RGB Votes 4% and 6% Preliminary Increases
by Steven Wishnia

With about 100 angry tenants in attendance, the Rent Guidelines Board voted May 8 to propose preliminary guidelines allowing rent increases of 4% for a one-year lease and 6% on a two-year lease.

The vote was 6-3. Tenant representatives Jeffrey Coleman and David Pagan were booed when they voted for it. “It’s not going to get any better, at least tonight,” Coleman declared. The two landlord representatives voted no, as did public member Edward Weinstein.

If approved at the final vote June 22, the increases would be the largest for rent-stabilized tenants since 1996. The board also proposed eliminating the $215 minimum rent, but retaining the $15 “poor tax” surcharge on apartments renting for under $500.

There was no debate from any of the five public members, not even a perfunctory comment about the need to balance the board’s figures that landlords’ profits increased by 11.8% in 1998 with the recent spike in fuel costs. But before the meeting began, Weinstein angrily denied that the Giuliani administration “dictates” the size of rent increases to the RGB, calling such allegations “insidious and insulting.”

It wasn’t quite “I am not a crook” or “I did not have sexual relations with that woman,” but it drew sarcastic applause from the tenants in attendance. Along with Justin Macedonia and RGB chair Edward Hochman, Weinstein is part of a trio of Giuliani-appointed public members who for the last couple years have consistently joined with the landlord representatives to form a solid anti-tenant majority on the nine-member board. They generally vote down the more extreme increases pushed by the landlord members—such as the 12% increase proposed by Vincent Castellano, which provoked a storm of tenant protest when Hochman suggested it in April—in favor of somewhat smaller increases less likely to damage the mayor’s political prospects. Over the last few years, RGB meetings have developed an increasing aura of unreality. Sitting under the chandeliers of the New York County Lawyers Association, surrounded by portraits of 19th-century attorneys, they might as well be light years away from the world of the tenant sitting at a kitchen table in Washington Heights or Elmhurst or Flatbush with a pile of bills, trying to figure out how to stretch $392.48 a week take-home to cover $650 a month rent.

Castellano is perhaps the board member farthest removed from reality. “Have rents sky- rocketed?” No,” he asked rhetorically in his opening statement. “Have apartments become less affordable? No.” (Tenants in the audience shouted out “Yes” in answer to both questions.) He further argued that “the rent guidelines don’t have a real impact on poor people,” that rents are still unconscionably low in the outer boroughs and upper Manhattan, and that job growth has been so dramatic that anyone who’s unemployed “either can’t work or doesn’t want to.”

He then proposed increases of 8.5% on a one-year lease, 12% on a two-year lease, a $25 poor tax on rents under $550, and partial deregulation of vacant apartments renting for under $500. The board rejected it, 6-2. Tenant representative Jeffrey Coleman then suggested increases of 1% and 2%, calling the fuel-cost increase “aberrant and temporary.” Landlords, he argued, play “heads I win, tails you lose”—calling for increases when fuel costs go up, and claiming that their other costs remain high when fuel costs go down.

“The people who live in rent-stabilized housing are getting poorer,” he declared. “There’s a dual economy in the city.” While overall wages in the city rose by 4.4% in the late ’90s, he noted, tenants’ incomes dropped by 0.5%. Continued rent increases, he added, “will completely destroy the middle class in New York City.”

The board rejected his proposal, 6-2, with no debate from the public members. The proposal finally accepted came from public members Agustin Rivera and Bartholomew Carmody, the two relative centrists on the board.

The board also voted against tenants in several other areas. It endorsed a 10% surcharge on sublets, 6-2. For lofts, it voted 5-4 for increases of 4% for a one-year lease and 6% for two years. For vacant rent-controlled apartments, it voted 5-4 to retain last year’s guidelines, allowing landlords to charge either 150% over the maximum base rent or the federal “fair-market rent,” whichever is greater. (The federal standards are $750 for a studio and $949 for a two-bedroom.) In all cases, it turned down proposals for lower increases.

And for hotels and rooming houses, it rejected a proposal by Coleman in favor of a 4% across-the-board increase. The proposed guideline, approved 5-4, includes a Weinstein amendment weakening anti-warehousing protections. Last year, hotel owners could only get the increases if at least 70% of the rooms were occupied by rent-stabilized tenants; the proposal lowers this to 50%.

Outside the building, a cluster of angry women gathered, wondering why the board that sets rent increases for tenants across the whole city isn’t democratically elected. “The city’s going to be the very rich and the very poor. That’s where we’re going,” said Beverly Moore, a Met Council volunteer from Harlem.