Letter to LB on landlord incentives

To: NYC Loft Board
From: New York City Loft Tenants [NYCLT]

Dear Chairman LiMandri –
Dear Ms. Alexander –

NYCLT members were heartened at Thursday’s decision by the Loft Board to draft two sets for 2-06 Interim Rent Guidelines – one with a 0% increase and one with a single-year RGB increase, lesser for tenants who pay their for utilities. To reiterate we feel strongly that there should be no Interim Rent Increase before the statutory “compliance milestone” increases of 6-8-6%.

We agree with Mr. DeLaney that awarding landlords a rent increase before they reach any milestone in the compliance process is counter-productive and actually acts as a disincentive to start the work.

There were however some misconceptions that came up in discussion by the Board that we would like to comment on to add clarity.

It was insinuated that the first 6% statutory rent increase was a difficult and expensive first step for building owners. This is simply not true. The 6% increase is awarded to landlords upon submitting a provisional first draft of architect’s plans. Not only is the work solely architectural, but the plans don’t need to be complete or viable. The 8% increase does require negotiation with tenants in the Narrative Statement Process, and architectural and legal costs, but it is still before any material work is completed. Both of these milestones are achieved through paperwork and are awarded before an owner must spend any money on actual construction, materials or building labor. The implication that a landlord will be compelled to spend huge sums of money before getting any rent increases is inaccurate – owners will actually get a 14% rent increase before beginning any physical work or making any substantial cash outlay.

In making decisions about rent increases, the Loft Board should not underestimate its responsibility to foster sustainable neighborhoods. Making buildings safe from fire and collapse is an essential endeavor. Keeping entire communities with their history and culture safe from those who seek to uproot us is a valiant effort and something we hope the Loft Board can be truly proud of for years to come.

NYCLT

cc: Council Member Stephen Levin, Council Member Erik Dilan, Brooklyn Borough President Marty Markowitz, State Assemblyman Vito Lopez, State Assemblyman Joseph Lentol, State Senator Daniel Squadron

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