City Landlords to Cut Staff and Repairs, Blaming Rent Freeze

City Landlords to Cut Staff and Repairs, Blaming Rent Freeze

July 14, 2015

The New York City Rent Guidelines Boards historic decision to freeze stabilized rents with a zero-percent increase on one-year leases late last month has tenants celebrating and landlords fuming.

Now, representatives for the citys landlords say their constituents may forgo maintenance and building services on their properties due to the boards decision to freeze rents on stabilized apartments.

You cant have costs that go up and rents that are frozen in place,said Jack Freund of the Rent Stabilization Association, which represents the interests of the citys landlords. Thats not a practical way to run buildings.

Though landlord and tenant advocates disagree on many of the basic facts surrounding the rent freeze, they do agree on one disconcerting forecast: Landlords for over a million tenants of rent-stabilized units will cut services or neglect building repairs and maintenance in the near future.

With that in mind, tenant advocates have urged nonprofits serving low-income clients to ask them about their housing situations and make sure they are both safe and stable.

If a landlord is not performing important repairs and maintenance, tenants have the option to organize in the building to press for changes or they can call 311 with questions or complaints.

There are a few nonprofits that will provide professional maintenance services for certain renters in need.

Metropair, a city project run by the Metropolitan Council on Jewish Poverty, provides free handyman services for disabled seniors. The service makes basic repairs for tenants at no charge if they are at least 60 years old, live in New York City and can show financial need. While a spokesperson for organization says theyre the only such citywide service for renters, some neighborhoods have local groups that can help.

Owners insist that the costs of maintaining their buildings have outpaced the rent they receive from tenants in stabilized units for over a decade. They cite data that show building expenses will increase 6 percent while rent-stabilized tenants will only pay a 1 percent increase in their rent over a two-year period.

Ultimately, if this keeps upand I believe these inordinately low increases will continuethen owners are going to have to cut back somewhere,Freund said.Some of the largest expenses, like oil for heating and hot water, are fixed by city regulations mandating that landlords provide those basic services. This may leave other maintenance or service expenses on the chopping block.

If you dont have the money to put into the building, you know whos going to suffer?Freund asked. The landlord will suffer, but the tenants will also suffer.

Tenant groups disagree with this logic.

I think the landlord objections to a rent freeze are not only false, but laughably offensive to tenants, said Ilana Maier at the Metropolitan Council on Housing, noting that landlords have made record profits in the last decade. The idea that theyre going to have to cut back on services is absurd. So if landlords stop giving services, its because theyre greedy. Not because theyre having financial problems.

Potential problems in apartments will vary based on whether a tenants building owner is a large management company or a small operator, landlords say.

For larger buildings and management companies that employ more workers, problems could stem from layoffs. One major owner of rent-regulated apartments told RSA that they are planning to cut staff, Freund says.

For smaller building owners, property upkeep, cleanliness and maintenance will likely be postponed or neglected, landlords say.

My phone is ringing off the hook every day, people are so disappointed and disgusted,said Chris Athineos, head of the Small Building Owners of New York, who also rents stabilized units. We talk about preserving and creating new affordable housing, but we have to preserve the affordable housing that we have now.

Athineos is weighing what maintenance and repairs he will forgo on his own buildings as a result of the decision to freeze rents, he said. A prewar building he owns needs to be completely rebricked, but he cant afford to do that. Its just one example of the kind of half-measures landlords are going to have to take, he explains. You have a leaking roof. It creates mold, mildew in top-floor apartments. Are you considering putting on a new roof? No, you're just going to patch it. More patches, more patchwork.

Without income that goes above and beyond the buildings operating costs, Athineos and others argue, landlords have to shift from a proactive, preventive maintenance approach to a reactive approach, because they say they simply dont have the funds to take on major projects like replacing plumbing or reroofing an apartment.

Its frustrating. I want to do the right thing, Athineos said, adding that he runs violation-free buildings and has good relationships with his tenants. These are my customers, I want to provide them the best service I can. But its very hard to do when your income is so severely restricted.

Small operators will be the most affected by these rent freezes, according to several landlord advocates. All this could lead to a flight of responsible landlords from the city, building owners warn.

Weve been through this cycle of disinvestment before,Freund says. Hasnt happened in a while, so maybe people are short on memory. Nobody on the board probably lived through that period of time when the Bronx was burning.

Tenant groups dismiss such gloomy forecasts and reject landlord claims that the Rent Guidelines Boards decision was unfair. Building owners in New York City, they contend, are still turning a profit every year.

The Rent Guidelines Board essentially agreed. The board, which voted 7 to 2 to freeze rents, cited a consistent rise in landlordsincome after expenses over the last decade.

While tenant advocates may not believe that building owners wont have enough money to take care of their buildings, they do believe landlords when they threaten not to make repairs.

Now they have an excuse to do it,Maier said. But theyve been doing it for so long that its just going to be another day in a stabilized unit.

Frank Runyeon
Frank G. Runyeon
is City & State’s senior reporter. He covers state politics and investigations.