Just over a million of the city’s apartments are rent-regulated. But who regulates those rents, and how?
The answer is the Rent Guidelines Board (RGB), a group of nine people — all appointed by the mayor — who annually evaluate where rent levels should land.
Rachel Holliday Smith, The City
This article was originally published on by THE CITY
They take a final vote on how much rent will go up for rent-regulated apartments in late spring or early summer every year, typically in June. That’s when you may see headlines about a rent hike — or a rent freeze, in the case of three of the eight years of Mayor Bill de Blasio, not only during the pandemic.
Right now, the board is about to take its preliminary vote, then hear testimony (dependably raucous) from the public before its final decision. As the city’s affordability crisis worsens, the always-fraught process is set to be as tense as ever in 2023. New board appointees chosen by Mayor Eric Adams will decide how high landlords can raise rent for just under three out of every 10 apartments in the city.
The board’s final vote is the culmination of months of work and debate by the board and its professional staff to consider data about the city’s housing market — and take in hours of raucous public testimony where the board hears from landlords, tenants, elected officials and advocates.
In the past three decades, the board has set maximum lease price increases from 0% to 9.5% for one- and two-year leases, according to RGB records. If you’re curious how that number gets made, here’s a guide on the Rent Guidelines Board:
Who serves on the board?
The board was created to reflect various perspectives on the rent issue, and different members represent tenants, landlords and the public.
Two members are appointed to represent the interests of rent-regulated tenants. Two members are appointed to represent the interest of landlords. For each of those pairs, the terms are staggered; one member serves a two-year term and the other serves a three-year term.
The remaining five members, including the chair of the board, represent the public and do not directly represent either the tenant or landlord side. Those are typically the swing voters when it comes to rent price debates, said Leah Goodridge, who served as an RGB member representing tenants between 2018 and 2021 and is now a member of the City Planning Commission.
“If you’re a landlord representative or a tenant representative, basically every interaction is part of trying to sway the public members to vote your way,” Goodridge said. “They had the most power.”
One of those public members serves for two years, another for three years and two public members serve for four-year terms. The chair serves for as long as the current mayor wants them there.
How does the RGB determine the rent?
The board is mandated by law to establish permissible rent increases for all housing units that are subject to rent stabilization.
That includes 1,006,000 rent-stabilized apartments — as of 2021, according to the latest Housing and Vacancy Survey, conducted every three years with the U.S. Census — and a hard-to-quantify number of other rent-regulated dwellings including hotels, single room occupancy buildings and loft apartments.
The board is obligated to hold only one public hearing before it votes, according to the state Rent Stabilization Law and the City Charter. But it usually holds between “six to eight meetings per year,” the RGB website says, all of which are public and webcast.
What factors the board takes into account as it regulates rent — and how, or if, it should prioritize owners over tenants, or vice versa — is a perennial debate, and the subject of fierce argument every year.
According to the bylaws of the board, it has to consider a number of data points before it votes, including real estate tax burdens, sewer and water rates, the cost of financing for property owners, operating costs such as fuel and labor, and the city’s supply of housing.
To learn about those things, the RGB’s research staff prepares four big reports, released each spring ahead of the board’s deliberations. First is the Income and Expense Study, then the Income and Affordability Study, followed by the Mortgage Survey Report and the Price Index of Operating Costs. (If you want to paw through those documents, all the RGB reports can be found here.)
No one has chaired the board longer than Marvin Markus, a banker first appointed by Mayor Ed Koch and derided as “Marvin Markup” by tenant advocates when he returned to the board during the Bloomberg years. In an interview with THE CITY, Markus said every data point was important and the members considered each of the RGB’s research reports. “At the end of the day,” Markus said, board members are “the stewards of the housing stock,” i.e. the total universe of the city’s rent-regulated properties.
His opinion is that “their job is to make sure there’s enough income in the housing stock consistent with generic ability to pay,” he added.
According to Goodridge, one factor mattered more than all others in determining rent increases, in her experience: the almighty “net operating income,” or NOI.
NOI is a metric calculated by subtracting all landlord expenses from all revenue to find a measure of profits.
“For my nearly four years on the board, the most important reports that were often discussed and weighed were the reports that showed how much profits landlords made,” Goodridge said. “And the most important was whether the net operating income of landlords decreased or increased. That was literally the make or break for the votes of most board members.”
When do they make up their mind?
By law, the board has to decide on rent levels no later than July 1.
But a few things have to happen before then. After the board’s staff publishes its reports and the RGB meets to discuss them, the board takes a preliminary vote about a month before the final vote.
That preliminary vote is important to pay attention to because it almost always predicts what the final vote will be. Over the last three decades, the board has voted for a rent hike lower than the preliminary vote level only three times.
In between the preliminary vote and the final vote, the RGB holds public hearings to take testimony from New Yorkers. (More on that below.)
When the board makes its decision, the rent guidelines from the final vote will apply to one- and two-year leases signed between October 1 of the year of the vote and September 30 of the following year. For 2023, it will affect leases signed between Oct. 1, 2023 and Sept. 30, 2024.
Is the RGB really independent?
It depends on whom you ask. The board dates back to Mayor John Lindsay’s administration when it was created to independently evaluate rent regulation, separate from traditional political bodies. But, ultimately, the group is wholly appointed by the leader of City Hall, and members serve the pleasure of the mayor.
To Goodridge, the role wasn’t far removed from politics.
“In my experience, I did not feel like it was an independent board. It wasn’t. It was a very political board,” she said.
Markus said he often spoke with representatives from City Hall when he served as board chair, but never had interference from either the Koch or Bloomberg administrations.
“A good chairman would always talk to City Hall … you know, have a conversation on where they were thinking,” he said. “The chair’s very important. The chair needs to, for lack of a better term, whip the votes and lead. So the chair should be talking [to people about] what the thinking is.
“I had absolutely no pushback in both times I did it, because I think those two mayors thought what was going to happen was rational,” he added.
I’ve got something to say about rent! How can I testify to the RGB?
Does testimony make a difference? Markus couldn’t say, but he emphasized that heartfelt stories did make an emotional impact on him.
“I was very much emotionally swayed by some of the tenants’ stories and swayed by some of the smaller landlords and their plight.… But at the end of the day, those tenants need to be dealt with in the system,” through rent vouchers, or the Senior Citizen Rent Increase Exemption, or other assistance, he said. “That, unfortunately, is not the job of the Rent Guidelines Board.”
“It’s hard to make a decision on a million apartments based on, you know, five stories on either side that may resonate,” he added.
Goodridge finds the debate flawed.
“The structure and the framing of the board unfortunately, often equalized tenants’ survival – being able to afford their home – with landlord profits. And it’s never the same struggle,” she said. “For me, having a business and maintaining it is not the same as someone facing homelessness.”
Does the RGB affect my rent if I’m in a market-rate apartment? And how can I check if I’m regulated?
If you have a market-rate lease — a lease that’s not controlled or regulated — the RGB has no say over how your landlord should or can set your rent price.
However, you should be aware that many apartments or buildings legally should have rent-regulated status that tenants may not be aware of — including newer buildings with certain tax breaks, or older buildings with newer tenants. Watchdogs and journalists have blown the whistle on those instances many times, including in this 2015 ProPublica series and in THE CITY’s recent reporting.
About one-third of all the apartments in New York City are regulated in some form, according to the RGB’s analysis.
The best way to get more information about whether you may be entitled to a rent-regulated apartment is to check your rent history. Read THE CITY’s guide about how to do that here.
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