Court Slams NYC Rent Board for Exceeding Its Authority

Each year, the New York City Rent Guidelines Board (RGB) passes a rent increase for tenants in rent-stabilized apartments.

In June 2008, with the economy on the decline, the RGB passed 4.5 and 8.5 percent increases for one and two-year renewals, respectively. But some tenants were forced to take on even higher rent hikes. The RGB passed a guideline with a “supplemental increase” provision, also known as a “poor tax.” Tenants who have lived in their home for six years or more and pay $1,000 or less in monthly rent were ordered to pay a dollar increase rather than the usual percentage increase. The 2008 increases were $45 and $85 for one and two-year renewals for tenants who fell into that category. In 2009, the board passed high increases of 3 and 6 percent, with a poor tax of $30 and $60.

The nine board members are appointed by the mayor, and the chair serves without term limits, at the pleasure of the Mayor. While there are legislative efforts to remedy this imbalance of power, tenants and advocates have taken other measures to put a stop to what they believe are illegal acts by the RGB. With the help of the Legal Aid Society and South Brooklyn Legal Services, New York-based tenants’ rights organization Tenants & Neighbors, along with two tenants directly affected by the supplemental increase, sued the Rent Guidelines Board for exceeding its authority by creating different classes of housing accommodations.

Ellen Davidson, attorney with the Legal Aid Society, explains, “About three weeks after the final vote, the Appellate Division, 2nd Department came down with its decision in New York State Tenants and Neighbors Coalition v. Nassau County Rent Guidelines Board. In that case, the 2nd Department invalidated a separate rent increase for low-income tenants, holding that the Board had improperly created a new class of accommodation. Creating classes of accommodations was left to the legislature only. We then used this claim to file our case.”

In January, the Supreme Court of New York County issued a decision in favor of the tenants. The Rent Guidelines Board posted an alert on its website stating that the supplemental increases from 2008 and 2009 were not in effect and immediately took steps to appeal the decision. While some tenants continued to pay the high increases and watch the appeal process, other tenants simply could not afford the increases and were forced to leave their homes.

Six months after the initial wave of good news, tenants received another. One week ago, just two days before the RGB’s annual vote, the Appellate Division of the New York Supreme Court upheld the lower court’s decision and invalidated the supplemental rent increases passed by the RGB. Tenants are entitled to money back from their landlords. According to Ed Josephson of South Brooklyn Legal Services, tenants can request a refund or credit from their landlord. If the landlord does not respond, the tenant can either subtract the overpayment from the rent or sue in small claims court.

Next, the Rent Guidelines Board will ask the state’s highest court, the Court of Appeals, to review the case. In the meantime, the board continues to do business as usual. Rather than approve a rent freeze during this damaging economic crisis, the board passed rent increases of 2.25% for a one-year renewal and 4.5% for a two-year renewal. These are the lowest increases that board has passed in eight years.