Landlord Profits Went Up. So That Means Rents Can Go Down…Right?

It's finally spring, which along with increasingly bad allergies brings, in New York City, the start of the annual debate over how much (if at all) to raise rents in rent-stabilized apartments. 

Last week, the Rent Guidelines Board released its annual study on the financial state of rent-stabilized housing in the city and here's the finding that likely will matter most: According to the RGB, landlords' net operating income (NOI) grew from 2021 to 2022 (the latest year for which data is available) by a healthy 10.4 percent, which the RGB notes is the first increase in NOI for owners of rent-stabilized buildings in three years. 

While both rent and income vary, most rent-stabilized apartments generated income for their owners that year: 

There are some important nuances to that growth in NOI—the RGB notes that the city-wide average was driven up by robust growth in "core Manhattan," the area south of West 110th and East 96th Streets, where NOI rose by a whopping 42.3 percent. For the rest of the city, landlords' net operating income grew by only 0.3 percent. 

Shouldn't this generally cheery financial picture for landlords lead to a rent freeze? "By landlords' own logic, if a decrease in the NOI justifies a rent increase, then an increase in the NOI—particularly as high as this year's—should justify a rent freeze," the Legal Aid Society said in a statement in response to the report. 

The landlord lobby has seized on another stat from the study—the RGB also found that the proportion of "distressed" properties (ie, those whose operating and maintenance costs exceed revenue) in the city rose by one percentage point, to 9.8 percent, part of a steady rise since 2016, when 4.9 percent of rent-stabilized buildings were "distressed."

"This data is from 2022. Things got worse in 2023," Jay Martin, the executive director of the Community Housing Improvement Program (CHIP), told the New York Daily News. "If something is not done immediately, these buildings will fail and tenants will suffer."

While the date for the final vote has yet to be set, the RGB's next public meeting is April 11. Last year, the board voted to increase rents for one-year leases by three percent, and two-year leases by 2.75 percent for the first year and then 3.2 percent for the second year.  

Progressive lawmakers in the state have one answer for what we could do to address this conundrum of relying on the private housing market for stable, affordable housing—and that's to enable the state to buy these "distressed" properties as part of a new authority that would build social housing. Wouldn't that be nice!

And some links that are also nice:

• Via the Daily News: "Tensions between top mayoral adviser Timothy Pearson and an NYPD chief who backed a sergeant now accusing Pearson of sexual harassment reached such a heated point in April 2023 that the mayor's brother had to step in to try to play peacemaker. Meanwhile, a tape obtained by the Daily News shows that Pearson, in a bid to prevent staff defections amid his blowup with Deputy Chief Miltiadis 'Milt' Marmara, went into damage control at a key April 12 staff meeting, suggesting if the cops in the unit didn't stay they could end up back on patrol."
• "Accused Subway Shover Found Little Help in New York’s Chaotic Shelters"
• Via the CITY: "A controversial street safety redesign of McGuinness Boulevard that has polarized neighbors in Greenpoint looms large over the state Assembly primary race where incumbent Emily Gallagher, a progressive Democrat who ardently supported the measure, is facing a challenge from a political newcomer with ties to the plan’s opponents. Anathea Simpkins, associate vice president of the gun violence prevention group Sandy Hook Promise, threw her hat into the ring for Assembly in January, and has out-fundraised Gallagher since, drawing $30,000 in donations over the past two and half months—more than twice what Gallagher raised in the same period. Some of her staunchest allies and donors are Greenpoint residents who've campaigned against the McGuinness safety upgrades."
• "Dozens of NY judges have repeatedly sent people to prison for too long, report finds"
• No one (except Steve Cohen) wants a casino next to Citi Field.
• Forcing pizza parlors to ensure that their ovens aren't spewing pollution is "ethnic discrimination," according to guess which newspaper.  
• No.
• A lot of terrible people in this story. 
• And finally, what's happening here: