Nearly 10% of rent-stabilized properties in New York City are run down, it was revealed Thursday — as landlords claimed Mayor Zohran Mamdani’s promised rent freeze will only make it harder to get those units up to snuff.
Rent Guidelines Board members launched into their first meeting this year by signaling they expect to approve the rent freeze in May, fulfilling a key campaign promise of the new democratic socialist mayor.
The meeting coincided with a RGB report that Mamdani used as fodder for another of his signature slick social media videos, touting its finding that buildings with rent-stabilized apartments saw revenue increase by more than 6%.
Hizzoner pitched New Yorkers to get involved in the historically boring RBG process – which already promised to see nine board members, including six hand-picked Mamdani appointees, grapple with the rent freeze.
“If you’re a tenant, it’s important the RBG hears from you on how rent or lack thereof would affect you,” he said in the minute-and-a-half vid.
“And if you’re a landlord, the RGB wants to know the costs that go into owning and operating a rent stabilized building,” he added, trying to appeal to the owners he has railed against.
But landlords and developers argued Mamdani has hijacked the board, and questioned the RGB report’s profit claims, contending it was a set-up for the mayor’s appointees to freeze the rent.
“This isn’t a game. He’s cheapened the process. The RGB is supposed to be a fair process,” said Ann Korchak, president of Small Property Owners of New York.
Mayor Zohran Mamdani released a video explaining the Rent Guidelines Board process. X/@NYCMayor
Mamdani called on New Yorkers to let the RGB know how they feel about rent increases in rent-stabilized apartments. X/@NYCMayorA small, but highly profitable set of luxury apartments counted in the report skewed the data, contended Kenny Burgos, CEO of the New York Apartment Association.
“If you take one millionaire and average it with minimum wage earners, you will not get a realistic average of wages, and you can’t do that with these buildings either,” he said.
Humberto Lopes, the CEO of Gotham Alliance who has 15 rent-regulated buildings in Brooklyn, also looked askance at the report’s findings.
Mamdani also encouraged landlords to let the RGB know about the costs involved in a rent-stabilized buldings. X/@NYCMayor“Who’s doing the math? Those numbers are way off,” he said. “Hundreds of buildings are in foreclosure. Property taxes have gone up for eight consecutive years.
“Mamdani is creating an atmosphere where the landlord is the bad guy and making money.”
The report found 9.2% of rent-stabilized buildings are distressed, slightly fewer than last year’s 9.3%, Brian Hoberman, the RGB co-research director, told the board.
“Since 1990, when 13.9% of stabilized properties were considered distressed, the proportion of distressed buildings declined to as low as 4.9% in 2016,” Hoberman said.
“Subsequently, distress rates rose. So by 2022, the distressed rate was up to 9.8% and since falling over the last two years to 9.2%,” he said.
Hoberman also contended that revenues for landlords generally exceeded their operating costs, giving them more money for mortgage payments, improvements and profit.
But Christine Smyth, an owner representative on the board who was appointed by former Mayor Eric Adams, argued the financial state of these buildings was much more dire.
“We can’t just look at that mean or median numbers that’s going to not tell us what’s going on at the tails,” she said, noting that the COVID pandemic hurt landlords so badly, that they are still just breaking even.
The RGB is expected to approve the rent freeze in May. X/@NYCMayorThe tally only includes nearly 18,000 of the 50,000 buildings since ones with 11 units or fewer are not required to report finances to the city.
The board is set to cast its first vote on the freeze at its May 7 meeting.
Former Mayor Bill de Blasio’s administration froze the rent three times during his tenure starting in 2015 — just as the percentage of distressed properties started to tick up each year.
De Blasio heralded the board’s decision in 2017 after the two consecutive rent freezes, saying, “I’m very proud that the board made that decision.”
“That’s never been done in history before,” he said, adding, “That happened under this administration because I instructed the Rent Guidelines Board — I name the members — and I instructed them to not follow the biases of the past, but be respectful of the needs of tenants and not just the needs of landlords, and look at all the facts.”
