Mitchell-Lama Rent Increase Denied

The federal Department of Housing and Urban Development has denied landlord Kriesel/Insignia’s request for a 16% rent increase at the West Village Houses, a Mitchell-Lama development on Bleecker and Hudson streets in the West Village.

“HUD’s refusal to grant any increase at this time is a major victory for West Village Houses tenants and an embarrassing defeat for management,” said Down by the Riverside, the tenants’ association newsletter. The department found that the landlord’s income relative to its expenses was too high to justify a rent increase.

With the tenants’ association well organized—it had three dozen building organizers, and over 200 tenants chipped in to hire a lawyer—they found that the landlords had inflated estimates of expenses, underreported income, and submitted budget numbers that were either not documented or didn’t add up.

“Had the Tenants’ Association not challenged the rent increase request, HUD would have likely approved the requested 16% increase by default and all tenants would now be paying hundreds of dollars more in rent each month,” Down by the Riverside wrote. “When landlords are required to justify their pleas for rent increases by opening their financial records, they are often unable to withstand the scrutiny.”

The landlord may file for another increase in six months. Meanwhile, the tenants’ association, which projects that Kriesel/Insignia will show a $1 million profit for 1998, has voted to ask for a rent reduction.