Rep. Nadler calls on NYC Rent Guidelines Board to Enact a Rent Rollback

Jun 20, 2016

New York, NY - Today, Congressman Jerrold Nadler (D-NY), a longtime advocate for affordable housing, testified before the New York City Rent Guidelines Board.  His prepared statement follows:

TESTIMONY OF U.S. REPRESENTATIVE JERROLD NADLER ON THE NEW YORK CITY RENT GUIDELINES BOARD 2016 PROPOSED RENEWAL ADJUSTMENTS FOR APARTMENTS

                                                                                                                                JUNE 20, 2016

"Thank you for the opportunity to speak at this public hearing before the Rent Guidelines Board (RGB).  I am here today representing my constituents in the Tenth Congressional District, which includes parts of Manhattan and Brooklyn.  As a longtime advocate for affordable housing, from my time in the New York State Assembly at the start of my career, to the ongoing battles I have waged with my colleagues in Congress to protect and enhance federal funding for affordable housing, I believe strongly in rent regulation.  A great many of my constituents reside in rent stabilized apartments, and rent regulation is a critical concern for these residents.

"Last year, in 2015, the Board voted for the first rent freeze in its history. This decision marked a historic victory for rent regulated tenants and gave crucial protections to millions of New Yorkers living in rent stabilized housing. I applaud you for that critical step. However, the majority of rent regulated tenants continue to struggle financially while landlords are experiencing record decreases in operating costs and sustained income growth.  On May 3rd, the Board proposed increases for rent stabilized apartments of 0 to 2% for one-year leases and 0.5 to 3.5% for two-year leases.  I urge you instead to build upon last year’s historic vote by enacting a rent rollback for 2016.

"The RGB has historically looked to its Price Index of Operating Costs (Index), which gauges changes in the operating and maintenance costs of stabilized buildings for landlords, to determine an appropriate rent increase. The RGB found that the Index for all rent stabilized apartments decreased by 1.2%--meaning that the cost to operate rent stabilized buildings went down—while landlords’ incomes went up.  According to the Board’s Income & Expense (I&E) Study, rental income increased by 4.8% and landlords’ net operating incomes increased by 3.5%. This figure mark the tenth consecutive year that landlords’ net operating income has increased, and makes it decisively clear that landlords continue to enjoy significant margins of profitability and that they can afford—and will still profit—in the context of a rent rollback, just as they did during last year’s rent freeze.

"While landlords have experienced sustained profits over the past several years, tenants have continued to struggle even as New York City’s economy has become stronger.   According to the most recent New York City Housing Vacancy Survey (NYCHVS), from 2011-2014, median monthly rents for rent stabilized tenants rose over 5%, while median renter income fell over the same period of time.

"Rent stabilized tenants are currently facing the highest financial burden of all renters when viewed in light of the U.S. Department of Housing and Urban Development’s housing affordability benchmarks—which suggests that renters pay no more than one-third of their income on rent and utilities.  In contrast, rent stabilized tenants’ rent-to-income ratio is over 36%.  While this burden is not limited to the rent stabilized community – NYCHVS found that 56% of all New York City renters are rent-burdened– lower income renters are the most vulnerable among New York City residents, and carrying an outsized rent burden puts them at the greatest risk of financial crises and homelessness.

"Given New York’s current housing climate, I believe that a rent rollback is the best option available to the Board to prevent further exacerbating tenant hardship. Once they have been priced out of their apartments, many rent stabilized tenants have few other options. New Yorkers are already struggling to find permanent affordable housing.  Mayor de Blasio’s administration has prioritized affordable housing and has made strides in protecting existing units and creating new housing opportunities for City residents.  Rolling back rents for rent regulated units would positively impact the lives of millions of New Yorkers by alleviating their growing financial burdens, protect thousands of units from being lost to those who need them, and allow many New Yorkers to remain in their homes and communities.

"On behalf of my constituents in the Tenth Congressional District and rent regulated tenants across the city, I again urge you to enact a rent rollback. Passing unwarranted additional financial burdens onto tenants would only exacerbate unsustainable rent-to-income levels within an already vulnerable community.   

"Thank you for your consideration."