Mayor Bill de Blasio cannot be accused of haste in filling out his administration. Three weeks into his term, we still have Bloomberg commissioners running housing, social services, fire, sanitation, finance, and on and on. None of those high-profile gaps on the de Blasio depth chart will matter, of course, if in six months’ time the city seems well run, and de Blasio achieves big items on his agenda. In fact, it’s some of the lower-profile posts, which almost no one is talking about, that will make the biggest difference for those living through the worst of times in de Blasio’s “tale of two cities.”
High and rising rent doesn’t cause income inequality—income does—but it’s what makes life truly difficult for people who aren’t rich, because it’s the biggest expense for almost all households. Several government programs try to relieve that pressure, including public housing, Section 8 and the city’s twenty-eight-year commitment to subsidizing the construction and renovation of affordable housing. All are vital, but none really offer much resistance to the insatiable beast that is the New York City real estate market. The only weapon that really does is rent stabilization. More than 987,000 apartments in New York—nearly half of all rental units—are rent-stabilized, meaning annual changes in rent are set by a body called the Rent Guidelines Board, or RGB.
The mayor appoints all nine* members of the RGB—a chair, four “public members,” two people designated to represent tenant interests and two who speak for landlords. In approving rent increases, they are supposed to take into account changes to the costs landlords bear (heat, taxes, labor and so forth) and other economic factors. Every year the RGB has a hearing about how much to raise the rent; in a ritual of political theater as dependable as the tides, tenants and landlords scream at each other and activists do their best to drown out anyone who talks a line they don’t like.
During the Bloomberg era—when the then-mayor saw rising rents as a sign of New York’s success and a validation of his policies—the RGB regularly approved substantial increases in legal rents. An apartment renting for $700 when Mayor Bloomberg took office in 2002, where the lease was renewed annually, could legally go for $966 to $1,007 by the time Bloomberg headed back to the corporate world. That’s well ahead of the growth in family incomes.
Even during the depths of the recession, as renters’ incomes stagnated and cost increases for landlords were minimal, the RGB increased rents: in 2006 through 2008, the board approved one-year increases as high as 4.5 percent and two-year hikes as high as 8.5 percent. The trend continues: the RGB revealed last year that net income for landlords had increased for seven straight years, that tenant incomes had dropped, that evictions were up and that landlord operating costs were expected to rise a mere 2.6 percent this year. Yet the board, using its formula, raised rents 4 percent.
The impact of these increases went beyond the monthly rent bill; if a rent-regulated apartment’s monthly rent exceeds $2,500 and it is vacated, it exits the rent stabilization program. Last year, 6,700 units lost their rent protection that way. Every time the RGB raises rents, it moves every apartment in the system closer to the exit door.
As of today, there are three vacancies on the RGB that de Blasio can fill—the chair, one public member and one tenant member. Two other members of the board (the other tenant rep and one landlord member) saw their terms expire last month; de Blasio could reappoint them. While he cannot replace any of the other members except for cause, the mayor certainly could swing the RGB into a pro-tenant body with his picks.
“Coming off the Bloomberg years, any appointees who are committed to rent stabilization and do not simply represent real estate interests would be an improvement,” writes Celia Weaver, the assistant director of organizing and policy at the Urban Homesteaders Assistance Board, in an e-mail. She’d be happy just to see RGB hearings in the outer boroughs. And she adds: “It’d also be great if the RGB prioritized things beyond operating costs in determining increases. In the last few years rent has continued to climb while wages have stagnated, and the RGB should take that into account.”
The de Blasio appointments to the RGB will be a test of how he squares his commitment to progressive action with his political need to keep the real-estate/development community—who donate a lot to campaigns—reasonably happy.
Last year, de Blasio attended an event called the People’s RGB and, according to attendees, called for a rent freeze. “We believe the data on the housing market provided by the RGB’s statistical staff consistently supports tenants’ calls for a rent freeze,” writes Katie Goldstein, the director of organizing at Tenants & Neighbors, in an e-mail. She notes that some members of the RGB in recent years “have been unfamiliar with rent-regulated housing” and says advocates are pushing to tighten the qualifications for RGB membership.
For now, she adds, “There is no shortage of smart, experienced, dedicated people who could sit on the RGB and represent the real needs of the majority of New Yorkers.”
* A previous version of this post erroneously reported that there were eight members of the RGB.