New York approves raising rents for one million rent-stabilised tenants

New York City voted last week to raise rent prices for more than one million homes under the umbrella of the Rent Stabilized programme, in which tenants are protected from huge increases and can renew their leases for one or two years. From 1 October, one-year leases will rise by 3%, while two-year leases will see staggered increases of 2.75% and 3.2%, respectively, well below the 8% annual increase in the free market.

As landlords grapple with rising property maintenance costs, tenants struggle to find affordable housing and the largest city in the US faces the challenge of accommodating an increasing number of homeless people, the New York City Council has just approved that, as of 1 October, the renewal of these stabilised contracts will be higher than it has been for the past year.

Stabilised rents are much more affordable than renting on the open market. The average rent for a two-bedroom flat in Manhattan was $5,400 in May, about €4,950 at current exchange rates. This has gone up 8% in a year, according to real estate agency Douglas Elliman. Stabilised rents are at less than half these prices.

"The Rent Guidelines Board has done critically important and extremely difficult work protecting tenants from unsustainable rent hikes, while also ensuring small property owners have the necessary resources to maintain their buildings and preserve high-quality, affordable homes," said Democratic Mayor Eric Adams.

Tenants protest in front of New York City Council / Getty images

New York is a renter city, and nearly 2.3 million homes are rented out of just over 3.2 million units, according to the latest 2021 housing survey. Over 1 million homes are on the open market, where around 1.3 million are in social or price stabilisation programmes, such as this one.

However, tenants and activists called for no increase in such rents. According to a recent report, around half of the city's households are struggling with rising housing costs, spending more than 30% of their income on housing costs, whether for mortgage or rent.

Many landlords argued that a small or nonexistent rent increase would create an insolvency crisis for rent-stabilized buildings. “The math requires adequate rent adjustments to keep the city’s affordable-housing stock from plunging into an insolvency crisis,” several landlords wrote in an opinion piece in the New York Post.

New York has struggled for decades to create affordable housing for its residents. This latest increase comes after residential prices in the New York metropolitan area rose 6.1% last year, the highest rate in about 40 years. A decline in the average inflation-adjusted wage has significantly raised the cost of living.

NYC approves hikes for some 1M rent-stabilized apartments

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