This Thursday, November 17, the Loft Board will return once again to the question of Interim Rent Guidelines. You may recall that they attempted to push through increases of 6-23% on loft tenants who hadn’t paid an increase for 3 years, but we had such a strong showing of tenants at the meeting that they tabled the guidelines and even cancelled their last meeting.
The meeting is at 2pm Thursday at 22 Reade St. in Manhattan. Again this is a public meeting, not a hearing, so tenants won’t have a chance to speak, but our presence will speak for itself!
It’s important to note that the Loft Board has divided opinions on the matter – even the landlords’ representative seemed to be shocked at the way these numbers had been produced by Loft Board staff without seeking any public input.
So how did the staff come up with these numbers? They claim there was nothing original about them:
- that the basis for these increases is in the original Loft Law
- that the numbers they used come from the Rent Guidelines Board (RGB), which oversees rent stabilization
It turns out that both of these claims are creative interpretations.
First, where did the original interim rent guidelines come from? In the 1980’s, when the original Loft Law was passed, a huge number of the SoHo tenants covered by the law had not paid rent for years or decades, because of deplorable conditions in their buildings. (It’s hard to know how many, since the Loft Board of the Giuliani era carelessly lost all its records.) Since base rent is determined by the last accepted rent payment, these rents were often absurdly low, and landlords demanded an incentive to start doing repairs and getting spaces up to code.
Obviously, the situation is much different now – most loft tenants are paying residential rent for what are usually not residential living conditions. What’s more, according to Leah Hebert, chief of staff to State Assemblyman Vito Lopez, these rules defined rent adjustments for tenants who were not paying rent at all! This is extremely rare today.
Second, where did the Loft Board get these numbers? Rent stabilization is based on some complex factors, but the intention is to keep profit margins stable. Now, according to research conducted by the East Williamsburg / Bushwick Loft Tenants Association, profit margins for ordinary residential rent stabilized buildings are around 30% – for each dollar of rent taken in, landlords get to keep about 30 cents after paying for maintenance and taxes. But for loft conversions, where maintenance tends to be pretty shoddy, landlords are pulling in profits that average 70%! So the argument that this is in line with RGB objectives is also untrue.
Clearly the Loft Board is making up rules that will drive out loft tenants, for the sole benefit of landlords – landlords who have been getting away with charging residential rent without providing a residential standard of living.
Come to this meeting to show them they won’t get away with it.