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Renew for 1.5% 1 year or 2.5% 2 years?

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Renew for 1.5% 1 year or 2.5% 2 years?

Postby nycrsa1 » Wed Jan 29, 2020 11:05 am

I have just received my Renewal Lease form from my landlord and am trying to decide whether to renew for 1 year at 1.5% increase or 2 years at 2.5%. I do intend to stay here for many years. What is the thinking or guessing about next year’s RGB increases? Will landlords fight successful fight new rent laws/reforms after next election? What has been the historical increase after such a low increase? THANKS!
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Re: Renew for 1.5% 1 year or 2.5% 2 years?

Postby BubbaJoe123 » Wed Jan 29, 2020 11:48 am

I did some math on this a while back, I'll see if I can dig it up. The short version was that there wasn't a clear benefit to going with 1 or 2 year renewals over the long term. The best strategy depended entirely on what year you started in (i.e. using made-up years for the example, if you moved in in 2005, you'd have been better off going with 2 year leases, but if you moved in in 2006, you'd have been better off going with 1 year leases).
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Re: Renew for 1.5% 1 year or 2.5% 2 years?

Postby TenantNet » Wed Jan 29, 2020 12:46 pm

This question comes up on the forum every so often. While one can speculate, there is really no way of knowing for certain how the RGB will rule on future years. I do not agree with his assessment that even years are better than odd years (or vice versa).

But consider:
a) it's often a pendulum, swinging back and forth
b) in a mayoral election year, that seems to be better for tenants (especially if the incumbent is running for re-election)
c) historically picking two-year renewal results in overall lower rents (however there are exceptions)
d) increases are generally larger then typical cost-of-living increases.
e) after 2019, yes the LLs do seem to be fighting back, but that seems to be focused on Albany, not the RGB.

You can do an economic analysis, even using economic concepts of present value and future value (of money). I looked at that once, and in the long term, it didn't make much difference.
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