Rebecca A. Seawright headshot

Assembly Member

Rebecca A. Seawright

Assembly District 76

Written Testimony Regarding 2016-2017 New York City Rent Guidelines Board Proposed Changes To Rent-Stabilized Apartments and Hotels

June 27, 2016

Delivered by Assembly Member Rebecca Seawright
to the NYC Rent Guidelines Board
1 Centre St., Suite 2210
New York, NY 10007
Email: chair@nycrgb.org
As the State Assembly Member of the 76th District, I am writing a testimony to the struggles of my rent-stabilized constituents in the ever changing neighborhood of the Upper East Side, Yorkville and Roosevelt Island. The rents in my district have risen dramatically over the years, and faster than anywhere else in New York City, to the point of unaffordability, and worse, destabilization. Between 2002 and 2012, Manhattan lost almost 100,000 units to destabilization. Last year in Albany, I voted with my colleagues to raise the destabilization ceiling to $2,700 in order to try to protect tenants who are becoming closer to the ceiling with every increase. But this is not enough. In our rapidly changing Manhattan landscape and housing market which determines the high rental rates in my district, my constituents who are protected by rent-stabilization laws are continually left behind, facing rising rent with limited resources and no safety nets. The tenants who are most impacted by increases in rent from year to year are some of the most vulnerable populations including seniors and low-income families. That is why I am compelled to bring my testimony before you, who are vested with the important responsibility to balance the interests of tenants with the interests of the real estate industry. Currently, that balance is leaning unfairly toward insatiable real estate interests, leaving rent stabilized tenants in a precarious position, bearing the ever increasing rent burden and overall cost of living. I realize that the task of being unbiased in the face of such opposing interests is challenging, but I come to you on behalf of the residents in my district, in hopes that it will help you make a decision that is fair, considering the current climate for renters in New York City. The Rent Guidelines Board has proposed annual adjustments of 0% to 2.0% for one-year lease renewal and 0.5%-3.5% for two-year lease renewal commencing October 1, 2016. Until last year, the Rent Guidelines Board has voted in favor of building owners, allowing them to collect consistent, merciless increases on tenants even through times of recession. Last year, for the first time in 46 years, tenants were provided with a rent freeze. Decades of unwarranted increases have driven some units to destabilization while others are simply unaffordable, which is why your vote last year was so significant. Compounded by Major Capital Improvement increases, vacancy decontrol increases of up to 20%, and fraudulent increases from intimidating landlords who seek to undermine the security of rent stabilized tenants, the current rent guidelines are not in favor of low- and middle-income residents. Following last year's historic vote, another rent freeze will provide relief for thousands of my constituents who are struggling to pay rent. Majority of people that come to my office in dire need are seniors who are afraid of losing their independence and the home they have lived in for many years. I am happy to report that in the last days of session we passed legislation in the Assembly to repeal the so called "eviction bonus" that has been incentivizing bullying behavior by landlords for too long. Annual adjustments continue to favor landlords. According to this year's Income and Expense study, the Net Operating Income (NOI) of rent regulated buildings increased by 3.5%, the tenth consecutive year that Net Operating Income has increased. The rental income for regulated buildings has increased at a higher rate than the rise in operating costs for the same buildings. In fact, the Price Index of Operating Costs (PIOC), fell 1.2%. Fraudulent adjustments to rent are more frequent than not, especially when it may be in the renter's favor, as with the recent steep decrease in the cost of fuel. Since its inception, the "Emergency Tenant Protection Act of 1974," provided the basis for a regulatory system which serves to counteract the artificial market forces which would otherwise widen the disparity in affordability, putting tenants at risk of displacement and homelessness. In 2011, the average rent paid by a rent stabilized tenant in my district, "core Manhattan" (below 96th Street), was $1,480. In 2014, Manhattan District 8 consisted of nearly 20% severely rent burdened households who spend at least 30% of their income on . rent while 60% were low income, severely rent-burdened households who spent at least 50% of their income on rent. This board needs to implement a rent freeze, considering the rent burden of these households. Our city only stands to benefit from protecting the rent stabilized tenants and units in New York City, which remain one of the very few forms of secure and affordable housing for middle-class and low-income New Yorkers. In closing, I urge you to provide relief to tenants across New York City and implement rent freeze for both one- and two-year leases. Thank you for hearing my testimony on behalf of my rent stabilized constituents of the Upper East Side, Yorkville and Roosevelt Island.