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Brian Lehrer: Brian Lehrer on WNYC. In case you haven't heard, the largest rent increases since 2013 may soon go into effect for the 2 million New Yorkers living in rent-stabilized apartments. New York City's Rent Guidelines Board under mayoral control voted to approve increases of 2% to 4% for a one-year lease. The exact range within two to four to be determined, and 4% to 6% for two-year leases.

Now, this signals a shift from the de Blasio era during which rent increases were kept significantly lower for the most part. On the campaign trail and during these early days of his administration, Mayor Adams has expressed concern about mom-and-pop landlords and their ability to weather the economic toll of the pandemic eviction moratorium and now of inflation. Here is Adams last month.

Mayor Adams: When we think about landlords, we think about the mega guys. We think about those who have thousands of units, but these small mom-and-pops have been decimated. They've been impacted by the COVID issue. Some of them may lose their buildings. What happens if they lose their buildings? The mega guys come in, buy the buildings and now we see the gentrification that we all say we fear. We must be fair here, allow tenants to be able to stay in their living arrangements, but we need to look after those small mom-and-pop owners.

Brian Lehrer: Maybe these increases are a way that the mayor intends to look after those small mom-and-pop landlords and thereby keep tenants out of the clutches of big corporate landlords or maybe they'll just pad the profits of the so-called mega guys. What about the tenants? We'll get the latest now from Mihir Zaveri, reporter covering housing on the New York Times Metro desk. Mihir, thanks so much for doing this with us. Welcome to WNYC.

Mihir Zaveri: Sure. Thank you so much for having me.

Brian Lehrer: Listeners, right away we'll open up our phone lines for your calls or questions about this very close to home, in your home topic, the proposed rent guidelines, and rent increases for 2 million of you. Rent-stabilized tenants, we want to hear from you, landlords too. 212-433-WNYC, 212-433-9692, or tweet a question or comment @BrianLehrer. The rent increases endorsed by the board, as we said in the intro, range from 2% to 4% for a one-year lease, 4% to 6% for a two-year lease. How did they arrive at that figure?

Mihir Zaveri: The board takes into account a bunch of different factors. One of the factors is the cost that are borne by property owners. They do a study pretty much every year, pretty similar. It looks at taxes, labor costs, fuel, utilities, maintenance, insurance costs, other things like that. One of the main factors that we're looking at here is how these costs have risen in the past year. They're also looking at, of course, affordability concerns, the ability of people to pay their rent, the effect of the pandemic. There's a bunch of different things that go into it.

Brian Lehrer: Was it the dubiously named Rent Stabilization Association? The landlord's group that exists to weaken or abolish rent stabilization. Mainly pushing for the steeper increases that seemed to have now been compromised down because I think the political reality here right now is the landlords, according to your article, the landlords are sounding like they're really unhappy and the tenant advocates are sounding like they're really unhappy?

Mihir Zaveri: Yes, absolutely. To some degree, this is something that happens every year. There's a lot of intense jockeying and lobbying over the numbers, but yes, you're right. I think there were some numbers that were put out ahead of the meeting that had rents rising as high as 6% on one-year leases, as high as 9% on two-year leases. In that context, some of these groups were really pushing for those numbers. In the aftermath of these middle ground numbers that they arrived at. Like you say, the Rent Stabilization Association is basically saying, "This is a disappointment. It's not enough."

Brian Lehrer: What types of buildings do most people in rent-stabilized units live in? Are they by and large in multi-unit apartment buildings, which might be corporate-owned big multi-unit apartment buildings, or are they in two or three-family homes that are more likely to be owned by mom-and-pop landlords like the ones Mayor Adams likes to talk about?

Mihir Zaveri: By and large the typical rent-stabilized building where it was a building with more than six units before. When this law was established in 1969, it was six or more units built around wartime. It's actually not super easy to answer that question because, over the years, there's been a various variety of tax incentives, affordability programs that have been attached to making a building or a unit rent-stabilized.

Part of the issue here is that a lot of the data that they're looking at is involving buildings that have some mix of rent-stabilized units and non-rent-stabilized units. One analysis that the Rent Guidelines Board did-- the staff actually found that about 14% of rent-stabilized units were in buildings that-- was essentially what they called a tiny landlord, a landlord that owned one building and something close to 17% of rent-stabilized units were in buildings that were classified as very large landlords, landlords that own more than 60 buildings. It's, again, not super easy.

There's a lot of reasons why this data is probably not complete, a lot of reasons where you could nitpick with it, but that's one way to get some sense of what the distribution is. Just another quick analysis. They looked at all the different unique landlords that own rent-stabilized units and they found that 60% or more owned 10 or less units and that 2% or more own 76 to 100 units, 9% own more than 100 units. There's a distribution here. It's not exclusively small buildings, small owners, but there's different ways to cut the data.

Brian Lehrer: Yes, but you're saying 60% of the landlords in the rent stabilization system own 10 units or less.

Mihir Zaveri: Right. They could still have multiple buildings, have many buildings that comprise 10 units or less, but again that's--

Brian Lehrer: They could have multiple buildings, right. It's tough because inflation may in fact erode some of the profits that landlords, big and small, might have expected to make or even put them in the red depending on their expenses. It also eats away at the earnings of tenants, who may have already been on the brink of housing insecurity. Is inflation an argument to hike the rents or is inflation an argument to keep the rents stable? How does the Rent Guidelines Board answer that question for itself? How much actual data does it get about whether landlords will continue to stay in business or be able to?

Mihir Zaveri: That's absolutely one of the big factors they're looking at. Inflation right now is extremely high in New York City, especially compared to the past during the de Blasio years when they didn't really raise the rents that much. The inflation was fairly low for most of his administration, that's absolutely one factor. Like you say, it cuts both ways. People aren't making as much money to compensate for the inflation.

It's a big deal. I think it's also just important to just remember the context, which is that New York City is in a housing crisis. There are people who can't afford-- whether or not inflation was a factor, they're struggling to afford the rent. It is a factor for landlords, absolutely. I think that's one of the reasons why this particular meeting and this particular rent increase is such a significant one. It's almost an impossible task here.

Brian Lehrer: Few more minutes talking about rent stabilization, Rent Guidelines Board, I should say, in New York City and their recommendations for 2% to 4% increases for one-year leases, 4% to 6% increase for two-year leases. Should we digress for just a second and talk about the logic for individual tenants of choosing a one-year lease versus a two-year lease or vice versa?

On the surface of it, you say, "Well, I could start paying 2% a year more for my one-year lease or I could start paying 4% a year right away more for my two-year lease. Why would I do that?" I guess those who choose the two-year lease are gambling that the increase next year will be even more?

Mihir Zaveri: Yes, potentially. There's other reasons that maybe you have a two-year lease. You don't want to go through having to potentially find another place or you want stability. A one-year lease gives you more flexibility and things like that, but you're right. That's absolutely one thing that people are considering.

Brian Lehrer: Tulis in Harlem, you're on WNYC. Hi, Tulis.

Tulis: Hi, Brian. Thank you for taking my call. I have two questions. One is why are we giving the rent increase to those people that own multiple, multiple, multiple buildings? I understand about the smaller landlords who need the money but is there no way to distinguish? I was listening to the numbers. My landlord is in Harlem, and he owns hundreds of buildings and he's not a very good landlord. He's got outstanding complaints. Does that enter into it at all, if they have outstanding complaints? It's just weird that these big landlords who are giving quality service to their tenants are getting the increases, and I understand about the smaller landlords, I get that.

Brian Lehrer: It's a great question and one I've asked at times in the past and never really gotten a good answer to. I wonder if you know as a reporter on this bid, is there any ever any conversation of having different policies for landlords of different sizes, so that the distinction that the mayor makes between the mega guys and the small mom-and-pop landlords. If their finances are really different can the mom-and-pop landlords, let's say, up to a certain number of units, or however they want to measure it be protected differently?

Mihir Zaveri: Yes, part of the issue here is the data. I think both the landlord side and the tenant side will find reasons to dispute the data that the board looks at and receives. Sometimes the expense data they're filed by landlords don't actually match up with what the actual expenses are, or they sometimes seem to be overestimates. That's one critique that's often used.

I think even the bigger landlords will say that operating a rent-stabilized unit you're essentially trying to maintain an upkeep, a below-market-rate unit that can't sustain itself on its own to some degree. That's the argument that they make. In that case, even if you're a bigger landlord, that you have multiple units if you feel that you're not earning the money out of rent to upkeep these units, then you're questioning, "Well, how can I do this?"

To your point about how the conditions are, one thing that is a real concern, and not just from the landlord side but also just many housing experts will say. If we don't have enough rental income to maintain the fast and really important source of affordable housing in the city, looking 5 years down the line, 10 years down the line, we may be in real trouble. Especially because right now New York City is also looking to implement more energy efficiency, more climate concerns. There's a lot of other things that are going on here and these units and buildings are typically a lot older.

Brian Lehrer: Jackie in Manhattan, you're on WNYC. Hi, Jackie.

Jackie: Oh, hey. I'm a small mom-and-pop landlord, I have five units in Manhattan. I wanted to talk about three things. One as a business owner because that's how we see it. It's an investment. We are unable to manage our own business, the government is involved with supply and demand and we expect the market to equalize how our product is presented to a tenant. We have stabilized tenants, they have abused the system in being late or creating violations and we as a landlord have no recourse with the city. It's a very pro-tenant. New York is a pro-tenant in the legal system, in court. Then the third thing I wanted to talk about was the real estate taxes and how year over year they increase percentage-wise that we're unable to sustain.

Brian Lehrer: On that last one, Jackie, which is so fundamental. I think the Rent Guidelines Board under the law is charged with not just making sure that tenants can afford to stay in rent-stabilized apartments through the stabilization of the rent. It's called that obviously, but also they seek to guarantee that the landlords in the system do have some reasonable margin of profit. Do you feel it doesn't do that?

Jackie: I definitely feel it doesn't do that. Our rent-stabilized tenants are also senior citizens and so yes, we're sympathetic to our state men senior citizens sometimes they--

Brian Lehrer: They're harder to evict under the law, right?

Jackie: Yes. You definitely can't evict, and also their rent is subsidized by the city. If they apply for this, I don't know, it's called SCRIE, I think

Brian Lehrer: SCRIE, I forget what it stands for but yes, that's a rent subsidy and protection program for seniors under certain circumstances.

Jackie: Yes. I do want to just add back to we are a capitalist society, like any business when demand is down, the rent goes down because we're competing and vice versa.

Brian Lehrer: Although the premise of even having a rent stabilization system is that supply and demand just about always works in the landlord's favor in Manhattan where you live, right?

Jackie: Supply and demand does not always work in the landlord's favor. My building, it's a townhouse. It's a walk-up, there are lots of new developments that have a doorman or an elevator, or new amenities. In my case, it's not always in our favor so we compete with a lower rent because yes, you have to walk up or, I don't know, the dishwasher is not state of the art. It's all about let's just say Adam Smith Basic 101 Supply and Demand, and it works. It's the way business works.

Brian Lehrer: Yes. It works some of the time. Sometimes markets get perverted by market forces and then things like a lot of tenants not being able to afford rent take place, as has happened historically in the case of New York City. Jackie, I appreciate you standing for all these questions. Let me ask you one other thing. Being such a small landlord as you are would you like to see your interests represented by a different group than those who represent the big guy corporate landlords?

Jackie: There's this organization called RSA. I don't know, are you familiar with it or?

Brian Lehrer: Yes. We mentioned it before, the Rent Stabilization Association that represents basically all rent-stabilized landlords big and small, right?

Jackie: Right. There is a cut-off. If you have six units, you fall into this category. If you have five, you fall into this. Then if you have three then your taxes are way lower. There is a hierarchy system. My frustration is as a small landlord, I don't feel any real government organization is behind keeping the city's streets clean and safe with the small mom-and-pop landlord. I heard that 60% are small landlords, they're there. They're there every day. They're making sure the hallway is clean, everything is copacetic. We love New York that's why we're taking care of it, we live in it, we're investing in it. I don't feel like we have a voice with our government.

Brian Lehrer: Jackie, thank you so much for your call. I hear you only have five units and you rent to senior citizens and you feel you're in these positions. Thank you very much for calling in. We appreciate it. To finish up, Mihir, my guest has been Mihir Zaveri who covers housing for the New York Times Metro desk. We heard from a tenant, we heard from a landlord. Last question, what has Mayor Adam said with respect to the ability of struggling tenants to come up with more rent. If these increases do go into effect which they will at some point in that range has he promised to help in some other way?

Mihir Zaveri: I think that one of his responses to the numbers that were floated earlier before the meeting he said he called for the increases to be brought down to the 2% to 4% and 4% to 6% from higher percentages. I think he pointed that out. Then he's also advocating for things like housing vouchers. Which is part of his response to the final numbers that he's pushing for these other types of measures that might help people.

That's housing vouchers or something that many landlords are on board with as well. Beyond that, I think that's a deeper question because he has said that he's going to release a housing plan. We haven't seen it or a detailed version of it just yet. I think we're still waiting to see what some of those details might be.

Brian Lehrer: We'll stay tuned on that and what's the date of the final vote when the tenants in rent-stabilized apartments will know exactly what their increases are?

Mihir Zaveri: I believe that's coming in mid-June.

Brian Lehrer: Mihir Zaveri, reporter for the New York Times on the Metro desk covering housing. Thank you so much for filling us in on so much.

Mihir Zaveri: Sure. Thank you very much.

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