Landlord Income Soars
Rent hikes push it to record high
Daily News, April 28, 1999
By MICHAEL FINNEGAN

City landlords raked in record sums as tenants in 1 million apartments forked over the biggest rent hikes of the 1990s, a study released yesterday found.

Landlord income surged 11.4% from 1996 to 1997 on rent-stabilized apartments after operating and maintenance expenses, the city Rent Guidelines Board reported. The figures were the most recent available.

Tenant advocates immediately seized on the report to say landlords should get little or no rent increase this year.

"Landlords are making a bundle, and their costs are flat," said Jenny Laurie of the Metropolitan Council on Housing.

But landlord advocate Dan Margulies of the Community Housing Improvement Program called for a 4% annual increase.

"Net operating return for owners is essentially the same as it was in 1989," he said.

The study concluded that owners of the city's 1 million rent-stabilized units "are beginning to realize the benefits from the mid-'90s economic recovery."

Reflecting higher rents, less vacancy and fewer deadbeat tenants, the report said rent collections grew a record 5.4% for 1997. Landlord costs for fuel, maintenance and other expenses rose just 1.9%, the lowest since the data were first reported in 1989. Landlords also got a break from record-low mortgage rates.

The report kicks off the annual fight between tenants and landlords as the board sets rent-hike limits for leases taking effect after Sept. 30. The panel will propose limits on May 13, then hold public hearings before final adoption on June 24.

Some previous hearings have turned into raucous shouting matches.

Landlords' average net income per apartment was $265 in 1997, highest since the collection of data began in 1989, the study found. It was $258 in that year, the previous high.

For most of 1997, rent hikes on stabilized units were limited to 5% for one-year leases and 7% for two — the biggest since 1989. The limits now are 2% for one-year leases and 4% for two.

The study found the average monthly rent for stabilized apartments was $654 in 1997. The average rent was highest in Manhattan, $844. It was $575 in Queens, $531 in Brooklyn and $503 in the Bronx. No figure was given for Staten Island.

Rent collections rose the most in Manhattan, 6.7%, and the least in Queens, 3.7%. The biggest jumps were in East Harlem, 10.2%; Chelsea and Hell's Kitchen, 8.5%; Greenwich Village, 8.2%, and the lower East Side, 8.1%.

The study did not measure the full impact of the 1997 state rent-law overhaul that enables landlords to charge bigger rent hikes on vacant apartments.

The study did not report how much of the landlords' income went for taxes and mortgage payments and how much was profit.

Original Publication Date: 4/28/99