When Apartments Turnover, Rents Rise and Poor Families Lose

David R. Jones, La Nueva Mayoria / The New Majority

For anyone wanting proof of the effects rapidly rising rents and rent burdens are having on city neighborhoods, just ask Leticia Pazmino.

Since immigrating to the United States from her native Ecuador 40 years ago, the long-time Jackson Heights resident has lived in the same five-story residential building on Roosevelt Avenue. She likes the neighborhood because it’s safe with good places to shop and walking distance to bus and subway lines. But at 59, and with an annual income of under $18,000, she is worried about her ability to hang onto the two-bedroom apartment she shares with her 23-year-old son.

Judging by what happened recently to a vacant, one-bedroom apartment on her building’s third floor, Ms. Pazmino has every reason to be concerned.

As she tells it, after the previous tenants moved out, the building’s owner made improvements to the apartment, including new windows, floors and ceilings. It is now renting for $2,500 a month.

“I don’t know what will happen after my lease expires in August,” said Ms. Pazmino, who splits the $943 monthly rent on her apartment with her son. “How much it goes up I don’t know. At my age where can I go if I have to move? I’ve worked all my life, paid my taxes. I should not have to live this way, worrying about a place to live. It’s very hard.”

Ms. Pazmino’s situation is indicative of the dire situation many low-income households in our city are facing these days. An increasing number of low-income, unassisted tenants are paying more than half their income in rent in most parts of the city. At the same time, our rent-stabilization system which is supposed to serve as a bulwark against the worst effects of the city’s chronic affordable housing shortage, is being steadily weakened through deregulation and excessive rent increases allowed when apartments turn over.

A primary tool driving rising rents and rent burdens

About 41 percent of the city’s unassisted low-income households live in more middle income neighborhoods, like Jackson Heights and Elmhurst where incomes are rising.  One of the chief mechanisms driving massive rent hikes in Ms. Pazmino’s building, and in other communities throughout the city, is the statutory vacancy allowance, or “eviction bonus” which allows an automatic increase of about 20 percent when an apartment becomes vacant and turns over to a new tenant. It is the primary tool used by unscrupulous landlords to pressure tenants into moving out of their apartments and then jacking up the rents during vacancy.

In a new report released this week, Community Service Society housing experts Tom Waters and Victor Bach determined that the vacancy allowance alone accounted for nearly 50 percent of the citywide total increase in stabilized rents above inflation, from 2002 to 2014.

Another factor contributing to the increase is the spread of “preferential rent” leases, which specify a preferential rent to be paid during the term of the lease along with a higher registered rent which can become the basis for the rent charged upon lease renewal. This provision undermines the protection of rent stabilization by allowing large increases from the preferential rent to the registered rent at the conclusion of the lease term. And those increases in rent are compounded further by any increase allowed under the Rent Guidelines Board.

One million low-income households live in rent-regulated apartments

New York’s rent regulated apartments are the largest source of housing for more than one million low-income households with incomes below twice the federal poverty threshold. Since 2002, however, rents in the city have risen faster than incomes. For the bottom 20 percent of the population, rents have risen 30 percent faster than income.  As a result, the median amount of income that low-income tenants in the private unsubsidized market retain after paying rent was eight percent lower in 2014 than it was in 2005, after adjusting for inflation.

If we are to preserve this city as a place where people with a range of incomes can live and raise their families, then we must close loopholes in the state rent laws that permit deregulation and excessive rent increases to displace families and weaken our rent stabilization system.

And that means putting pressure on Governor Cuomo and the State Legislature to strengthen rent protections for New Yorkers by eliminating the vacancy allowance and preventing landlords from manipulating preferential rents to increase what tenants pay.

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