The world depends on simple arithmetic — except, apparently, when it comes to affordable housing.
We hope this trend will change when the Rent Guidelines Board meets Wednesday to vote on rent adjustments for 1- and 2-year leases of rent-stabilized apartments.
If the RGB bases its vote on the numbers — on the data of its own studies on building operating costs and rent revenue — then the outcome will be rent adjustments on the higher end of the range it proposed last month.
But this, unfortunately, is the housing arena, a political hothouse where decisions aren’t based on sensible math and those who shout the loudest historically get their way.
Even before Wednesday’s final vote, the 25,000 owners from all five boroughs that make up the Rent Stabilizaton Association’s deeply diverse membership — two-thirds of them of the mom-and-pop variety — were at a disadvantage because the RGB ignored the math in its preliminary vote.
In that vote, it recommended a range of increases well below what the numbers show these private providers of affordable housing need to maintain their buildings.
If there ever was a time for the RGB to vote for the top of the ranges, now would be that time. The numbers support it.
The RGB’s own reports — the 2023 Income and Expense Study, Price Index of Operating Costs and Mortgage Survey Report — require it.
One glaring number jumps out: the historic 9.1% plunge in net operating income. It’s the third decline in four years, and it obliterates the rhetoric of anti-owner lawmakers and professional tenant advocates.
The math doesn’t lie: Revenue is down while costs are up.
The math requires adequate rent adjustments to keep the city’s affordable-housing stock from plunging into an insolvency crisis.
Yet, to hear the tenant lobby tell it — and the group of elected City Council members who shamefully disrupted the democratic process at the RGB’s preliminary vote with intimidation and scare tactics — the numbers don’t count.
But they do.
The math matters when City Hall balances its budget, when grocery stores raise prices to cover costs, and when the Education Department measures class size.
Yet this adherence to math disappears for affordable housing.
The city raises property taxes. But the advocates don’t want owners to pass along that cost in the rent.
Insurance premiums are higher as a consequence of state laws. Can’t pass that along, either.
Interest rates are skyrocketing. Sell the building, they say.
Energy and utility costs are through the roof. A rent rollback, they insist.
The advocates say the state Emergency Rental Assistance Program paid the rent, insisting that owners got enough money during the worst days of the COVID pandemic and don’t need an increase.
But ERAP only covered rent that was already owed.
They also pull out another false narrative — the “eviction tsunami” — designed to distract and create hysteria.
Yet the numbers don’t lie: We looked at every single filing in Housing Court in all five boroughs from January 2022 through April 2023. We compared them to court data from pre-COVID 2019.
Here’s what we found: Post-COVID, in 2022, evictions were down — by as much as 94%; so far in 2023, they’re down as much as 57%.
Before sounding off, politicians like city Comptroller Brad Lander, who recently fed the false-eviction narrative, should check the real data.
Housing Court is where disputes are resolved; tenants receive government assistance that keeps them in their homes.
But the advocates push soundbites that vilify building owners and ignore the facts and basic economics.
There’s no accounting gimmick around rent revenue not keeping up with constantly increasing expenses, no matter how many politicians storm the stage or create false narratives to disrupt the process.
Rent-stabilized tenants are not a monolithic group with the same experiences.
There are those in economic distress who need vouchers, social services and other government support.
There are those with six-figure incomes and beach and country homes.
The affluent and wealthy are counting on the truly distressed to protest on behalf of their privilege.
That’s what happens when rent laws are not means-tested.
On Wednesday, the RGB must address this simple equation: Rent-stabilized buildings will face a real insolvency crisis if rent adjustments commensurate with the data aren’t provided to the largest segment of affordable-housing providers, who hail from every race, ethnicity, gender and religion, and include new Americans and generational immigrants as well.
These owners — most with modest properties of 20 or fewer apartments, and thousands more with less than 50 — are counting on the RGB to base their vote on the math.
Anything less would be catastrophic to affordable housing, the city’s economy, owners and tenants.
Kelly Farrell is a policy analyst and Michael Tobman director of membership and communications at the Rent Stabilization Association.
This story originally appeared on NYPost
