The inflation rates and the economic pressure are constantly taking a toll on the real estate sector on a global scale. However, the rise in rents in New York is a huge deal because rents in New York City are the highest compared to any city around the world.
NYC RGB Approves Hike in Rents of Stabilized Apartments
Given the rise in the inflation and interest rates, the landlords in New York City had submitted a request to increase rents. The request was submitted by the landlords of over a million apartments with stabilized rents.
The request was reportedly submitted to the New York City Rent Guidelines Board (RGB). Turns out, the RGB has realized the need to increase the rents for the stabilized apartments. Therefore, they have authorized the particular group of landlords to increase the rents of the stabilized apartments.
The Rent Guidelines Board in Manhattan is known for its regulations on stabilized apartments. Last Tuesday, voting was carried out at the board of the RGB. At the voting session, 4 out of 5 votes were in favor of hiking the rents.
Hike in Leases
Following the hike, the rates for the one-year and two-year leases have been raised. After the increase, the rate for the one-year lease has been raised by 3.25%. The two-year lease rate has also been raised by 5%.
The hike in the lease rates comes after the constant rise in the rents throughout New York City. It has been four months straight that the rents in New York City have been rising at a tremendous rate.
Due to the rise in the fourth consecutive month in rent prices, the rent for a median apartment has risen to $4,000 per month in Manhattan. The surge was recorded in the month of May and compared to the month of May from 2021, the hike recorded is 25%.
The information has been collected and shared by one of the major brokerage firms. The name of the brokerage is Douglas Elliman and Miller Samuel. They are known for being real estate consultants and appraisers.
Criticism from Legal Aid Society
Following the vote that was cast on Tuesday, the Legal Aid Society went to criticize the move. Their spokesperson has stated that they strongly condemn the voting that has been cast in favor of hiking the lease rates for the stabilized apartments.
Despite the condemnation, the hike in the rents was something that was predetermined given the overall situation of the economy and inflation around the world. While it is huge pressure on the global economy, the real estate sector is actually regaining the worth it lost during the pandemic.