. That's all starting in October, just before the general election, I will note. WNYC and Gothamist housing reporter David Brand was at that meeting last night and joins me now. Hey, David.

David Brand: Hey, Brigid.

Brigid Bergin: Listeners, do you live in a rent stabilized apartment or are you a landlord for buildings with rent stabilized tenants? We want to hear from you. How are you feeling about the increases adopted last night? How much will you feel it in your pocketbook? If you're a tenant, is there any relief that the increase wasn't higher? If you're a landlord, is this increase enough for you to maintain your building? Since we're talking about the politics of it all, how big of an issue is this for you in the New York City mayor's race?

Call us at 212-433-WNYC. That's 212-433-9692. You can call or text at that number. We heard those chants, David, but set the stage for last night's meeting. The board also met back in the spring. What did they decide then and what was on the agenda for last night?

David Brand: Sure. Yes, let's set the stage, because if you are a listener, you don't live in a rent stabilized apartment, or maybe you live outside New York City and you don't know what this is all about, there are about a million apartments in New York City where the rent you pay each year is basically decided by this nine member board. They're all appointed by the mayor. It's one of the most consequential decisions and it gets-- as you heard in that opening clip, it activates a lot of people. Tenants don't want them to vote on a percentage increase that's very high. They call for a freeze. Landlords say, "No, we need to increase rents even higher than what they're considering, because our expenses are rising."

So it really inflames passions here. Maybe never more so than this year, because as you mentioned, it's been a huge part of the mayoral campaign with Zohran Mamdani calling for a rent freeze, joined by a number of other competitors in the Democratic primary. Heading into last night, they were considering a preliminary range that they voted on in April that would have been between 1.75% and 4.75% on one year leases, 3.75% and 7.75% on two year leases. They landed somewhere in the middle. On one year leases, 3%. On two year leases, 4.5%. Definitely not a rent freeze and actually higher than last year.

Brigid Bergin: Interesting.

David Brand: Yes. You talk about the politics of that, Eric Adams weighed in right after and he said he was disappointed in the percentage. People from his administration were kind of working the phones, trying to pressure the members for a lower increase.

Brigid Bergin: Now, it's interesting, because Mayor Adams is certainly not a freeze the rent supporter, but the fact that he had urged these members who he appointed to come in at a lower rate and that they then opted for this higher level, what does that tell you? Again, who are you hearing show up at this meeting last night?

David Brand: Well, tenants have a lot of power in New York City. 70% of the city are renters. They flex that power in this Democratic primary with the presumptive nominees, Zohran Mamdani, running on this very explicit pro-tenant freeze the rent campaign, joined by who became his main surrogate, Brad Lander, who was at the event last night, calling on the board, saying, "You don't have to follow that guidance you voted on, you could do a rent freeze." So, pretty explicit. Just kind of unusual and kind of unique for this campaign in this season.

That kind of energy continues into the meeting. It's always kind of stunning. There's really nothing like it. You have the nine members on stage, they're getting screamed at, there's two members who represent landlords, two members represent tenants, and then five who are public members who are kind of supposed to be detached and kind of weighing like building conditions, landlord expenses, impact of unemployment, federal programs, benefits programs for tenants, how much tenants are paying in rent. They kind of weigh all of that and come to the figure.

Whenever the landlord members speak, those two landlord attorneys, or the public members, mostly economists, they just get totally drowned out by people screaming and banging drums and noisemakers. It's a really, really interesting experience. There's really nothing like it.

Brigid Bergin: I want to go to the phones. We have a mix of tenants and landlords. Let's start with Chris in Woodside. Chris, thanks for calling WNYC.

Chris: Hi, thank you for taking my call. Yes, I'm a property manager, landlord, in Woodside, New York, in Queens. I was actually on-- I went on Friday to the public hearing that was in Manhattan. A couple of things. Again, this marks the ninth year in a row where the research that the Rent Guidelines Board did about our raise in costs for landlords and for property owners is that the one year rent allowable increase is less than the own data that the city came up with. This is the ninth year in a row on that. In case you're wondering, from since 2000 there's only been two times where that they gave equal or larger rent raises in their own data.

Again, because the RGB consistently, consistently gives rent raises less than the increase in actual allowable in our costs, it actually forces landlords to raise the vacant apartments that come available to a much higher value. I might even say this apartment isn't worth this much, but we have to do that in order to offset the constant small raises in rent that aren't keeping pace with our costs. Then finally, while I was at the Rent Guidelines Board hearing, I was disappointed because in the past, if I remember correctly, in the past there used to be representatives from the DHCR. I think there was representatives from the Department of Finance.

What that allowed was, for instance, you hear tenants speak about-- I hear a senior citizen discussing their issue. I hear somebody who said they had a disability. There's programs already existing in the city to provide rent freezes for those tenants. I don't understand why the city is not at the very least on a public hearing, have representatives from those organizations to be able to help out, because I just don't think the city is providing information.

Brigid Bergin: Chris, thanks for that. We appreciate your perspective. Thanks for listening. Thanks for calling. David, I want to give you a chance, since you were at the meeting, were some of those city officials there? What's your reaction to some of what Chris raised?

David Brand: I didn't see any of those city officials there yesterday, though I will say Brad Lander is the city controller still, and so he was there. I think what Chris might have been referring to was the series of public hearings that they have leading up to that vote. They consider all of this research, landlord expenses, Landlord profits, called net operating income, financial situation facing tenants, the situation facing buildings, so building deterioration, code violations in apartments. Then there's also testimony from tenants, from landlords, from elected officials, city officials.

I think that's what he's referring to, and I'm not sure. Yes, I should follow up on that. If the Department of Finance or DHCR, which is Homes and Community Renewal, the state's housing agency that kind of oversees all the rent laws in New York City and New York State, if they didn't actually attend or didn't testify. He's saying, I think, that if you are a person with a disability or a senior, you could qualify for rent freeze outside of the Rent Guidelines Board process.

There's also income limits on that though. So, someone making less than $50,000 as a senior can't actually qualify for that rent freeze. I actually spoke to a tenant yesterday who, she's an organizer. Her name's Elisa Martinez, and she said her father is having that experience.

Elisa Martinez: I grew up in Washington Heights in a rent stabilized apartment. Now I live in another rent stabilized apartment up in Washington Heights. For me, a rent freeze really means that people like my dad can retire in New York City and actually continue living in the same apartment that I was raised in.

David Brand: She says her dad's a handyman. He is thinking about retiring. His Social Security, and maybe he's got a pension as well, would put him just over that $50,000 threshold, so he wouldn't qualify for that senior rent freeze, but also doesn't make enough where he could easily absorb consistent rent increases year after year.

Brigid Bergin: I want to share a couple of the texts that we're getting from listeners. One listener wrote, "I'm a rent stabilized tenant and the granddaughter of my landlord. I have a strange perspective. My rent is so low legally, I'm relieved that the increases are reasonable for my budget. However, the rents that my grandfather is able to collect from myself and other tenants who are also family members are not nearly enough to help maintain our building, let alone make improvements.

We're not rich by any means. I think the city needs to provide lower income landlords more avenues for assistance with core upgrade for the building, such as roofs and boilers." I think that concern is something, David, I know we've heard from callers and some smaller landlords. Does the city provide any support to these smaller landlords?

David Brand: That's a great text, because I think it captures the diversity of tenants and of also property owners and building types, that are all subject to the increases from the Rent Guidelines Board. You have the majority of rent stabilized apartments are in buildings that were built before 1974, and there are buildings that are 100% rent stabilized. Where they really need-- the landlord would really need a rent increase to keep up with expenses and increase revenue. Then there are some buildings that could have 50 units and only one of them is still rent stabilized.

That's really not a big deal, because you have these market rate units you can cross subsidize. Then you have newer buildings that might have been built two years ago, that are subject to tax breaks and to financing from the city, where they qualify-- where the apartments are rent stabilized, but they could have very high rents. So there's a mix of rent stabilized, non-rent stabilized. I think that her experience really captures what we see throughout the city. Back to that question of, are there programs? Under state law, landlords can make individual apartment improvements or major capital improvements and then factor a percentage of that into the monthly rent.

New laws that were established in 2019 kind of limit the amount that they can do that. That's a complaint that many landlords will have. There's also a relatively new city program where landlords can get, it was $25,000 and now it's $50,000 to rehab an empty apartment. That's not even a loan, that's a grant. $50,000 to rehab an empty apartment if they promise to rent to someone with a city housing voucher.

Brigid Bergin: I want to go to Nick in Astoria. Nick, you're on WNYC. Thanks for calling.

Nick: Hi, thank you so much. I have this interesting thing. I have a building in Astoria, it is definitely rent regulated. It's old enough and it has enough units. They even saw on an online database of rent regulated units, my address is there. At the very top of my lease, it says in big capital letters, I'm looking at it right now, "This apartment is not subject to rent regulations." I have a friend who works in real estate who told me that there was actually a small window of time around 2015 or 2017 or something like that, where landlords were allowed to take individual apartments, not like a whole building, but just individual apartments within a building, and they were able to take them out of rent regulation.

I'm not exactly sure why they were allowed to, but that window of time did exist and some landlords took advantage of that. My friend told me it's quite possible that my landlord just took my individual apartment. I didn't move in until 2019, but it's quite possible that the reason my lease says this apartment is not subject to rent regulations is because before I moved in, the landlord took advantage of the window to take it out of rent regulation. Does any of that sound correct to you?

David Brand: Definitely. Between 1993 and 2019, when new rent laws took effect, the city lost about 100,000 or more rent stabilized apartments, many of them legally, because the law that was-- the law established in 1993 said that once rents reached a certain threshold, then a landlord could legally lift them out of the rent stabilization system. I think at the end there, in 2019, it was just under $2,800. To get to that level, there were the annual increases set by the Rent Guidelines Board, but once an apartment became vacant, the landlord could raise the rent on that by 20%.

Combine that with what I had mentioned a couple minutes ago, major capital improvements or individual apartment improvements, where you could factor in the cost of major renovation to the building or the apartment, raise rents that way. So, a lot of apartments were legally lifted out of rent stabilization system before 2019, when the new rent laws in 2019 made that impossible. A lot of apartments were also just kind of deregulated maybe illegally, or there was just no paperwork.

There was initially a window of time where you could look back and say if this was within the past five years, you could challenge that, but that window is closed. Yes, a lot of apartments that were once rent stabilized no longer are.

Brigid Bergin: David, I have another text from a listener, Sal and Inwood, who wrote, "Rent stabilized tenant here. It's my biggest issue. I'm curious if you could discuss warehousing. My rent stabilized building is currently half empty. The super says he's been instructed to just leave units empty. What's with that? Anything we can do?

David Brand: Yes, that touches on a contentious topic, warehousing. There are some number, in the thousands, of apartments, rent stabilized apartments that are sitting empty. Property owners say they leave those units empty after somebody moves out. Especially if it's someone who had lived there for a very long time and the annual rent is relatively low, because it's not worth renovating it, bringing it back online, and then getting a tenant into the apartment if they can't cover their expenses or make a profit, I guess. They would say like, "It's not even about profit. We can't even break even." Because they have to do renovations, there's new lead paint laws and other regulations they have to follow.

It's unclear how many apartments there are like that. That's always a topic of great debate. The city's Independent Budget Office, about a year and a half ago, came out with a report that they found about 13,000 of those. Some people say it's a lot higher, but I tend to go with that number, because that's at least some type of concrete number that the city arrived at with doing their audits and looking through financial documents.

Brigid Bergin: Well, I want to thank my colleague, WNYC and Gothamist housing reporter David Brand for joining me today. You had a busy night covering the Rent Guidelines Board. I think you're going to have a busy day covering these new charter revision proposals related to affordable housing. A conversation for another day. I want to thank our listeners, tenants, landlords, for calling and texting. We know this is a topic that's close to many people's hearts, and we will continue talking about it again on another day.

David Brand: Housing is a hot topic. Thanks, Brigid.

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