NEW YORK CITY—Following a contentious battle and much discussionof “will they or won't they,” the Rent Guidelines Board hasvoted to raise rents on rent-stabilized apartments. Theorganization made history when it enacted the lowest hikes in itsnearly half-century history, prompting some CRE executives to cryfoul.

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The Board voted to raise rents on nearly 1 millionrent-stabilized apartments by 1% for new one-year leases and 2.75%for two-year leases, according to the New York Post. TheMayor's office was not available at press time.

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While the increase is record-breakingly small, it runs counterto Mayor de Blasio, who had suggested a freeze on rents aftersaying Mayor Bloomberg had been overly generous to landlords. “Weneed a course correction — a one-time action to clearly rectify themistakes of the past,” de Blasio said hours before the vote.

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The idea for the modest increase came from RGB member StevenFlax, a de Blasio appointee who is vice president for communitydevelopment at M&T Bank. “It costs money to run buildings and Ido believe that my proposal is sincerely a historic change. It isnot a political win for the mayor.”

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Indeed, Mayor de Blasio expressed his disappointment Tuesdaywith the decision—though he wasn't surprised by it. "It was not asurprise to me that there would be a difference of opinion and weknew it would be a close vote either way you slice it. But I wastrying to make very clear what I thought was the right way togo."

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Still, industry attorney Sherwin Belkin, a founding partner ofNYC real estate law office Belkin Burden Wenig & GoldmanLLP—who represents property owners—suggests politics played a keyrole in the decision.

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“The RGB has certain criteria that it is obligated to assess andanalyze in order to determine the annual increases,” he says. “Asbest as I can understand the numbers that were to be considered,the appropriate criteria dictated rent increases far above thosethat were granted last night.”

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“Unfortunately,” he continues, “the legal analysis seems to havebeen overshadowed by overt political concerns andpressures. The call by elected officials for a rent freezeright before the vote was taken seems intended to skew thepercentages below what the analysis dictated should actuallyoccur. This does not portend well for the call for increasedaffordable housing – which, in the final analysis, requires apartnership by the city with the real estate industry.”

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Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.