Westchester County Rent Guidelines Board’s Final Vote Continues Trend of Failing To Keep Up With Inflation Rates
(WHITE PLAINS, N.Y.) Earlier this evening, the Westchester County Rent Guidelines Board approved a rent adjustment of 1% for one-year leases and 2% for two-year leases starting October 1, 2023 through September 30, 2024, with a final vote of 5-3.
Although the new increases will avoid the rent freeze that property owners had feared and which the boards in Rockland and Nassau Counties had approved, the rent adjustment does not keep up with the rising operating costs of rent-stabilized buildings that have dramatically increased due to inflation and a sharp decrease in cash flow attributable to a surge in operating costs over the past year.
“I am extremely disappointed but not surprised by the insufficient rent increases that were approved tonight,” Lisa DeRosa, President of the Building and Realty Institute (BRI) and White Plains property owner said. “We presented actual data on the finances and costs for my buildings and factual evidence to show that we desperately need proper rent increases to help us stay afloat. If the Board fails to keep our hardships and financial struggles into consideration year after year, there’s just not much we can do but pray that we don’t hit a budget-busting catastrophe, major economic shock, or problematic tenant situation which would surely harm our tenants while it wipes our business out.”
The unemployment rate is currently at 3.4% nationally, and 2.9% in Westchester. This is one of the lowest on record – not just pre-pandemic, but ever. Wages and salaries increased by 4.7% from March 2022 to March 2023. Even in the face of rising inflation, 2023 was a positive year for working families, making it the most affordable year for a modest increase.
While the average increase in wages and salaries comes close to offsetting it for working families, past rent increases haven’t matched the increased costs of owning and operating buildings. The annual survey statistics accumulated and presented to the Board by the Research and Analysis Unit at New York State Division of Homes and Community Renewal (HCR) showed that expenses for rent-stabilized properties in Westchester had shot up by 6.5% in the previous year, while the average monthly legal rent had only gone up 1.22% over the same time — a measly $19 per month increase. The same survey found that fuel costs had gone up 20% year over year, one of the highest increases on record. Insurance costs had gone up 13% year over year, after going up 9% last year.
“If this trend continues, how many of us small landlords will be left in business? The Rent Guidelines Board can’t continue to treat us like we’re faceless corporations, you know my face and you know my story. Small property owners like us genuinely care – it’s the whole reason why we’re here in the first place,” Alana Ciuffetelli, Chair of BRI’s Apartment Owners Advisory Council said during her testimony. “Last year, we had a tenant testify on our behalf to say that she understands why property owners need sufficient increases in order for tenants to continue receiving the same quality of housing. If our tenants can understand this basic concept, I’m confused as to why this Board continuously provides us with meager increases that barely — if at all — help us break even on our costs.”
Along with rising operating costs, the Housing Stability and Tenant Protection Act (HSTPA) of 2019 also placed major restrictions on other programs for funding building improvements and renovations, making the annual increases from the Rent Guidelines Board even more critical. Vacancy bonuses, formerly used to fund renovations of apartments in between tenants, were eliminated entirely. In a recent survey conducted by the BRI, nearly all property owners reported not applying for an Individual Apartment Improvement (IAI) adjustment because the new amounts received from it post-HSTPA would be “not worth the effort.” Also in the survey, nearly all property owners reported not applying for a Major Capital Improvement (MCI), with those who indicated that they have a major renovation need saying that they intend to put it off for a more favorable economic climate and hope nothing disastrous happens. According to a study by Hudson Valley Patterns for Progress, the number of MCI applications has dropped by 83% in the past five years.
“Unless we get a fair increase moving forward based on the real needs of our buildings and the real costs of keeping housing available, affordable, safe, and dignified, my tenants will suffer along with my buildings,” DeRosa said. “I need to be able to properly address any maintenance or repair issues immediately for the safety and comfort of my tenants. If I don’t have the necessary funds, fixing these issues will take much longer and many of us will have no other option than to look for a cheaper and alternate solution. This doesn’t help my tenants in the long run, nor does it help preserve my building long-term.”
The Westchester Rent Guidelines Board announced that it will be scheduling a further public meeting to be held in September 2023 (specific date to be determined) to certify the rent guidelines for rent-stabilized leases commencing between October 1, 2023 and September 30, 2024. This formality will not change the percentage rent increases voted upon tonight.